Heat Pump vs Gas Furnace: Which Is Cheaper in 2026?
Both heat your home, but they cost very different amounts to run depending on your local electricity and gas prices. Here's how to choose in 2026, after the federal heat pump tax credit expired.
Heat Pump
Electric heating + cooling
What you enter
- Your state
- Current fuel
- Home size
- Climate
What you get
- Annual heating cost
- Annual savings
- Payback period
- 2026 incentive note
Gas Furnace
Gas heating only (needs separate AC)
What you enter
- Gas price
- Furnace efficiency (AFUE)
- Home heating need
What you get
- Annual gas heating cost
Calculator coming soon
Key differences
| Feature | Heat Pump | Gas Furnace |
|---|---|---|
| Energy source | Electricity | Natural gas |
| Also provides cooling | Yes (same unit) | No — needs separate AC |
| Efficiency | 250–400% (COP 2.5–4) | 80–98% (AFUE) |
| 2026 federal tax credit | None (25C expired) | None |
| Best when | Mild/moderate climates, or replacing oil/propane/electric, or replacing AC too | Very cold climate with cheap gas |
Which should you choose?
Choose Heat Pump if:
- You want heating and cooling in one system
- You heat with oil, propane, or electric resistance
- You live in a mild-to-moderate climate
- You're replacing an aging AC anyway
Choose Gas Furnace if:
- You have a very cold climate and cheap natural gas
- Your furnace is newer and your AC is fine
Frequently asked questions
Is a heat pump cheaper than a gas furnace in 2026?
It depends on your local prices. Against cheap natural gas, running costs can be similar; against oil, propane, or electric heat, a heat pump is much cheaper. The federal tax credit ended Dec 31, 2025, so factor in full upfront cost unless your state offers a rebate.
Does a heat pump replace both my furnace and AC?
Yes. A heat pump both heats and cools, so it can replace a furnace and an air conditioner with one system — which often makes the total cost competitive.
Do heat pumps work in cold climates?
Modern cold-climate heat pumps work efficiently well below freezing, with backup heat on the coldest days. Efficiency drops as it gets colder, so the savings case is strongest in milder climates.
Related comparisons
Figures reflect 2026 post–One Big Beautiful Bill Act rules and are general estimates; your results will vary. Not financial advice.