With heat pump purchases on the rise, many people are wondering how heat pumps compare to a furnace, and what the potential benefits are of switching to a heat pump.
The main difference is simple: a furnace generates heat, while a heat pump transfers heat. Because heat pumps transfer existing heat instead of creating it from scratch, they are much more energy efficient than furnaces. The efficiency benefits are even stronger if your household is using traditional electric heating systems. The U.S. Department of Energy says today’s heat pumps can reduce electricity use for heating by up to 75% compared with electric resistance heating, such as electric furnaces and baseboard heaters.
For many households, a heat pump can be the better long-term choice because it provides both heating and cooling in one system. However, the best option depends on your climate, current heating system, energy prices, level of home insulation and installation costs.
A heat pump is usually better if you want high efficiency, lower fossil fuel use and one system for both heating and cooling. A furnace may still make sense if upfront cost is your main concern. While the initial cost of a heat pump may be high, our Switch Together program offers a group discount which can significantly lower your costs. Also, there may be available heat pump incentives that can reduce your cost further.
The main difference between a heat pump and furnace is how they heat your home.
A furnace generates heat by burning fuels, such as gas or oil, or by using electricity.
A heat pump does not create heat in the same way, rather it moves heat from one place to another. During the winter, it pulls heat from the outdoor air and moves it inside. During the summer, the cycle works in reverse and moves heat out of your home, acting like an air conditioner. In simple terms:
|
System |
How it works |
|
Heat Pump |
Transfers / Moves heat |
|
Furnace |
Generates / Creates heat |
This is why heat pumps can be so efficient. They move existing heat instead of producing it directly.
|
Heat Pump |
Furnace |
|
|
Cooling included? |
Yes |
No |
|
Upfront Cost, incl. installation |
$6,300-$30,000 |
$3,800-$10,000 |
|
Operating Cost |
Often lower, depending on electricity rates |
Often higher, depending on fuel prices |
|
Efficiency |
Around 200-400% efficiency |
Around 80-95% efficiency |
|
Lifespan |
15 to 20 years |
15 to 20 years |
|
Cold climate suitability |
Yes |
Yes |
Note: Installation costs vary widely depending on home size, ductwork, system type, labor rates and local incentives.
Heat pumps are more efficient than gas furnaces.
A high-efficiency gas furnace may reach around 95% efficiency. That means most of the fuel it uses is converted into heat for the home. A heat pump, however, can reach 200% to 400% because it moves heat rather than generating it.
This does not mean a heat pump creates energy from nothing. It means that for every unit of electricity used, a heat pump can move two to four units of heat into the home.
Modern heat pumps are also much better in cold weather than older models. Some systems, in particular cold climate rated systems, are designed to operate in temperatures as low as -15°F. ENERGY STAR sets a specific product criteria for cold-climate heat pumps, including low-temperature performance requirements tested at 5°F, assuring consumers that these systems will perform on even the coldest day in the Midwest or Northeast.
When comparing a heat pump and furnace, look at two types of cost:
Heat pumps usually cost more than a new furnace, however, heat pumps should cost less to run over time because they use energy more efficiently.
Furnaces are often cheaper upfront, especially if your home already has gas heating and usable ductwork. But a furnace only provides heat. If you also need cooling, you may need a separate air conditioner, which increases the total system cost.
A heat pump is more efficient than traditional electric heating systems because it moves heat instead of creating it directly.
Electric resistance heating uses electricity to generate heat. Electric furnaces, baseboard heaters, and wall heaters all turn electricity directly into heat, which can make them expensive to run. A heat pump also uses electricity, but it delivers heat much more efficiently, helping reduce energy use and long-term heating costs.
Electric Furnaces
Electric furnaces use electricity to heat air, then blow that warm air through ducts around the home. They can be costly to run because some heat is lost in the ducts, especially in cold spaces.
Electric Baseboard Heaters
Electric baseboard heaters are controlled by thermostats located within each room. They are usually placed underneath windows to help balance the cold air coming from the class.
Electric Wall Heaters
Electric wall heaters use an electric heating element with a reflector behind it to reflect heat into the room and usually a fan to move air through the heater. They are typically installed on inside walls and are mainly used for heating individual rooms.
All of these systems are types of electric resistance heating that are controlled with a thermostat. Compared with these systems, a heat pump is usually the better choice for whole-home efficiency.
Heat pumps can work well in many climates, including cold regions. In freezing temperatures, homeowners may want to choose a cold-climate heat pump, which is designed to perform better in very low temperatures.
|
Climate or situation |
Best option |
|
All Climates |
Heat pump |
|
Very cheap gas and expensive electricity |
Furnace may compete on short term cost |
|
Home wanting heating + cooling |
Heat pump |
|
Home already has gas furnace and no cooling needed |
Compare both options |
Heat pumps usually have a lower environmental impact than furnaces because they do not burn fossil fuels inside the home. Gas, oil, and propane furnaces create emissions by burning fuel for heat, while heat pumps run on electricity and can become even cleaner as the power grid adds more renewable energy. According to Rewiring America, 98% of U.S. households would cut their carbon emissions by installing a heat pump today.
Heating and cooling are major sources of home energy use, so switching to a more efficient system can reduce household emissions. The impact is especially strong when a heat pump replaces oil, propane or an older gas furnace.
In simple terms: a heat pump can help warm your home while reducing direct fossil fuel use.
Heating and cooling in one system
A heat pump can heat your home in winter and cool it in summer, reducing the need for separate heating and air conditioning systems.
High energy efficiency
Heat pumps are highly efficient because they move heat instead of generating it.
Lower operating costs
Because heat pumps can be two to four times more efficient than traditional heating systems, they may reduce monthly energy costs.
Lower carbon emissions
A heat pump can reduce fossil fuel use, especially when replacing an oil, propane, or gas furnace.
Works in cold weather
Modern cold-climate heat pumps can perform well in freezing temperatures when properly sized and installed.
Higher upfront cost
Heat pumps often cost more to install than furnaces. Installation costs can also be high but with Switch Together, you could save thousands on a heat pump installation through the power of group buying. Explore the costs of heat pumps here.
Lower upfront cost
Furnaces are often cheaper to install than heat pumps, especially when replacing an existing gas furnace.
Fast heating
Furnaces, especially gas furnaces can heat up quickly and circulate warm air throughout the home rapidly.
Reliability in cold climates
Just like heat pumps, furnaces also work in cold climates.
No cooling
Furnaces only provide heating. Therefore, you would need to consider adding a separate AC system if you don’t already have air conditioning.
Uses fossil fuels
Gas, oil, and propane furnaces burn fuel inside the home.
Safety considerations
Potential for carbon monoxide leaks requiring regular maintenance and detectors
Potential air quality concerns
Research shows that indoor air quality can be impacted by furnaces.
|
Choose a heat pump if.. |
Why |
|
You want one heating and cooling system |
Heat pumps can replace both a furnace and air conditioner |
|
You want lower energy use |
Heat pumps are usually more efficient |
|
You want to lower your carbon footprint |
Heat pumps do not burn fossil fuels |
|
You qualify for rebates or tax credits |
You may be eligible for different heat pump incentives that can reduce the upfront cost |
|
You are replacing both heating and cooling systems |
A heat pump may be more cost-effective overall |
Consider a furnace only in limited cases
A furnace may still be suitable in some situations, but it is often not the most efficient or future-proof option. It can seem like the easier choice, especially if your home already has gas heating or if upfront cost is your main concern. However, a modern heat pump is worth considering first, as it is generally more energy-efficient, reduces reliance on fossil fuels, and provides both heating and cooling in one system.
|
You might consider a furnace if.. |
Why to still compare it with a heat pump |
|
Upfront cost is your main concern |
Rebates and long-term savings may offset heat pump costs |
|
You do not currently need cooling |
A heat pump can still be useful |
For many homeowners in 2026, a heat pump is the better long term option. Heat pumps are significantly more energy efficient than furnaces, can provide heating and cooling and can reduce direct fossil fuel use.
A furnace may seem like the better short-term option if installation cost is the main concern and natural gas is very cheap in your area. However, because heat pump technology has improved significantly, homeowners should compare both options before replacing their heating system.
Is a heat pump better than a furnace?
In many cases, yes. A heat pump is often considered better than a furnace for multiple reasons. The main appeal for homeowners is usually the increased energy efficiency and lower running costs.
Is a heat pump cheaper than a gas furnace?
A heat pump is usually more expensive to install than a furnace. However, it may be cheaper to run overtime because it is more efficient. The total cost depends on local electricity and gas prices, available incentives, and how much heating and cooling your home needs.
Do heat pumps work in cold climates?
Yes. Modern heat pumps, especially cold-climate heat pumps can work well in cold weather.
What is the downside of a heat pump?
The main downside is the higher upfront installation cost. At Switch Together though, we work hard to remove this barrier through our group discount that can save you thousands.
A heat pump can be worth it in 2026 if you want to reduce energy use, replace both heating and cooling equipment, or qualify for rebates and incentives. It is especially worth comparing if your current furnace or air conditioner is nearing the end of its life.