How a heat pump saves energy
A gas furnace turns the energy in gas into heat with an efficiency of 80% to 98%. A heat pump moves heat from outdoor air into the house, delivering 2.5 to 4 units of heat for each unit of electricity over a heating season. Whether that makes it cheaper depends on the price of electricity relative to gas.
The formulas
- Heat delivered = gas use × 29.3 kWh per therm × furnace efficiency
- Heat pump electricity = heat delivered ÷ seasonal COP
- Heat pump cost = heat pump electricity × price per kWh
- Break-even electricity price = gas cost ÷ heat pump electricity
Worked example
A home burns 700 therms of gas a year for heating in a 90% furnace, with gas at $1.80 per therm and electricity at $0.17 per kWh:
- Heat delivered: 700 × 29.31 × 0.90 ≈ 18,460 kWh.
- Gas cost today: 700 × 1.80 = $1,260.
- A heat pump with a seasonal COP of 3.0 uses 18,460 ÷ 3 ≈ 6,150 kWh, costing $1,046.
- Savings: about $214 a year. Electric baseboard heat would cost $3,139.
- Break-even electricity price: $1,260 ÷ 6,150 ≈ $0.20 per kWh.
If the heat pump costs $3,000 more than replacing the furnace and air conditioner, the payback is about 14 years.
What drives the result
| Factor | Effect |
|---|---|
| Electricity-to-gas price ratio | The biggest factor; time-of-use or heat pump rates can help |
| Seasonal COP | Cold-climate models keep a COP above 2 well below freezing |
| Furnace efficiency | Replacing an old 70% furnace makes the heat pump look much better |
| Climate | Milder winters mean higher average COP |
| Air conditioning | A heat pump also cools, so compare it with replacing both systems |
Converting ratings
US heat pumps are rated by HSPF2. Divide by 3.412 for an approximate seasonal COP: HSPF2 7.5 ≈ COP 2.2, HSPF2 9 ≈ COP 2.6. Real performance depends on climate, sizing and installation; a well-sized system with proper ducts can beat the rating.
Incentives
The federal tax credit for heat pumps ended for equipment installed after 2025. Many utilities and state energy programs still offer rebates, sometimes large ones for income-qualified households, and some utilities offer lower electricity rates for homes heated by heat pumps.
Beyond cost
Heat pumps remove combustion from the home, provide air conditioning and, as the grid adds renewable power, cut carbon emissions. A blower door test and air sealing before installation can reduce the size, and the cost, of the system you need.