Guide
Heat Pump vs Furnace: Which Is Better?
Published / updated October 2026 · Costs are 2026 national estimates
The short answer
A heat pump can be a strong choice if you want one efficient system for both heating and cooling, especially in mild or moderate climates. A furnace can still make sense where winters are severe, natural gas is inexpensive, or your home already has a suitable furnace setup. Modern cold-climate heat pumps have greatly improved low-temperature performance, and some homes use both together as a dual-fuel system.
The right pick depends on your climate, electricity and fuel prices, existing equipment and ducts, heating load, cooling needs, the specific model and installation cost.
Heat pump vs furnace at a glance
| Heat pump | Furnace |
|---|---|
| How it heats | |
| Moves heat from outdoor air into the home | Burns gas, propane or oil — or uses electric resistance |
| Heating + cooling? | |
| Yes — most central units reverse to cool | Heating only; cooling needs a separate AC |
| Efficiency rating | |
| HSPF2 (seasonal) and COP (at a set temperature) | AFUE (% of fuel turned into useful heat) |
| Cold weather | |
| Cold-climate models are tested at 5°F; output drops as it gets colder | Output doesn't depend on outdoor temperature |
| Energy source | |
| Electricity | Natural gas, propane, oil or electricity |
| 2026 installed cost (national) | |
| ≈ $4,237–$7,942 most installs (Angi); ≈ $10,575 avg (This Old House) | ≈ $2,823–$6,897 most installs (Angi) |
| Existing ducts | |
| Central units use ducts; airflow needs may differ — have them checked | Usually reuses existing ducts |
| Backup heat | |
| Some homes add electric strips or keep a furnace (dual fuel) | Usually none needed |
| When to get it evaluated | |
| ENERGY STAR: when more than ~10 years old | Varies with use, maintenance and install quality |
| Often a good fit | |
| Homes needing heat and AC; mild-to-moderate climates; favorable electricity prices | Severe winters with cheap gas; good existing furnace setup |
No universal winner — the rest of this guide explains how each row plays out for your home.
How each system works
Heat pump
A heat pump moves heat instead of making it. In winter it pulls heat out of outdoor air — even cold air holds some — and pumps it inside. In summer, most central air-source heat pumps run in reverse and work as an air conditioner.
Because it moves heat rather than burning fuel, ENERGY STAR says an air-source heat pump can deliver up to three times more heat energy to a home than the electrical energy it consumes (ENERGY STAR). That "up to" matters: the ratio changes with outdoor temperature and equipment.
Furnace
A furnace makes heat and blows warm air through your ducts. Gas, propane and oil furnaces burn fuel; electric furnaces use resistance heating elements. A furnace only heats, so homes with central cooling pair it with a separate air conditioner.
Efficiency: AFUE vs HSPF2 and COP
Furnace and heat-pump ratings measure different things, so you can't line the numbers up directly.
- AFUE (furnaces) — the share of fuel energy turned into useful heat over a heating season. ENERGY STAR gas furnaces must hit 95% AFUE or more in the U.S. South and 97% or more in the North; oil furnaces 87% or more (ENERGY STAR criteria).
- HSPF2 (heat pumps) — a seasonal heating rating: total heat delivered over a standard heating season divided by the electricity used, in Btu per watt-hour. Higher is better.
- COP (heat pumps) — heat delivered divided by electricity used, at a specific test condition. A COP of 2 means twice as much heat energy out as electrical energy in, at that temperature (ENERGY STAR criteria).
A heat pump's COP is above 1 in normal operation, while no furnace's AFUE reaches 100%. But that doesn't mean a heat pump is automatically cheaper to run — electricity and fuel are priced differently. See operating cost below.
Do heat pumps work in cold weather?
Yes. Modern cold-climate heat pumps keep heating at temperatures well below freezing. ENERGY STAR says they use advanced compressors and refrigerants that improve low-temperature performance, and its cold-climate certification tests performance at 5°F (ENERGY STAR). Some models keep running below 5°F.
To earn the ENERGY STAR Cold Climate designation, a heat pump must, at 5°F, reach a COP of at least 1.75 and keep at least 70% of its 47°F heating capacity (criteria). Those numbers apply only to qualifying models — not every heat pump.
What to keep in mind:
- Heating output and efficiency drop as outdoor temperature falls.
- Performance varies a lot from model to model.
- Every home's heating load is different.
- Some homes and climates still call for backup heat.
- The system has to be sized correctly.
There's no single temperature where all heat pumps "stop working." A contractor should compare the manufacturer's low-temperature performance data with your home's actual heating load.
There's also a third option: heat pump + furnace
A dual-fuel (hybrid) system pairs a heat pump with a furnace. The heat pump heats when conditions favor it, and the furnace takes over when it makes more sense. ENERGY STAR suggests this if you have a relatively new furnace but an older central AC, or you're adding central AC to a furnace (ENERGY STAR).
The switchover point isn't universal. It depends on the equipment, outdoor temperature, electricity and fuel prices, controls and your heating load.
Heat pump vs furnace cost (2026)
These are national planning ranges, not quotes. Your price depends on size, efficiency, ductwork, climate needs and local labor.
Heat pump
- Angi (August 2026): average about $6,088; most professional installs about $4,237–$7,942; air-source about $4,500–$8,000. Angi notes system type, capacity, efficiency, ductwork and climate affect price (Angi).
- This Old House (August 2026): about $10,575 average for an installed central heat pump (This Old House).
Those two estimates are far apart. National cost datasets survey different projects and use different methods, so treat any single "average" with caution.
Furnace
- Angi (September 2026): national average about $4,814; most installs about $2,823–$6,897 (Angi).
- By fuel: electric $2,000–$7,000; natural gas $3,800–$10,000; oil $6,750–$10,000; propane $3,700–$14,200.
Estimate your furnace replacement cost with our calculator, which starts from these fuel ranges.
Compare whole systems, not just boxes
A furnace only heats; a heat pump usually heats and cools. If you also need air conditioning, comparing "furnace price vs heat pump price" is misleading. If you're replacing both your furnace and AC, get quotes for:
- a new furnace plus central AC,
- a heat pump on its own, and
- a heat pump plus furnace (dual fuel).
Operating cost: who's cheaper to run?
Neither is always cheaper. Running cost depends on:
- your electricity rate and how your utility structures it,
- your natural gas, propane or oil price,
- outdoor temperatures through the winter,
- the heat pump's COP at those temperatures and the furnace's AFUE,
- your home's heating load, and
- how often backup heat runs.
Residential electricity prices vary widely from state to state (U.S. EIA), and heating-fuel prices vary too. That's why a national article can't honestly name one winner. Ask contractors for an estimated annual heating cost using your actual utility rates.
Lifespan
ENERGY STAR suggests having HVAC equipment evaluated by a professional once it's more than about 10 years old or no longer keeping you comfortable (ENERGY STAR). That's a check-up guideline, not a lifespan. Actual service life depends on climate, runtime, maintenance, installation quality and equipment quality. Keep in mind a heat pump runs in summer and winter, while a furnace runs only in the heating season.
Which one fits your home?
A heat pump may make more sense if…
- You need both heating and cooling
- Your AC also needs replacing
- Your climate suits the model you're considering
- Local electricity prices are favorable
- You'd rather avoid on-site combustion for main heat
- A properly sized cold-climate model can meet your heating load
A furnace may make more sense if…
- You already have a suitable furnace setup
- Your cooling system doesn't need replacing
- Local fuel prices strongly favor your furnace fuel
- A contractor finds it's the better match for your heating load and climate
Dual fuel may make more sense if…
- You want heat-pump heating and cooling with furnace backup
- You have a fairly new furnace but an aging AC
- Your climate or energy prices make a hybrid attractive
Tax credits and rebates in 2026
The federal Energy Efficient Home Improvement Credit ended for property placed in service after December 31, 2025 (IRS Form 5695 instructions). That was the credit many older articles describe for heat pumps and furnaces, so there is no current federal heat-pump tax credit to claim for new 2026 installs.
State and local governments and utilities may still offer rebates or incentives. Programs change often, so check with your utility and state energy office before you buy.
Federal incentive status checked: October 2026.
Whichever system you choose, proper sizing matters
ENERGY STAR recommends that your contractor verify system size using an ACCA Manual J heating and cooling load calculation (ENERGY STAR). Don't size a heat pump or furnace from square footage alone.
Use our Furnace Size Calculator for a preliminary planning estimate. It's a rule-of-thumb tool, not a Manual J calculation — see how it works.
Frequently asked questions
Is a heat pump better than a furnace?
Neither wins everywhere. A heat pump is often a strong pick if you need both heating and cooling and your climate and electricity prices suit it. A furnace can still make sense with severe winters, cheap fuel, or a good existing setup.
Is a heat pump cheaper to run than a gas furnace?
It depends on your local electricity and gas prices, your winter temperatures and the specific equipment. Prices vary widely by state, so there's no honest national answer.
Do heat pumps work below freezing?
Yes. Modern cold-climate heat pumps keep heating well below 32°F. Capacity and efficiency fall as it gets colder, and how much depends on the model.
What happens to a heat pump at 5°F?
ENERGY STAR Cold Climate models must still reach a COP of at least 1.75 at 5°F and keep at least 70% of their 47°F heating capacity (criteria). Models without that designation may do less.
Do I still need a furnace if I have a heat pump?
Not always. Many homes rely on a heat pump alone, sometimes with electric backup. Whether yours can depends on its heating load and the heat pump's low-temperature output — a contractor can compare the two.
Can I use a heat pump with my existing furnace?
Often, yes — that's a dual-fuel system. ENERGY STAR suggests it if you have a relatively new furnace and an older central AC (ENERGY STAR).
Which lasts longer, a heat pump or furnace?
Service life varies with climate, runtime, maintenance and installation quality. A heat pump runs year-round (heating and cooling), which adds wear compared with a heating-only furnace. ENERGY STAR suggests a professional evaluation once HVAC equipment passes about 10 years.
Is a heat pump more efficient than a furnace?
Their ratings aren't directly comparable. A heat pump can deliver more heat energy than the electricity it uses; a furnace's AFUE tops out below 100% of its fuel. Which costs less per unit of heat depends on your energy prices.
Does a heat pump replace an air conditioner?
A central air-source heat pump also cools, so it can take the place of a central AC.
Is there still a federal heat-pump tax credit in 2026?
No. The federal Energy Efficient Home Improvement Credit ended for property placed in service after December 31, 2025 (IRS). State, local or utility programs may still offer rebates.
Can a heat pump heat my whole house?
A properly sized central heat pump can, if its output at your coldest typical temperatures meets your home's heating load. That needs a real load calculation, not a square-foot guess.
Should I replace my furnace and AC with a heat pump?
If both are near the end of their life, it's worth pricing a heat pump against a new furnace plus AC and against dual fuel. Compare total installed cost and expected energy bills for your area.
Keep going
- Estimate your heating load
- Furnace replacement cost calculator
- All furnace calculators
- Every source we used
Educational information only — not advice from a licensed HVAC contractor. Listing a source doesn't mean it endorses FurnaceCalculator.com.