Skip to main content

Heat Pump vs Furnace Calculator — Operating Cost & Payback

Should you replace your gas furnace with a heat pump? Enter your annual gas heating cost, local gas and electricity prices, and installation quotes — see the heat pump's annual operating cost, your yearly savings, and the payback period after rebates. Free.

A heat pump moves heat instead of making it, delivering 2–4 units of heat per unit of electricity (its COP). Whether it beats a gas furnace on operating cost depends entirely on your local price ratio: at typical rates of $1.40/therm gas and $0.15/kWh electricity, a COP-3 cold-climate heat pump costs about the same to run as a 92% furnace — but rebates of $5,000–$10,000+ (e.g. federal and provincial programs in Canada, IRA credits in the US) often decide the economics. This calculator converts your real gas bill into delivered heat, prices the same heat through a heat pump, and computes payback on the incremental cost after rebates.

Inputs

The heating portion of your gas bill (exclude water heater/stove ~$200–300/yr)

CA$
CA$
CA$

Modern condensing furnace: 90–98% · Older furnace: 60–80%

%
💡
CA$

What a like-for-like furnace replacement would cost — the fair comparison if your furnace is due anyway

CA$
CA$

Results

Payback Period

180.1 years

Annual Operating Savings

$44

Positive = heat pump is cheaper to run

Heat Pump Annual Cost

$1,156

Incremental Cost (after rebates)

$8,000

Annual Heat Delivered (MMBTU)

78.86

Understanding This Calculator

Learn how to compare heating with electricity via a heat pump against burning gas in a furnace, using your actual gas bill as the starting point.

How the math works

The comparison starts from what you already spend:

  1. Therms burned = annual gas heating cost ÷ gas price per therm
  2. Useful heat = therms × 100,000 BTU × furnace efficiency (a 92% furnace loses 8% up the flue)
  3. Heat pump electricity = useful heat ÷ 3,412 ÷ COP — COP (coefficient of performance) is the heat pump's multiplier: at COP 3, one kWh of electricity delivers three kWh of heat
  4. Annual savings = gas cost − (heat pump kWh × electricity price)

For payback, only the incremental cost matters if your furnace needs replacing anyway: (heat pump install − furnace replacement − rebates) ÷ annual savings.

Worked example

A home spending $1,500/year on gas heat at $1.25/therm, with a 92% furnace, considering a cold-climate heat pump with seasonal COP 3.0 and electricity at $0.11/kWh:

  1. Therms = 1,500 ÷ 1.25 = 1,200; useful heat = 1,200 × 100,000 × 0.92 ≈ 110 million BTU
  2. Heat pump needs 110,400,000 ÷ 3,412 ÷ 3.0 ≈ 10,800 kWh → about $1,190/year
  3. Savings ≈ $310/year
  4. If the install costs $19,000 versus a $7,000 furnace with $7,000 in rebates, incremental cost is $5,000 → payback ≈ 16 years

How to read the result

The verdict hinges on the ratio of electricity to gas prices and on the real seasonal COP for your climate — cold-climate units average COP 2.2–3.0 over a heating season, well below the rating-sticker maximum. Where gas is cheap and electricity dear (much of North America), savings are modest and payback long; where the ratio reverses, or generous rebates apply, heat pumps win clearly.

  • Compare using seasonal COP for your climate zone, not the nameplate figure.
  • Time the decision to furnace end-of-life — the incremental cost, not the sticker price, drives payback.
  • A heat pump also provides high-efficiency air conditioning, a real benefit this model does not price in.
  • Get quotes and confirm current rebates (federal, provincial/state, and utility programs change yearly).

Frequently Asked Questions