Heat Pump vs Gas Furnace ROI Calculator
Quick answer: Enter both system costs, your rebate, annual heating need, and energy prices. Get annual savings and payback year.
Compare a heat pump vs gas furnace over their lifetime. Includes the federal IRA rebate (up to $8,000 for cold-climate heat pumps), state rebates, annual heating cost based on your climate, and the payback period in years.
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Last reviewed: April 2026Report an error
Federal IRA up to $2k + state up to $8k.
Typical home: 600-1000.
Typical 2.5-4.0. Cold climate: 2.5-3.0.
Payback in 36.1 years
$83/yr
Gas: $1,333/yr. Heat pump: $1,250/yr. Annual savings: $83. Total 15-year savings (after upfront cost): $-1,752.
Cumulative Cost Over Time
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How to Use This Heat Pump ROI Calculator
- 1Enter the installed cost of each system.
- 2Enter your federal + state rebate stack (often $2k-$8k for heat pumps).
- 3Enter annual heating need in therms (typical home: 600-1000).
- 4Enter local gas and electricity prices.
- 5Set heat pump COP (typical 2.5-4.0) and gas furnace efficiency (80-95%).
- 6Read annual savings and payback year.
Frequently Asked Questions
- Coefficient of Performance — how many units of heat the heat pump produces per unit of electricity used. COP 3.0 means 1 kWh of electricity produces 3 kWh of heat. Modern heat pumps achieve 3.0-4.5 in mild climates, 2.0-3.0 in cold ones.
- Yes — modern cold-climate heat pumps (CCHP) maintain effective heating down to −13°F (−25°C). Brands like Mitsubishi, Daikin, and Fujitsu have proven track records in Maine, Minnesota, and even Alaska.
- The Inflation Reduction Act offers up to $2,000 federal tax credit (25C) plus up to $8,000 in HEEHRA point-of-sale rebates (income-dependent) for cold-climate heat pumps. Rebates vary by state.
- Typically 15-20 years, similar to gas furnaces. Heat pumps that also handle cooling replace BOTH your AC and furnace, so the comparison should account for that.
- Heat pumps shine when (a) you have moderately-priced electricity, (b) you live somewhere with both heating AND cooling needs (replacing both systems), and (c) you take full rebate stacks. In cold areas with very cheap natural gas, payback can be 8-15 years.
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