Heat pump vs furnace

A furnace burns fuel and is rated by AFUE — annual fuel utilisation efficiency. A 96% AFUE furnace turns 96 percent of the fuel's energy into delivered heat. It cannot exceed 100 percent, because it is making heat.

A heat pump does not make heat, it moves it. Its rating, COP, is delivered heat divided by electricity consumed, and at 47°F outdoors a decent one runs COP 3.0 to 4.0 — 300 to 400 percent, in furnace language. Even at 17°F, a cold-climate inverter unit holds COP 2.0 to 2.5.

That is the whole story on the physics side. What decides your bill is that gas and electricity are priced differently per unit of energy, so the comparison is cost per delivered BTU, not efficiency.

Rough arithmetic at typical 2026 US rates: - Gas at $1.40 per therm, 96% AFUE: about $14.60 per million BTU delivered. - Electricity at $0.16/kWh, heat pump at COP 3.0: about $15.60 per million BTU. - Same electricity, COP 2.2 in cold weather: about $21.30. - Electric resistance strip heat, COP 1.0: about $46.90.

At those numbers gas and a heat pump are close to a tie in mild weather and gas wins in cold weather. Move to $0.13 electricity or $1.90 gas — both common — and the heat pump wins outright most of the season. Run your own two numbers off your last bills before believing anyone, including me.

Buy a heat pump alone if: you are in IECC zone 1 through 4, you have no gas service, or you have gas but the run is a propane tank. Propane at $2.80 a gallon is more expensive per BTU than electricity at almost any residential rate, and people on propane are the most reliably underserved by this decision.

Buy dual fuel if: you are in zone 5 or 6, you already have gas, and you already need to replace the air conditioner. The heat pump handles everything down to a changeover point you set — usually where the two cost curves cross, often 30 to 35°F — and the gas furnace takes the coldest hours. You are buying one extra outdoor unit's worth of capability and getting the cheaper source at every temperature.

Buy a furnace alone if: you are in zone 6 through 8 with cheap gas, you have no need for central cooling, or the budget genuinely will not stretch and the existing air conditioner has years left.

What I would not do is install a standard-efficiency heat pump with electric strip backup in a cold climate and no controls discipline. Strips are resistance heat at COP 1.0 and a badly configured thermostat brings them on every time the setpoint jumps two degrees. That is the setup behind most of the horror-story electricity bills people attribute to heat pumps.

Two separate things degrade in the cold and people run them together.

Capacity falls. A heat pump's output at 17°F might be 60 to 70 percent of its 47°F rating, because there is less heat in the outdoor air to move. Size it against the design-temperature output, not the nameplate, or the balance point lands above your coldest nights and the backup runs constantly.

Efficiency falls. COP drifts from 3.5 down toward 2.0 as it gets colder. Still better than resistance heat by a wide margin, and often still better than gas.

Modern cold-climate units — variable-speed inverter compressors, vapour injection — hold rated capacity to 5°F and produce useful heat down to -13°F. NEEP maintains a public list of units with their measured output at 5°F and 17°F, and that list is more useful than any brochure.

Then there is defrost. Below about 40°F with humidity, frost forms on the outdoor coil and the unit reverses for a few minutes to melt it, which means it is briefly air conditioning your house. Steam off the outdoor unit is defrost working, not a fault. A well-set-up system runs defrost on demand rather than on a timer, and it should not take more than about ten minutes an hour in bad conditions.

A gas furnace delivers supply air at 120 to 140°F. Skin is about 92°F, so that air feels hot.

A heat pump delivers 90 to 105°F. That is warmer than the room and it heats the house perfectly well, but it is at or just above skin temperature, so standing in front of a register feels like a draught. Nothing is broken. The physics of a heat pump make high supply temperatures inefficient — the whole gain comes from keeping the temperature lift small.

Three things make it a non-issue in practice, and they are all install decisions:

Run the system in long low-speed cycles. A variable-speed unit at 40 percent capacity for an hour is quieter, drier and more comfortable than a single-stage unit blasting for twelve minutes and stopping. This is the single biggest reason to pay for an inverter model.

Aim the registers away from where people sit. A furnace forgives bad register placement because the air is hot. A heat pump does not.

Stop setting back the thermostat 8 degrees at night. A heat pump recovering from a deep setback calls the backup strips, and you spend at COP 1.0 what you saved at COP 3.0. Set it and leave it, or use a thermostat with adaptive recovery that knows not to stage the strips.

Installed, 3-ton equivalent, replacing existing equipment with usable ductwork:

• Gas furnace alone, 80% AFUE: $3,500 to $6,000.
• Gas furnace alone, 96% AFUE: $5,000 to $9,000. The condensing unit needs a PVC flue and a condensate drain, which is part of why it costs more to fit.
• Air conditioner plus furnace: $8,000 to $14,000.
• Standard heat pump with air handler: $7,000 to $13,000.
• Cold-climate inverter heat pump: $12,000 to $20,000.
• Dual fuel, heat pump plus gas furnace: $11,000 to $18,000.
• Ducted retrofit where no ducts exist, or ductless multi-zone: $4,000 to $6,000 per indoor head.

The federal 25C credit covers 30 percent of a qualifying heat pump up to $2,000 a year, and state and utility rebates stack on top — in some states they are large enough to close the gap entirely. Check the current program before you sign, because these change.

Lifespan is roughly a wash and slightly favours the furnace: 15 to 20 years for a furnace, 12 to 15 for a heat pump, which runs year-round rather than seasonally.

Get a Manual J load calculation. Not a rule of thumb per square foot, not "your old one was 4 tons so we'll do 4 tons" — the old one was probably oversized too. Oversized equipment short-cycles, never reaches steady-state efficiency, and in a humid climate does not run long enough to dehumidify, which is how a house ends up at 72°F and clammy.

Then check the ducts, because they will undo the equipment. Typical residential duct leakage is 20 to 30 percent of airflow, much of it into an unconditioned attic. Sealing and insulating the runs is usually a smaller cheque than upsizing the equipment and it improves everything downstream. If the existing trunk is undersized, a variable-speed unit will run at high static pressure, get loud, and lose the efficiency you paid for.

And insulate first if the envelope is poor. Every improvement to the shell shrinks the equipment you need, and shrinking the equipment is the only HVAC saving that recurs forever.