Heat pumps and gas furnaces are not competing products so much as competing answers to a question about your climate, your fuel prices and your existing ductwork. The honest version of this comparison changes address to address, which is why national verdicts on it are worth so little.
What travels is the framework. Below is the set of inputs that actually decides it, and where each one is verifiable rather than asserted.
The mechanical difference that drives everything else
A furnace makes heat by burning fuel. Its efficiency is measured by AFUE, the annual fuel utilisation efficiency, expressed as the percentage of fuel energy that becomes useful heat. Ninety-five percent AFUE means ninety-five cents of every fuel dollar reaches the house. It cannot exceed 100, because you cannot get more heat out than the fuel contained.
A heat pump does not make heat. It moves heat from outside air into the house, which is why its seasonal rating, HSPF2, describes output relative to electricity consumed and effectively exceeds one-to-one. That is also why the two ratings cannot be compared directly: AFUE is a percentage of fuel burned, HSPF2 is a ratio of heat moved to electricity used. Anybody putting them side by side as though 95 beats 8.8 is comparing different units.
Because a heat pump moves heat rather than creating it, its output falls as the outdoor temperature drops and there is less heat available to move. That single fact is the whole climate argument, and it is why design temperature matters more than any brochure number.
The three configurations
| Configuration | How it heats | Where it fits |
|---|---|---|
| Gas furnace with separate air conditioner | Combustion, rated by AFUE. Cooling handled by a separate condenser rated in SEER2. | Cold climates with cheap natural gas, and homes where a functional furnace has years left. |
| Heat pump, all electric | Moves heat, rated by HSPF2 for heating and SEER2 for cooling. Backup electric resistance heat for the coldest hours. | Milder winters, homes without a gas connection, and anywhere the electricity-to-gas price ratio favours it. |
| Dual fuel | Heat pump does the work above a set outdoor temperature; the gas furnace takes over below it. | Cold climates that also have long mild shoulder seasons, where each system runs where it is cheapest. |
Row three is the option most homeowners are never offered, and it is frequently the right one in a genuinely cold climate. The switchover temperature is set during commissioning based on the relative cost of gas and electricity where you live, which means it is a number you can ask about rather than accept as a default.
Design temperature, not the coldest day you remember
Heating equipment is sized against a design temperature, which is a statistical figure for how cold it gets in your location for all but a small fraction of hours in a year. It is not the record low, and sizing to the record low is how houses end up with equipment far larger than they need.
The relevant questions for a heat pump are what capacity it delivers at your design temperature, and what happens below it. Manufacturers publish extended capacity tables showing output at different outdoor temperatures, and that table is the document worth asking for. A rated capacity at 47 degrees tells you little about performance at 5.
Below the point where the heat pump cannot keep up, something else runs. In an all-electric system that is usually electric resistance heat, which is the expensive way to heat a house and the reason some heat pump owners get an alarming January bill. In a dual fuel system it is the furnace. Knowing which, and at what temperature it engages, is the difference between a system that performs as promised and one that surprises you.
The fuel price ratio does most of the work
Whether a heat pump costs less to run than a furnace is arithmetic on two local prices, and the answer genuinely differs by state and by year. We are not going to publish a national verdict on it, because there is not one.
What you can do is the comparison yourself. Take your electricity price per kilowatt hour and your gas price per therm from your own bills, not from an average. Convert both to a cost per unit of delivered heat, applying the furnace AFUE to the gas side and the heat pump’s seasonal performance to the electric side. The result is specific to your address and your rates, and it is the only version of this number worth acting on.
The ratio also moves. Electricity and gas prices do not track each other, so a comparison made three years ago may have inverted. Redo it at the point of purchase rather than relying on what was true when you last looked.
What is already in the house matters as much as the equipment
- Ductwork. Heat pumps deliver air at a lower temperature than a furnace does, so they move more of it. Ducts sized for furnace airflow can be undersized for a heat pump, producing rooms that never quite get comfortable. Get the duct system assessed before choosing, not after; our note on duct leakage and airflow covers what that involves.
- Electrical service. An all-electric conversion with resistance backup can require panel capacity a house does not have. That cost belongs in the comparison and is frequently omitted from it.
- The existing furnace. A furnace with a decade left is an asset. Dual fuel keeps it working rather than discarding it, which is often the cheapest path to lower running costs.
- Sizing. Neither system performs at its rating if it is the wrong size, and oversizing is the most common installation error in both directions. Our guide to sizing covers why.
No brands appear anywhere on this site and none will. The configuration decision above is made before brand is relevant, and a contractor who leads with a manufacturer rather than with a load calculation and a fuel-price comparison has skipped the part that determines whether you will be happy.
Questions readers actually ask
Do heat pumps work in cold weather?
They work, with declining output as it gets colder, because they move heat rather than making it and there is less available to move. The question is not whether they function but what capacity they deliver at your design temperature and what covers the shortfall below it. Ask for the manufacturer’s extended capacity table rather than accepting a general assurance.
Can I compare AFUE against HSPF2?
No, they are different units. AFUE is the percentage of fuel energy that becomes heat and cannot exceed 100. HSPF2 is a ratio of heat delivered to electricity consumed and routinely exceeds one-to-one because the heat is moved rather than created. Comparing running cost means converting both to a price per unit of delivered heat, using your own local fuel rates.
What is dual fuel and why was I not offered it?
A heat pump paired with a gas furnace, where the heat pump handles mild conditions and the furnace takes over below a set outdoor temperature. It suits cold climates with long shoulder seasons and keeps an existing serviceable furnace in use. It is offered less often than it should be, partly because it is a more involved conversation than replacing like with like.
Will switching to a heat pump lower my bills?
It depends entirely on the ratio between your electricity and gas prices, your climate, and how much backup heat runs. That is why no honest national answer exists. Run the conversion described above on your own bills, and treat any specific percentage saving offered without sight of those bills as a sales figure.
Sources
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Every figure in this article traces to a government record or to a named independent, non-commercial research body. We do not cite insurance marketplaces or affiliate comparison sites for data.
- U.S. Energy Information Administration New efficiency standards for residential air conditioners and heat pumps Published 2019-06-01Supports: Heating efficiency of air-source heat pumps is measured by the heating seasonal performance factor; the minimum moved to 8.8 HSPF from the 8.2 required under the standard effective in 2015; EIA Residential Energy Consumption Survey data on the share of US homes using central air conditioning and heat pumps.
- U.S. Department of Energy / Code of Federal Regulations Appendix M1 to Subpart B of Part 430; residential furnace and heat pump efficiency metrics Published 2023-01-01Supports: DOE efficiency metrics: AFUE expresses annual fuel utilisation efficiency as the share of fuel energy delivered as useful heat and cannot exceed 100 percent; HSPF2 and SEER2 are seasonal ratios measured under the M1 test procedure adopted from 1 January 2023.
Figures last verified August 30, 2026.