Whether a heat pump or a furnace is the better choice comes down to three things: the home's heating and cooling load, local electricity and gas or propane prices, and how cold it gets at the address. A heat pump also replaces the air conditioner, so the fair comparison is a heat pump against a furnace plus AC, over the life of the system, not just the install price.
The short version: in a well-insulated home with reasonable electricity prices, a correctly sized cold-climate heat pump often costs less to run than a furnace plus AC and handles cooling with the same equipment. In a high-load home where gas is cheap, a dual-fuel system may be the better value. The only honest way to tell is to run the numbers for that house, with the assumptions on the page where the homeowner can see them.
This guide is in outline form. The full version will include worked examples with the assumptions shown.
In this guide
Operating cost, worked properly
- Cost per delivered BTU: fuel price, AFUE and heat pump efficiency at real outdoor temperatures.
- Why seasonal averages can mislead in cold climates.
- How to present the comparison with every assumption visible.
Comfort and air delivery
- Supply air temperature and how a heat pump feels compared to a furnace.
- Variable-speed equipment and long, steady cycles.
Sizing a heat pump to replace a furnace
- Start from a Manual J, not the furnace nameplate.
- Capacity at the heating design temperature under Manual S.
- Checking existing ducts for heat pump airflow.
When dual-fuel makes sense
- Switchover temperature based on cost and capacity.
- Integrated controls and rebate rules: Mass Save partial-home and NYS Clean Heat categories.
- Explaining dual-fuel to a homeowner without overselling it.
15-year cost of ownership
- Install price, rebates, energy, maintenance and expected replacements.
- Why showing ruled-out options builds trust.
- Try the heat pump vs furnace cost calculator.
Cold-climate considerations
- Balance points and backup heat in cold climate heat pump sizing.
Compare on the whole system
Use the heat pump vs furnace cost calculator for an estimated 15-year comparison with your own energy prices. Results are estimates with the assumptions listed.
Tradewright compares heat pump, furnace, boiler, mini-split and dual-fuel options side by side on 15-year cost of ownership, using prices from your own price book. See system comparison.
Questions
Is a heat pump cheaper to run than a gas furnace?
It depends on local electricity and gas prices, the heat pump's efficiency at the temperatures it runs in, and the furnace's AFUE. Compare cost per delivered BTU for the specific home rather than relying on a general answer, and show the assumptions.
Can a heat pump replace a furnace in a cold climate?
Cold-climate heat pumps can carry the full heating load in many northern homes if they are selected on capacity at the heating design temperature. Some homes are better served by a dual-fuel design that keeps a furnace for the coldest hours.
What is dual-fuel?
Dual-fuel pairs a heat pump with a fossil furnace and switches between them, usually at an outdoor temperature where the furnace becomes cheaper or the heat pump runs short of capacity. Some rebate programs require approved integrated controls when fossil heat remains in place.
Do rebate programs allow keeping the furnace?
Rules differ. Mass Save's partial-home rebate allows an existing furnace or boiler to stay, with an integrated control from its qualified list. NYS Clean Heat offers a category for full-load heat pumps with integrated controls in some territories and prohibits installing new fossil fuel equipment with an eligible heat pump.
How should I size a heat pump replacing a furnace?
Start with a Manual J heating and cooling load. Then select a heat pump under Manual S using its capacity at your heating design temperature, and check that the existing ducts can carry its airflow.
Sources
- NEEP: Guide to Sizing and Selecting Air-Source Heat Pumps in Cold Climates (accessed 2026-10-16)
- Mass Save: Air Source Heat Pump rebates and eligibility (partial-home integrated controls) (accessed 2026-10-16)
- NYS Clean Heat Heat Pump Program Manual, Version 3 (September 1, 2026), Section 2.1.2 Incentive Categories (accessed 2026-10-16)