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’s 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’re shopping a heat-pump-only system, a hybrid, or leaving the furnace alone.

$370 a year

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’s 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’s 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.

Napkin math on your bills

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

What you paid per kWh last January (supply plus delivery, after the monthly customer charge if you can separate it).

What you paid per therm last January.

The furnace AFUE on the sticker, or 80% if you don’t know (EnergySage’s comparison).

A seasonal COP for the heat pump on the bid. If they won’t 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.”

Furnace plus AC, not furnace alone

A furnace does not cool. If you’re 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 didn’t have to make. Keep the furnace, price a new AC, and run the 10% test before you throw away working gas heat.

Electric resistance, propane, or oil

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

January ratio well above 10%

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.

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.

COP on the cold night, last January’s rates

How much heat does the machine still make on your coldest nights, and how many units of heat do you get per unit of electricity over the whole winter? That’s COP or HSPF2. The cooling sticker (SEER2) doesn’t answer it.

If they’re leaving the furnace, at what outdoor temperature does gas take over? That number belongs on the bid.

Can the backup electric heat strips run, or are they locked out? If they can run, what does that cost per hour?

Did they measure this house, or pick a size from square footage? An oversized unit never hits the efficiency on the sticker.

What electric rate and gas rate did they use? If they used a national average, swap in last January.

Is anyone still subtracting the old federal 25C credit on a 2026 install? They shouldn’t.

If one bid “saves $800 a year” and another “saves $150,” they used different rates or different efficiencies. Make them show the math.

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 don’t let a national $370 average stand in for the two numbers on your bill.