The heat pump versus gas furnace debate has intensified as heat pump technology advances and energy costs fluctuate. But the right answer depends heavily on where you live. We analyzed operating costs and efficiency data across five distinct climate zones to give you the real numbers.
Understanding Heat Pump Efficiency: The HSPF Rating
Before diving into regional comparisons, you need to understand how heat pump efficiency is measured. The Heating Seasonal Performance Factor (HSPF) indicates how efficiently a heat pump converts electricity into heat over an entire heating season.
An HSPF of 10 means the heat pump produces 10 BTUs of heat for every watt-hour of electricity consumed. For context:
- HSPF 8.0-8.5: Minimum federal standard (basic efficiency)
- HSPF 9.0-10.0: Mid-range efficiency
- HSPF 10.0+: High efficiency, ENERGY STAR qualified
- HSPF 12.0+: Premium cold-climate models
Here is the critical point: HSPF ratings drop as temperatures fall. A heat pump rated at HSPF 10 in moderate climates might effectively operate at HSPF 6-7 in extreme cold. This is why climate zone matters so much.
The 5 Climate Zones Compared
We calculated annual heating costs using average local electricity and natural gas rates, typical home heating loads, and real-world efficiency data. Here is what we found.
1. Hot/Humid Climate: Miami, FL
Heating degree days: ~200/year
Average electricity rate: $0.13/kWh | Natural gas: $1.45/therm
Miami barely needs heating, making this comparison almost irrelevant. However, heat pumps win decisively here because they also provide highly efficient cooling. A heat pump system eliminates the need for a separate air conditioner and furnace.
Annual heating costs:
- Heat pump (HSPF 10): ~$85
- Gas furnace (95% AFUE): ~$130
Winner: Heat pump (and it handles your substantial cooling needs too)
2. Mixed/Moderate Climate: Charlotte, NC
Heating degree days: ~3,200/year
Average electricity rate: $0.11/kWh | Natural gas: $1.20/therm
Charlotte represents the sweet spot for heat pumps. Winters are cold enough to require real heating but mild enough that heat pumps maintain strong efficiency throughout the season.
Annual heating costs:
- Heat pump (HSPF 10): ~$680
- Gas furnace (95% AFUE): ~$820
Winner: Heat pump by approximately 17%
3. Cold Climate: Chicago, IL
Heating degree days: ~6,500/year
Average electricity rate: $0.14/kWh | Natural gas: $0.95/therm
Chicago tests heat pump limits. Temperatures regularly drop below 20 degrees F, where standard heat pumps lose significant efficiency. However, cold-climate heat pumps rated for -15 degrees F operation change the equation.
Annual heating costs:
- Cold-climate heat pump (HSPF 10, derated to ~7.5): ~$1,680
- Gas furnace (95% AFUE): ~$1,320
Winner: Gas furnace by approximately 21% on operating costs
However, if electricity rates drop below $0.10/kWh (possible with time-of-use rates or solar), the heat pump becomes competitive.
Compare Costs for Your Home
Enter your heating usage and local rates to see actual savings.
Calculate Heat Pump Savings4. Very Cold Climate: Minneapolis, MN
Heating degree days: ~8,000/year
Average electricity rate: $0.13/kWh | Natural gas: $0.85/therm
Minneapolis presents the toughest challenge for heat pumps. Extended periods below zero degrees F push even cold-climate models into backup heat mode, dramatically reducing efficiency.
Annual heating costs:
- Cold-climate heat pump (HSPF 12, derated to ~6.5): ~$2,450
- Gas furnace (95% AFUE): ~$1,620
Winner: Gas furnace by approximately 34%
The honest assessment: traditional heat pumps struggle in very cold climates. However, dual-fuel systems that pair a heat pump with a gas furnace backup can optimize costs by using the heat pump above 25-30 degrees F and switching to gas during extreme cold.
5. Mild Climate: San Francisco, CA
Heating degree days: ~2,800/year
Average electricity rate: $0.25/kWh | Natural gas: $1.80/therm
San Francisco’s mild temperatures favor heat pumps, but California’s high electricity rates complicate the picture.
Annual heating costs:
- Heat pump (HSPF 10): ~$1,080
- Gas furnace (95% AFUE): ~$1,070
Winner: Essentially tied
California’s aggressive decarbonization incentives and time-of-use electricity rates can tip the balance. Homeowners with solar panels or who can shift usage to off-peak hours see heat pumps pull ahead significantly.
The 15-Year Cost Analysis
Operating costs tell only part of the story. Here is how total costs compare over 15 years, including equipment and installation:
| Location | Heat Pump Total | Gas Furnace + AC Total | Difference |
|---|---|---|---|
| Miami | $14,275 | $17,950 | HP saves $3,675 |
| Charlotte | $20,200 | $22,300 | HP saves $2,100 |
| Chicago | $37,200 | $31,800 | Gas saves $5,400 |
| Minneapolis | $48,750 | $36,300 | Gas saves $12,450 |
| San Francisco | $26,200 | $26,050 | Essentially equal |
Assumes: Heat pump $8,000 installed, Gas furnace + AC $10,000 installed, 2% annual energy price increase, no incentives applied.
Factors That Can Change the Equation
Several factors can shift these calculations in either direction:
In favor of heat pumps:
- Federal tax credits (currently 30% up to $2,000)
- State and utility rebates (often $500-$3,000+)
- Solar panel installation reducing electricity costs
- Time-of-use rates with off-peak heating
- Rising natural gas prices
In favor of gas furnaces:
- Low natural gas prices (under $0.80/therm)
- High electricity rates (over $0.20/kWh)
- Extended periods of extreme cold
- Existing gas infrastructure in the home
The Bottom Line
Our analysis reveals clear patterns:
Heat pumps win decisively in hot, mixed, and mild climates (Zones 1-3 and mild Zone 4). The efficiency advantage, combined with providing both heating and cooling, makes them the better long-term investment.
Gas furnaces remain competitive in cold and very cold climates (Zones 5-7), particularly where natural gas is cheap. However, cold-climate heat pump technology continues improving, and dual-fuel systems offer a compelling middle ground.
Your specific situation matters. Local utility rates, available incentives, your home’s insulation, and your existing infrastructure all influence the final calculation. The numbers above provide a starting framework, but your results will vary.
The heating industry is shifting toward electrification, with many jurisdictions phasing out natural gas in new construction. Even if gas is cheaper today, consider the trajectory of energy policy and technology when making a 15-20 year equipment decision.