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Heat Pump vs. Furnace: Cost, Comfort and Which Is Right for You

A gas furnace costs about $5,000 to $7,500 installed; a ducted heat pump averages around $14,500 but also cools. How to choose for your climate.

Published Oct 27, 2026. 3 min read.

Before and after: rusty old furnace replaced with a clean modern heating system

A gas furnace typically costs about $5,000 to $7,500 to replace in a 2,000 sq ft home. A ducted air-source heat pump averages around $14,500 before incentives — but it replaces both your furnace and your air conditioner, because it heats and cools. The better choice depends on your climate, your fuel prices and whether your AC also needs replacing.

How they work

A furnace burns gas (or uses electric resistance) to make heat and blows it through your ducts. A heat pump doesn't make heat; it moves it. In winter it pulls heat from outdoor air into the house, and in summer it runs in reverse like an air conditioner. Because it moves heat instead of creating it, a heat pump can deliver two to three times more heat than the electricity it uses.

Cost comparison

SystemTypical installed costHeatsCoolsLifespan
Gas furnace$5,000 – $7,500YesNo (needs AC)15 – 25 years
Ducted heat pump~$14,500 averageYesYes12 – 15 years
Hybrid (heat pump + gas furnace)~$14,400 averageYesYes12 – 20 years

Heat pump prices vary a lot by region — from roughly $8,000 to over $30,000 for a whole home. If your AC is old too, compare a heat pump against the cost of a furnace plus a new AC, which together often run $10,000 or more.

Climate matters most

  • Mild and warm climates (South, West Coast): heat pumps are usually the clear winner — efficient all year and one system to maintain.
  • Cold climates (Upper Midwest, Northeast): modern cold-climate heat pumps work well below freezing, but cost more. A hybrid system, using the heat pump most of the year and the furnace on the coldest days, is a popular middle path.
  • Very cheap natural gas: a high-efficiency furnace can still be cheaper to run in some areas.

Incentives in 2026

The 30% federal tax credit for heat pumps ended after 2025. Many states and utilities still offer rebates, and some income-qualified households can get up to $8,000 through state-run HEAR programs where funds remain. Check your state energy office and your utility before you sign.

What to ask in every quote

  • Was a load calculation (Manual J) done to size the system?
  • Model numbers, size in tons or BTUs, SEER2 and HSPF2 (heat pump) or AFUE (furnace) ratings
  • Will existing ducts and electrical service work, or need upgrades?
  • Backup heat: electric strips, or a furnace?
  • Removal of the old equipment, permit and labor warranty

Use our HVAC quote request template so each contractor prices the same system, see typical prices in our cost estimator, then compare the quotes.

Frequently asked questions

Is a heat pump cheaper to run than a gas furnace?

It depends on local electricity and gas prices and your climate. In mild climates a heat pump is usually cheaper to run. With very cheap gas and very cold winters, a high-efficiency furnace can cost less to operate.

Do heat pumps work in cold weather?

Yes. Cold-climate heat pumps are designed to keep heating well below freezing. Many homes in cold regions pair one with a furnace or electric backup for the coldest days.

Can I add a heat pump to my existing furnace?

Often yes. A "hybrid" or dual-fuel setup replaces the AC with a heat pump and keeps the furnace as backup, usually reusing the existing ducts.

Sources

Prices are national ranges for planning only. Your price depends on your home, your region and the contractor. This guide is general information, not professional, legal or insurance advice.

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