On running cost alone, at US average prices, a new 95% gas furnace costs less than a heat pump unless the heat pump averages a seasonal COP above about 3.5. That is higher than every seasonal field average we have read. Against an 80% furnace the line drops to about 3.0, against propane to about 1.6 and against heating oil to about 1.0. Your state moves the gas lines a long way, and the right answer also depends on what is failing and what your house can take.
The Last Furnace sells and installs nothing, and in plenty of houses the honest answer is that the furnace stays. This guide runs in the order the decision usually happens, from the math to the quote. It is general information, not professional, tax or legal advice.
Start with the price of the same heat
COP means units of heat delivered per unit of electricity used. COP 1 is an electric heater; COP 3 is three units of heat for one of power. Here is one million Btu delivered into the house at US average prices.
| Heat source | Cost per million Btu delivered |
|---|---|
| Gas furnace, 95% | $15.01 |
| Heat pump, COP 3 | $17.74 |
| Gas furnace, 80% | $17.82 |
| Heat pump, COP 2.5 | $21.29 |
| Propane furnace, 90% | $33.17 |
| Heating oil furnace, 85% | $52.95 |
| Electric furnace or emergency heat, COP 1 | $53.22 |
The arithmetic is ours, and the efficiencies and COPs are assumed examples. Prices: electricity at 18.16¢/kWh, August 2026, preliminary; gas at $14.77/Mcf, first quarter of 2026; heating oil at $6.233 and propane at $2.73 a gallon on 26 October 2026, before tax; all EIA, with EIA’s Btu factors.
Divide the electric heat figure by your fuel’s figure and you have the break-even COP: $53.22 ÷ $15.01 = 3.55 for the 95% furnace. If a heat pump averages more than that over a winter, it costs less to run. If less, the furnace does. Our full heat pump vs furnace comparison gives the line for every state but Alaska and Hawaii: about 2.1 in Louisiana, 2.7 to 2.9 in Georgia, 4.6 to 5.0 in Ohio and 5.9 to 6.2 in Michigan, depending on whose gas price you use.
EIA’s monthly gas price was $27.05 per Mcf in August 2026, because homes use very little gas in summer. Use it and a COP 3 heat pump looks like the clear winner; use the winter price and it loses to a 95% furnace. And a rating is not a measurement of your house. A British Columbia field study estimated averages of 2.4 for ductless, 2.6 for central single-stage and 3.3 for central variable-speed, that last from two homes. Single homes there and in a northeastern Building America study ran from 1.1 to 3.4. Those are older machines in particular homes, not a forecast for yours.
Run your own bills
If you burn natural gas, use the heat pump vs gas furnace calculator. In its US example, a COP 3.0 heat pump costs $637 a year for heat, against $640 for an 80% furnace and $539 for a 95% one. A negative saving means the furnace costs less to run, and that is a normal result.
If you burn oil or propane or heat with electric resistance, use the oil, propane and electric heat savings calculator. Its Maine example saves about $685 a year at COP 2.5 with oil at $6.040. At last year’s $3.249, it flips and the oil heat costs $504 less, so enter the price you actually paid.
To see what lands on the power bill, read how much electricity a heat pump uses. Our US example comes to about 5,500 kWh a year, but the bill rises by about 3,000, because that home already runs a furnace fan and an air conditioner.
When a furnace is the better call
- Your gas is cheap against your power. A line above about 4 is beyond every rating and field figure in our comparison table. An example Ohio home pays about $370 a year more at COP 3 than with a new 95% furnace, or about $320 on Ohio’s own gas price.
- Only the furnace has failed and your central AC is young. In a December 2023 survey of 64 California contractors, a published estimate for a defined simple 3-ton job with no panel upgrade and no new ducts, a heat pump averaged $8,958 more than a like-for-like gas furnace. Part of that buys cooling you already own.
- Your winters are very cold and you have no backup plan. One maker’s sheet for an ordinary 3-ton ducted unit lists 66% of its 47°F capacity at 17°F, while the house needs more heat. Below the point where it can’t keep up, electric strips run at COP 1, the $53 line above.
- Your ducts or electrical service need major work. The California survey assumed neither.
- Your house loses power in storms. A furnace needs electricity too, but far less than a heat pump.
When a heat pump is the better call
- You heat with oil, propane or electric resistance. Those lines run from about 1 to 2.3. Propane is the less automatic case: in the Upper Midwest its line sits above 2.
- Your line is under 3. On state gas prices that includes Arkansas, Arizona, Texas, Georgia and Oregon, most with mild winters that help the COP.
- Your AC and furnace are both near the end. The California survey averages the extra at $583.
- You have no gas line, or you would drop gas altogether. The fixed gas charge only goes if every gas appliance goes.
The middle road: keep both
A heat pump can replace a worn-out central AC and leave the furnace in place. That is dual fuel, with a switchover temperature you can work out from your prices and your model’s published data. For one example pair at US prices, the cost line falls near 27°F. In Georgia the same pair runs on the heat pump down to about 12°F. In Ohio the furnace is cheaper at every temperature on the sheet, so a heat pump beside a working furnace may not lower the bill.
The extra over a new AC averaged $1,424 in the California survey, but replacing a working AC starts from the whole price. Efficiency Maine says dual fuel systems are not rebate eligible, so read your program’s rules first.
If your heat pump has already failed
Our guide to repairing, replacing or going back to gas starts with the failed part, named in writing. By our judgment, a capacitor or fan motor often leans repair, even on an old unit; a compressor out of warranty on an older unit leans replace. Going back to gas is a normal decision. It fits when gas is already at the house, your break-even COP is well above what heat pumps reach, and you have priced cooling and venting.
What changes when the furnace goes
Most of this is manageable, but none of it shows up on a one-line quote. Read what changes in the house when a furnace comes out before you sign. Three items matter most:
- The water heater. A gas water heater that shared a flue with the furnace can be left on one too big for it: orphaned, as DOE’s furnace rule puts it for a condensing swap, and the same after a removal, by our reasoning. EPA lists back-drafting from furnaces and gas water heaters as a carbon monoxide source, so have a qualified person check it. CPSC says to put CO alarms on every level and outside sleeping areas.
- Pipes. New York’s Clean Heat program warns that furnace waste heat can keep basement pipes from freezing. Ask where your water lines run.
- Ducts. A heat pump may need more airflow than your ducts carry, at air that is warm rather than hot. An installer should measure, not judge by eye.
Our cold climate guides cover capacity at low temperatures, the sizing guides cover load and balance point, and mini splits are a separate choice.
Before you sign
Our guide to what a heat pump installation should include lists what to get in writing: a room-by-room load calculation, the maker’s capacity at your design temperature, measured airflow, the backup heat setup and a filled-in start-up sheet. If no installer near you will commit to that, a well-installed furnace is a better buy than a poorly installed heat pump. That last line is our judgment.
Check the money too, because much of it has moved. The federal 25C credit does not apply to property placed in service after 31 December 2025. DOE Program Notice 26-2, effective 29 May 2026, removed fuel switching from the federal HEEHR rebate, formerly HEAR. Its text doesn’t settle what happens to a gas home that keeps its furnace, so ask your state energy office. Our rebates and rules guide sets out what we have read, and the program decides what qualifies.
Sources checked on 4 November 2026.
