Heat pumps and furnaces both heat homes, but that’s about the only thing they have in common. They vary considerably in how they work, how efficiently they perform, and how much they cost to run. If you’d like to upgrade your heating equipment, here’s how to decide on a heat pump or furnace. 

Heat Pump or Furnace? First, Know Your Energy Type

The cost to install and run a furnace varies based on the energy type. To accurately compare heat pumps and furnaces, we need to pit air-source heat pumps against both gas and electric furnaces. Air-sourced heat pumps account for around 94% of all heat pumps sold, with ground-sourced heat pumps representing just 6%. Both types of heat pumps run on electricity, so there are no differences in the compatibility of heat pump models with any home with power, and that’s statistically every American household.

It’s also important to know that heat pumps can also cool your home, which means they could replace your furnace and your air conditioning unit. As you begin your research, that’s an important advantage to remember.

Can a heat pump replace a furnace? See how these heating systems stack up! 

Gas Furnace vs. Heat Pump

Gas furnaces have heated American homes for decades, allowing time for manufacturers to design more efficient and safe systems. While it's tempting to stick with what you know—and what has worked for a century—it’s worth seeing how gas furnaces compare in purchase price, operational costs, and efficiency. 

Heat Pump Efficiency vs. Gas Furnace 

In most scenarios, heat pumps are more energy efficient (up to 3 times more) than gas furnaces. Cold-climate heat pumps operate as efficiently when it’s 5 degrees Fahrenheit outdoors as they do at 47 degrees. Gas furnaces become more efficient than heat pumps only when outdoor temperatures are below 0 degrees. Unless you live in a region where sub-zero temperatures are the norm all winter long, replacing a furnace with a heat pump is the most efficient way to go.  

Comparing the Cost of a Gas Furnace vs. Heat Pump

Gas furnaces are almost always less expensive to buy and install than heat pumps. While gas furnace prices range from $2,800 to $10,000 (or more), heat pump prices range from $5,600 to $20,000. This includes installation. The median total installation price for a heat pump in 2023 was $16,025. That price includes the equipment and a mix of federal, state, and local rebates, which vary widely by state. 

What is cheaper to run, a heat pump or a gas furnace?

Energy efficiency greatly impacts your monthly energy bill, but it doesn’t always translate to lower operating costs. For example, in areas where electricity costs are substantially higher than natural gas prices, gas furnaces will be less expensive to run. However, this is somewhat rare. In most areas of the US, residential electricity prices per kilowatt-hour are lower than prices for natural gas thermal units. Natural gas prices also tend to be more volatile.

For most households, heat pumps make more long-term sense than gas furnaces. If you live in a colder climate, your local One Hour Heating & Air Conditioning® technicians will help you decide on the most cost-effective solution based on your climate and budget. Today, roughly 51% of US homes rely on gas furnaces, but that’s expected to change over the next few decades. In 2023, heat pumps outsold gas furnaces for the second year in a row, indicating that more homeowners opt for heat pumps over gas furnaces. 

Heat Pump vs. Electric Furnace

It’s easier to compare heat pumps and electric furnaces because they use the same power source but work very differently. Like gas furnaces, electric furnaces create heat and circulate it throughout the home. Heat pumps move existing heat from one place to another, which requires significantly less energy. 

That’s not to say electric furnaces are inefficient. Energy Star® rated systems are 95-100% energy efficient, which is higher than gas furnaces’ rating. Still, heat pumps are rated 100% energy efficient and can lower electricity bills by 20-40% compared to electric furnaces, boilers, and baseboard heaters.

Furnace vs. Heat Pump Longevity

There’s one important area where furnaces still have an advantage: longevity. Both gas and electric furnaces tend to last longer than heat pumps, though it’s important to stress how factors like climate, frequency of use, and regular maintenance impact how long any heating system will last.

Here’s how long furnaces last compared to heat pumps, on average:

  • Gas furnace lifespan: 15-30 years
  • Electric furnace lifespan: 20-30 years
  • Air-source heat pump lifespan: 10-15 years

Should I Get a Heat Pump or Furnace?

In nearly every scenario, heat pumps are more energy efficient, less expensive to run, and can meet your heating and cooling needs. They can be worth the higher initial costs. These systems provide a comprehensive solution to your HVAC needs and substantially lower your home’s climate footprint.

Depending on the state of your existing heating system, you may not have to give it up entirely. Many homes in colder climates opt for a dual-fuel system based on outdoor conditions and seasonal heating needs.

Comfort, No Matter What

At One Hour Heating & Air Conditioning®, we care about your comfort. We’ll help you select the right home heating system, whether it’s a furnace or a heat pump, based on your budget and priorities. Your technician will also present any federal, state, or local rebates you may be eligible to receive to make your heating upgrade as affordable as possible. Get prompt and professional HVAC support you can count on; find a location near you or call 800-893-3523 to schedule service today!