Heat Pump vs. Gas Furnace: Operating Cost, COP, and the Break-Even Electricity Rate
October 29, 2026
The cost of heating depends on the price of the energy and how efficiently the equipment converts it to heat. A gas furnace has an efficiency (AFUE) such as 95%. A heat pump moves heat instead of generating it, and its efficiency is expressed as a coefficient of performance (COP): a COP of 3 means 3 units of heat delivered per unit of electricity. Electric resistance heat has a COP of 1.
To compare costs, use a common unit: 100,000 BTU (1 therm) of delivered heat. One kWh = 3,412 BTU, so 100,000 BTU = 29.31 kWh.
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Gas furnace at 95% and $1.40 per therm: 1 ÷ 0.95 = 1.053 therms of gas, costing $1.47. Heat pump at COP 3 and $0.16 per kWh: 29.31 ÷ 3 = 9.77 kWh, costing $1.56. At COP 2 (very cold weather): 14.65 kWh, or $2.34. Electric resistance (COP 1): 29.31 kWh, or $4.69. The break-even COP against this gas furnace is 29.31 × $0.16 ÷ $1.47 = 3.2. With cheaper electricity at $0.12/kWh, the COP 3 heat pump costs $1.17, well below gas. Local rates therefore decide the outcome; the ratio of electricity to gas prices is key.
| Heating method | Energy used per 100,000 BTU | Cost |
|---|---|---|
| Gas furnace 95%, $1.40/therm | 1.053 therms | $1.47 |
| Heat pump COP 3, $0.16/kWh | 9.77 kWh | $1.56 |
| Heat pump COP 3, $0.12/kWh | 9.77 kWh | $1.17 |
| Heat pump COP 2, $0.16/kWh | 14.65 kWh | $2.34 |
| Electric resistance, $0.16/kWh | 29.31 kWh | $4.69 |
Annual Cost Example
If a house needs 60 million BTU of heat per year: a 95% gas furnace uses 631.6 therms, costing $884 at $1.40 per therm. A heat pump at an average seasonal COP of 3 uses 60,000,000 ÷ 3,412 ÷ 3 = 5,862 kWh, costing $938 at $0.16 per kWh, or $703 at $0.12. The heat pump also provides cooling in summer. Many modern cold-climate heat pumps maintain a COP of about 2 at 5°F and 3 or more at 47°F, so the seasonal average depends on the climate.
Other Factors
Equipment cost and incentives (federal tax credits, utility rebates), installation, whether ductwork is needed, carbon emissions (it depends on the electricity grid), the cost of a gas connection, time-of-use electricity rates, and the potential for solar to supply electricity. Gas and electricity prices change over time; do the calculation with the current rates. Include fixed monthly charges: if you drop gas entirely, you also avoid its connection fee.
Decision Tips
Get quotes for both systems, ask contractors to size using a load calculation (Manual J), and compare lifetime costs over 15 years, not just the purchase price. This article gives simplified illustrations.
Frequently Asked Questions
What is COP?
Heat delivered per unit of electricity used.
How many BTU are in a kWh?
3,412.
What COP matches a 95% gas furnace at these prices?
About 3.2.
Does the heat pump COP change with the weather?
Yes, it falls in colder temperatures.
What else should I consider?
Installation cost, incentives, climate, and local energy prices.