The number that decides whether a heat pump saves money

How do you compare electricity and gas prices?

Put both on the same energy unit, then adjust for equipment efficiency. A price in cents per kilowatt-hour and a price in dollars per thousand cubic feet cannot be compared directly. Skipping either step is the most common error on this subject, and it usually flatters whichever technology the writer prefers.

One kilowatt-hour is 3,412 Btu. One thousand cubic feet of residential natural gas is 1.037 million Btu, which is EIA’s own heat content factor.

Applying both to the 2024 national averages: electricity delivered at 16.48 cents per kilowatt-hour costs $48.30 per million Btu, and gas delivered at $14.50 per thousand cubic feet costs $13.98 per million Btu.

Electricity is 3.45 times more expensive per unit of energy delivered to the building.

That is not yet the answer, because the two appliances do not use their fuel equally well. A condensing gas furnace turns about 95% of its fuel into heat in the house.

A heat pump does not convert energy; it moves heat, delivering several units of heat per unit of electricity. Its coefficient of performance (COP) is that multiple.

So the heat pump is cheaper to run when COP > AFUE × (price of electricity ÷ price of gas), all on the delivered-energy basis above. Nationally that is 0.95 × 3.45 = 3.28.

HyreHVAC analysis: this is the whole question, and it is a state-level question, because both prices are set state by state. Our heat pump vs furnace calculator runs the same formula on your own rates.

Which states set the highest bar for a heat pump?

The cold northern ones. Computed for every state, the threshold runs from 6.11 to 1.61, a factor of nearly four. That alone makes any national claim about heat pump running costs close to meaningless.

The direction is the finding. Every one of the 11 states where the bar sits at 2.5 or below is southern: AL, AR, AZ, FL, GA, LA, MO, NC, NV, SC, TX.

Every one of the 13 states where it sits at 4.0 or above is northern or on the west coast: AK, CA, CO, CT, IL, IN, MI, MN, MT, NJ, NM, NY, WI.

HyreHVAC analysis: this is a price effect, not a performance effect. It has nothing to do with how heat pumps behave in the cold (that is a separate question with its own data).

Cold states have cheap gas because they have the pipe networks and the volume, and costly electricity because of generation mix and transmission cost. So the places where electrification is pushed hardest are where a household’s own running-cost math argues against it most.

What does the breakeven mean in four large states?

MI: a breakeven COP of 5.18: Electricity at 19.30 cents and gas at $10.76 put electricity at $56.56 per million Btu against $10.38 for gas.

No ducted air-source heat pump on the market achieves a seasonal COP of 5.18; the best cold-climate models are rated in the region of 2.5 to 3.5 seasonally.

In Michigan, on 2024 average prices, a heat pump raises the heating bill.

FL: a breakeven COP of 1.61: The reverse case, for the reverse reason: gas is expensive in Florida at $25.37 per thousand cubic feet because few homes use it. Any heat pump clears 1.61 easily. Florida is also the state where the question matters least, because there is very little heating load to save on.

NY at 4.25 and TX at 2.40 bracket the argument. Two large states, opposite conclusions, same appliance.

The honest summary: in the South the heat pump wins on running cost, but there is little heating to win on. In the North there is a lot of heating, and the heat pump loses on running cost at average prices. That is an uncomfortable finding, and we will not round it off.

What it does not establish is covered in the limitations below. This is the average retail price, not the marginal rate a household actually pays, and most of the real-world answer lives in the gap between the two. The Heat Pump Readiness Index combines this price test with each state’s housing stock.