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Would a heat pump save you money?

Compare a heat pump’s heating cost with what you use now, on your state’s electricity and fuel prices.

3.28 seasonal COP needed to beat a gas furnace, US average HyreHVAC calculation on EIA 2024 prices (16.48¢/kWh, $14.50/Mcf) against a 95% AFUE furnace. From 1.61 in Florida to 6.11 in Alaska.

The short answer

If you heat with electric resistance, yes, by about two thirds, anywhere. If you heat with gas, it depends on your state.

On EIA 2024 prices a heat pump must reach a seasonal COP of 3.28 to beat a 95% gas furnace on average, from 1.61 in Florida to 6.11 in Alaska. There is no federal tax credit to add in 2026.

Would a heat pump save you money?

Defaults come from your state. Replace any of them with a figure from your own bill. Nothing is emailed.

Sets default prices (EIA 2024) and regional heating use (RECS 2020). “I don’t know” uses the US average.

The biggest factor in the answer.

AFUE from the nameplate. 80 is mid-efficiency; 95+ is condensing. Ignored for electric resistance.

Oil and propane only, from your delivery invoice. At 0, those options stay unanswered.

Leave at 0 to assume 3.0 and see a range. From a proposal: HSPF2 ÷ 3.412.

Leave at 0 for your region’s RECS 2020 average. 1 therm = 0.1 million Btu; 1 Mcf ≈ 1.037.

Leave at 0 for the EIA state average. Better: total bill ÷ kWh.

Leave at 0 for the EIA state average. Better: total gas bill ÷ therms.

— The answer, on these figures
— Heat pump, annual heating cost
— What you pay to heat now
— Difference
— Breakeven seasonal COP at your prices

What this assumed

—

An estimate of yearly heating cost, not a quote or bill forecast. Cooling is unchanged and left out. No federal tax credit is applied: §25C and §25D ended for property placed in service after December 31, 2025. It does not size equipment; that needs an ACCA Manual J.

Why does heat pump savings depend on your state?

Because the answer depends on the ratio between two local prices, electricity and gas, and that ratio varies a lot.

The seasonal COP a heat pump has to reach before it beats a gas furnace, 20240Florida1.61Louisiana2.07Arizona2.10Arkansas2.21United States average3.28Wisconsin4.89Connecticut4.93Michigan5.18Alaska6.11COP points from the US average of 3.28. Four lowest states, the national average, four highest.
The breakeven threshold varies more than threefold between states. A seasonal COP of 3 clears it easily in Florida and falls well short in Alaska.HyreHVAC calculation on EIA 2024 residential electricity (Form EIA-861) and natural gas (Natural Gas Navigator) prices, at 95% AFUE. The math is ours; both prices are EIA’s.

On EIA 2024 residential prices, the US average is 16.48 cents per kWh of electricity and $14.50 per thousand cubic feet of gas: $48.30 and $13.98 per million Btu.

HyreHVAC calculation: a 95% AFUE gas furnace turns 1 million Btu of gas into 0.95 million Btu of heat. A heat pump at seasonal COP 3 draws a third of that heat as electricity. Set the two costs equal and the heat pump needs a seasonal COP of 3.28 nationally to break even.

HyreHVAC analysis: that threshold is 1.61 in Florida and 6.11 in Alaska, more than threefold apart. A COP-3 heat pump saves money at the low end and costs money at the high end. Same box, same install.

What to do: use the rates from your own bills, since state averages hide differences between utilities. The calculator defaults to EIA state figures and lets you change both. A national savings figure from a salesperson is not about your house.

Breakeven COP compares running cost only. It ignores installed price, whether your electrical panel can take the load, and how the unit copes on the coldest morning.

Does it matter what heating you replace?

Yes. Four starting points give four different answers. Most heat pump advice quietly assumes the first row.

You heat with nowWhat the swap changesHow likely you save on running cost
Natural gas furnaceSwaps a cheap fuel for a pricier one, offset by getting 3+ units of heat per unit of energy. It all turns on your local price ratio.Uncertain. The state threshold runs from COP 1.61 to 6.11.
Electric resistance (baseboard or furnace)Same meter, same rate, and three or more units of heat where there was one.Very likely, by a wide margin. The strongest case there is.
Heating oilSwaps a delivered fuel with a volatile price for a metered one. The tool asks for your own price per gallon.Usually favorable, depending on what you paid per gallon this year.
PropaneThe same trade as oil, usually at a higher cost per Btu. Your price per gallon decides it.Usually favorable, with the same caveat.

Heat delivered is held equal; only the cost of making it changes. EIA’s standard conversions: 138,500 Btu per gallon of No.2 heating oil and 91,452 Btu per gallon of propane.

None of these rows covers comfort, cold-morning capacity or installed price. A heat pump that is cheaper to run can still be the wrong buy if the house needs electrical work first.

Is there a federal tax credit for heat pumps in 2026?

No. A federal credit line is the figure most likely to be wrong on a 2026 heat pump proposal, and it makes the purchase look better than it is.

26 U.S.C. § 25C, the Energy Efficient Home Improvement Credit, carried the $2,000 heat pump credit.

It ended for property placed in service after December 31, 2025, under Public Law 119-21 § 70505(a), enacted July 4, 2025.

Subsection (i) now reads: “This section shall not apply with respect to any property placed in service after December 31, 2025.”

26 U.S.C. § 25D, the Residential Clean Energy Credit, covered ground-source heat pumps at 30% of cost with no cap. It ended the same way: “The credit allowed under this section shall not apply with respect to any expenditures made after December 31, 2025.” We read both September 5, 2026.

The bottom line: For a residential HVAC installation completed in 2026, the federal tax credit is $0. There is no section of the Internal Revenue Code that provides one.

What survives: the DOE Home Energy Rebates, Home Efficiency Rebates (HOMES) (IRA § 50121) and Home Electrification and Appliance Rebates (HEAR) (IRA § 50122). They are appropriations, not tax law, and Public Law 119-21 did not touch them. Utility rebates survive too.

DOE publishes no national list of which state programs are open today. Both energy.gov program pages route the reader to their State or Territory Energy Office instead. So we publish no amount. DOE directs residents to their State or Territory Energy Office for program status and eligibility.

What to do: if a proposal shows a federal credit for a 2026 install, remove it and compare again. On geothermal, that line was 30% of the project, so it can move five figures. Then ask your utility and State Energy Office what is open. The HVAC rebate finder helps.

Not tax advice: HyreHVAC is not a tax adviser and takes no fee from any incentive program. This is the statute text with the date we read it. Confirm at irs.gov before acting.

What won’t this heat pump calculator do?

  • It will not size your equipment

    Running cost and capacity are different questions. Equipment is chosen from an ACCA Manual J load calculation.

  • It will not quote an installed price

    We hold no installed-price data and sell nothing. The HVAC cost calculator uses the price from your own proposal.

  • It will not apply a federal tax credit

    §25C and §25D both ended for property placed in service after December 31, 2025. A calculator still subtracting one is quoting repealed law.

  • It will not treat a rating as a field result

    Seasonal COP comes from a test stand. Duct leaks, charge and airflow decide how much you get, which is why a blank COP shows a range.

  • It will tell you not to bother

    In 30 of the 51 jurisdictions, the breakeven against gas is above a seasonal COP of 3, so a mainstream unit loses on running cost. The tool says so.

Questions this calculator answers

Will a heat pump save me money?
It depends on what you heat with and your local prices. Replacing electric resistance heat, almost certainly: a heat pump gives about three times the heat per unit of electricity. Replacing gas, it varies: the breakeven seasonal COP is 3.28 on average, from 1.61 to 6.11 by state.
Is there still a federal tax credit for a heat pump in 2026?
No. 26 U.S.C. § 25C, the Energy Efficient Home Improvement Credit, ended for property placed in service after December 31, 2025, under Public Law 119-21. For a system installed in 2026 the federal credit is $0. We read the statute September 5, 2026; confirm at irs.gov.
Is the geothermal tax credit still available?
No. 26 U.S.C. § 25D, which covered geothermal at 30% of cost with no cap, ended the same way under Public Law 119-21. On a geothermal proposal, removing that line can change the total by five figures.
Is there any heat pump money left?
Yes, but not federal tax credits. The DOE Home Energy Rebates (Home Efficiency Rebates (HOMES) and Home Electrification and Appliance Rebates (HEAR)) are appropriations, not tax code, and the 2025 act did not touch them.
Utility rebates survive too. They are run locally, so ask your utility and State Energy Office, or see heat pump rebates.
What is COP, and what number should I use?
Coefficient of performance: units of heat delivered per unit of electricity. Seasonal COP averages a whole heating season, cold hours included. Leave the field blank and the tool assumes 3.0 and shows a range. From a proposal, HSPF2 ÷ 3.412 gives the COP.
Why does this ask for my state instead of my ZIP code?
Because the data is state-level. EIA publishes electricity and gas prices by state, and household use by census region. A ZIP code would look more precise without being more accurate.
Is the heating use figure for my house?
No. It is the EIA RECS 2020 average for households in your census region: 34.4 million Btu of heating nationally. Your house may be older, leakier or bigger. If you know your own annual heating use, enter it.
Does this include the cost of installing a heat pump?
No, running cost only. We hold no installed-price data. The HVAC cost calculator takes the price from your written proposal and shows the cost over the system’s life.
Will a heat pump work in a cold climate?
That is a capacity question this tool does not answer. Cold-climate heat pumps are tested at 5°F. Whether a unit holds enough capacity at your design temperature comes from a load calculation and the maker’s performance data.
Is this a quote?
No. It estimates yearly running cost from public data and your inputs. It cannot see your ducts, electrical panel, insulation or rate plan. HyreHVAC does not install, service or sell HVAC equipment.

Sources and methodology

Figures dated EIA 2024 state fuel prices; EIA RECS 2020 consumption. Last reviewed .

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