Heat Pump vs Furnace Calculator

A heat pump does not create heat, it moves it, and that distinction is the entire reason the economics work. An electric resistance heater converts one unit of electricity into one unit of heat and cannot do better — that is a hard physical ceiling. A heat pump uses electricity to move heat from outside to inside, and typically delivers two and a half to four units of heat per unit of electricity consumed. Its coefficient of performance is greater than one because it is not converting energy, merely relocating it.

Whether that translates into lower bills depends entirely on the ratio between electricity and fuel prices where you live. Against electric resistance heating, a heat pump wins overwhelmingly and essentially always. Against natural gas the comparison is genuinely close and varies by region: cheap gas and expensive electricity can make a gas furnace cheaper to run despite being far less efficient in absolute terms. Against propane and heating oil, which are typically expensive per delivered BTU, heat pumps usually win comfortably.

Efficiency falls as outdoor temperature drops, since there is less ambient heat to extract. This was once a decisive objection and is much less so now — cold-climate models maintain useful capacity well below freezing, and are in service throughout Scandinavia and the northern United States. Many installations nonetheless retain the existing furnace as backup for the coldest days, which is often the best answer economically as well as practically since it lets you size the heat pump for the bulk of the season rather than the extreme.

The most common error in evaluating the switch is comparing the heat pump's full installed cost against nothing. If your furnace is fifteen years old and will need replacing soon, the relevant number is the difference between the two systems, not the total. Once rebates are applied, that premium is frequently modest, and it is the figure the payback period should be calculated against.