Heat pump operating cost vs gas

The heat pump vs furnace page is about whether to buy the machine. This one is about the bill after it is hanging on the wall. A heat pump moves heat instead of burning fuel, so it can deliver several units of heat for each unit of electricity. That sounds like an automatic win until you look at what you pay per kilowatt-hour versus what you pay per therm of gas. Cheap gas plus expensive electricity is how a very efficient box still raises the winter bill.

Nobody can promise your savings. The useful move is to put last January’s rates next to a simple ratio, then decide whether you are shopping a heat-pump-only system, a hybrid, or leaving the furnace alone.

What do the national numbers say?

EnergySage’s 2026 savings guide cites Rewiring America for an average household saving of $370 a year after switching to a heat pump, with a range of about $60 to $840. That average mixes oil, propane, electric resistance, and gas, so it is a crowd, not your house. The same page says heat pumps consistently save against propane, oil, and electric resistance almost everywhere, and that in warm climates replacing gas can cut heating bills by up to 69%.

EnergySage: does a heat pump save money

They also quote an NREL (National Renewable Energy Laboratory) study with a median $300 to $650 a year when people leave propane, oil, or resistance heat. That is the easy half of the table.

Against natural gas, EnergySage is more careful. Their operating-cost rule of thumb: for a heat pump to beat gas, the price per kWh generally needs to be 10% or less of the price per therm. If gas is $1.50 a therm, you want electricity around 15 cents or cheaper at their assumed efficiency. If you pay 22 cents and gas is $1.20, the heat pump can be the expensive way to make heat even though it uses less energy.

They built a state table from EIA electric and gas prices for March 2026, assuming a winter seasonal COP (that’s sCOP 2.5, meaning 2.5 units of heat per unit of electricity over the season) against an 80% AFUE gas furnace. States on the “saves vs gas” list include Texas (38%), Georgia (24%), Oregon (22%), Virginia (15%), Alabama (10%). The South shows up because winters are mild and the rate ratio cooperates. Cheap-gas, pricey-power states are simply not on that list.

EIA: Electric Power Monthly, table 5.3

EIA: U.S. natural gas prices

EIA’s own 2026 residential electricity average sat around 18.3 to 18.8 cents per kWh in the spring (April 18.83, June 18.34). Residential gas is published per thousand cubic feet and jumps in summer when a fixed customer charge is spread over almost no therms (January 2026 $13.96, June $24.09). Use a winter gas bill for heating math, not a June rate.

How do I run the napkin math on my bills?

You need four numbers, all from paper you already have:

1. What you paid per kWh last January (supply plus delivery, after the monthly customer charge if you can separate it).
2. What you paid per therm last January.
3. The furnace AFUE on the sticker, or 80% if you do not know (EnergySage’s comparison).
4. A seasonal COP for the heat pump on the bid. If they will not write one, 2.5 is the number EnergySage used. A cold-climate spec sheet that only shows COP at 47°F is not a seasonal number. The cold-climate spec sheet page is that argument.

EnergySage’s 10% shortcut is the fast filter. Divide your cents-per-kWh by 100 so it is dollars, then divide by dollars-per-therm. If that ratio is 0.10 or lower, their table says the heat pump should win on heat against an 80% furnace at sCOP 2.5. If it is 0.15 or 0.20, gas heat is probably cheaper, and you should only switch if you also kill a separate AC bill, or if you are leaving oil or propane.

Worked example, not a quote for your house. Electricity 18 cents ($0.18/kWh), gas $1.50/therm. 0.18 / 1.50 = 0.12, which is worse than 10%. The heat pump is fighting uphill on heating alone. Electricity 12 cents, same gas: 0.12 / 1.50 = 0.08, and EnergySage’s rule says the heat pump should win.

COP falling in January is the other half. At 47°F a unit might run COP 3 or 4. At 5°F a cold-climate ENERGY STAR floor is COP 1.75. The same house can save in November and lose in a polar week. Dual fuel (heat pump plus the existing furnace) exists so you can set a cutoff where gas takes over. That cutoff belongs in the bid as an outdoor temperature, not as “the thermostat figures it out.”

What about cooling?

A furnace does not cool. If you are replacing a dead AC and a dead furnace with one heat pump, the operating comparison is heat pump versus furnace plus AC, not versus furnace alone. EnergySage’s install average of $15,393 is the machine. The bill win in a hot climate is often the cooling half plus mild-winter heat.

If the furnace is five years old and only the AC died, a heat pump is a fuel switch you did not have to make. Keep the furnace, price a new AC, and run the 10% test before you throw away working gas heat.

When does the heat pump win the bill?

You are on electric resistance, baseboard, or an electric furnace. EnergySage’s predicted savings versus resistance is about 60%, because a COP of 2.5 is already two and a half times that toaster.

You are on propane or oil. Their table puts propane savings around 22% to 74% and oil from a small loss to 54%, depending on local delivered prices. A kWh needs to be less than 8% of a gallon of oil, or less than 12% of a gallon of propane, on that same EnergySage page.

You live in a state on their March 2026 gas-savings list, winters stay mostly above freezing, and your own January ratio still clears 10%.

You will run the heat pump in cooling season too, and the AC you would have bought is part of the alternative.

When does gas still win?

Your January ratio is well above 10%, gas is cheap, and winters are long. EnergySage says outright that gas remains cheap enough in many markets to offset the efficiency advantage. A Chicago-rate story on the heat-pump-vs-furnace page already flagged that a minimum-efficiency heat pump can raise the bill. That is not a moral failure of heat pumps. It is arithmetic.

A bid that models COP at 47°F all winter is lying to the spreadsheet. Ask for capacity and COP at your design temperature, then decide whether dual fuel is the honest product.

What should be on the quote if I care about the bill?

1. Seasonal COP or HSPF2, plus COP and heating capacity at your winter design temperature, not only SEER2.
2. Dual-fuel cutoff in degrees, if they are leaving the furnace.
3. Strip heat: locked out, or allowed, and what it costs per hour if it runs.
4. A written heating load (Manual J or named equivalent). An oversized unit short-cycles and never sees the COP on the sticker.
5. What they assumed for your electric rate and gas rate. If they used a national average, replace it with last January.
6. No 25C dollar on a 2026 placed-in-service date.

If Bid A “saves $800 a year” and Bid B “saves $150,” they used different rates or different COPs. Make them show the arithmetic.

How do I decide in one afternoon?

1. Pull January’s electric price per kWh and gas price per therm.
2. Run EnergySage’s 10% filter. Write the ratio on the bid.
3. Name the fuel you are leaving: resistance, oil, propane, or gas. Resistance and delivered fuels are the easy wins. Gas is the maybe.
4. If gas is the maybe and winters are nasty, price dual fuel with a cutoff, and read the cold-climate spec sheet before you sign.

The machine can be the right buy for comfort and for one outdoor box that also cools, even when the heating bill is a wash. Just do not let a national $370 average stand in for the two numbers on your bill.