Heat pump vs. furnace: which costs less?
A gas furnace is usually cheaper to install, about $3,500 to $7,500, while a ducted air-source heat pump costs $4,000 to $12,000. But a heat pump also replaces your air conditioner, and it can cost less to run where electricity is cheap or gas isn't available.
Installed cost compared
$3,500 vs. $4,000+furnace vs. ducted heat pump (low end)
A furnace starts around $3,500 installed. A ducted heat pump typically costs $4,000 to $12,000, and premium whole-home heat pump projects reach $25,000. If you also need a new AC, the heat pump often wins on total cost.
Side-by-side
| Gas furnace | Air-source heat pump | |
|---|---|---|
| Installed cost | $3,500 – $7,500+ | $4,000 – $12,000 |
| Also provides cooling? | No (needs a separate AC) | Yes |
| Typical running cost | Low where gas is cheap | $40 – $160/month |
| Best climates | Cold winters | Mild to moderate; cold-climate models for cold areas |
| Lifespan | 15 – 25 years | 10 – 20 years |
| Fuel | Natural gas, propane or oil | Electricity |
If you need heating and cooling
| Option | Typical installed cost |
|---|---|
| Gas furnace + central AC | $5,000 – $11,000 |
| Heat pump only | $4,000 – $12,000 |
| New heat pump + new gas furnace (dual fuel) | $7,800 – $18,000 |
When an old furnace and AC are both near the end of their lives, a heat pump alone (or a dual-fuel pair) is often the cheapest path.
Which should you choose?
- Cheap natural gas and very cold winters: a high-efficiency furnace (or dual fuel) is usually cheapest to run.
- No gas line, or expensive propane/oil: a heat pump usually wins.
- Mild climate: a heat pump handles heating and cooling efficiently.
- Only replacing heating, AC is new: a furnace is simplest.
How to get a fair quote
- Get at least three written quotes that list the brand, model number, size (tons or BTU) and efficiency rating.
- Ask whether the price includes permits, removal of the old unit, refrigerant, a new thermostat and any duct or electrical work.
- Ask for a load calculation (Manual J) instead of matching the old unit's size by default.
- Compare labor warranties (1 to 10 years) as well as the manufacturer's parts warranty, and register the equipment.
- Schedule non-urgent work in spring or fall, when contractors are less busy and more willing to discount.
Frequently asked questions
Is a heat pump cheaper than a furnace?
A furnace is usually cheaper to install. A heat pump can be cheaper overall if it replaces both your furnace and air conditioner or if gas isn't available.
Can a heat pump replace a furnace completely?
In most climates, yes, especially with a cold-climate model. In very cold regions, many homes keep a furnace or electric strips as backup.
What is a dual-fuel system?
A heat pump paired with a gas furnace. The heat pump handles mild weather and the furnace takes over when it's very cold.
Sources
Prices are national averages and typical ranges from published cost data. Your price depends on your home, region, equipment and contractor, so get several written quotes. Heat & Air Costs is not an HVAC contractor; read our disclaimer.