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Heat Pump vs Electric Furnace Cost Calculator — 2026 Break-Even

See how much cheaper a heat pump is to run than an electric resistance furnace — weigh the higher up-front install against years of lower electric bills and find your break-even year.

Heat Pump wins

$19,157 cheaper

Heat Pump

$20,271

Electric Furnace

$39,428

Break-even

Year 3

Heating Need

MMBTU
20 MMBTU120 MMBTU
yr
5 yr25 yr

Electricity Rate

$/kWh
0.05 $/kWh0.4 $/kWh

Heat Pump Efficiency

COP
1.8 COP4 COP

Up-front Cost (installed)

$
3000 $12000 $
$
1200 $5000 $

Heat Pump wins

Saves $19,157 over 15 years · breaks even in year 3

Best
Heat Pump

$20,271

Up-front$5,500
Per year$985
Electric Furnace

$39,428

Up-front$2,500
Per year$2,462

Total cost over 15 years

Heat Pump$20,271
Electric Furnace$39,428

Cumulative cost over time

Cumulative cost over time — crossover at year 3

What You'll Need

hOmeLabs 4,500 Sq Ft Energy Star Dehumidifier

$200-$2604.5
View on Amazon
Honeywell Home T9 Smart Thermostat with Sensor

Honeywell Home T9 Smart Thermostat with Sensor

$150-$2004.4
View on Amazon

Cooper & Hunter Mini Split AC 12000 BTU 22 SEER

$700-$9004.4
View on Amazon

hOmeLabs 4,500 Sq Ft Energy Star Dehumidifier

$200-$2604.5
View on Amazon
Honeywell Home T9 Smart Thermostat with Sensor

Honeywell Home T9 Smart Thermostat with Sensor

$150-$2004.4
View on Amazon

Cooper & Hunter Mini Split AC 12000 BTU 22 SEER

$700-$9004.4
View on Amazon

As an Amazon Associate, we earn from qualifying purchases.

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Example Calculations

1Average rate, moderate climate

Inputs

Annual heating need60 MMBTU
Time horizon15 years
Electricity rate$0.14/kWh
Heat pump COP2.5
Installed costHeat pump $5,500 / Electric furnace $2,500

Result

Cheaper optionHeat pump — saves $19,155 over 15 yrs
Heat pump 15-year total$20,275
Electric furnace 15-year total$39,430
Break-evenYear 2

Heat pump runs ~$985/year vs ~$2,462 for the electric furnace — about 2.5x cheaper because it moves heat instead of burning watts. The $3,000 higher install is repaid in ~2 years, then it saves ~$1,477/year.

2High electricity rate ($0.24/kWh)

Inputs

Annual heating need60 MMBTU
Time horizon15 years
Electricity rate$0.24/kWh
Heat pump COP2.5
Installed costHeat pump $5,500 / Electric furnace $2,500

Result

Cheaper optionHeat pump — saves $34,980 over 15 yrs
Heat pump 15-year total$30,820
Electric furnace 15-year total$65,800
Break-evenYear 1

Both systems use the same electricity, so a higher rate enlarges the dollar gap rather than flipping the winner. At $0.24/kWh the heat pump runs ~$1,688/year vs ~$4,220, saving ~$2,532/year and breaking even in about 1 year.

3Cold climate, degraded COP 1.8

Inputs

Annual heating need60 MMBTU
Time horizon15 years
Electricity rate$0.14/kWh
Heat pump COP1.8
Installed costHeat pump $5,500 / Electric furnace $2,500

Result

Cheaper optionHeat pump — saves $13,410 over 15 yrs
Heat pump 15-year total$26,020
Electric furnace 15-year total$39,430
Break-evenYear 3

Even when frigid weather drops the heat pump’s seasonal COP to 1.8, it still runs ~$1,368/year vs ~$2,462 for resistance heat — 1.8x cheaper. Resistance heat is locked at COP 1, so it can never catch up; break-even is about 3 years.

Did You Know?

For a typical 60-MMBTU/year home in 2026, a heat pump (seasonal COP 2.5 at $0.14/kWh) costs about $985/year to run, versus about $2,462/year for an electric resistance furnace on the same electricity — the heat pump is roughly 2.5x cheaper than resistance heat because it moves heat instead of burning watts. It costs about $3,000 more to install but saves ~$1,477/year, recovering that gap in about 2 years and saving ~$19,155 over 15 years. Because electric resistance is locked at COP 1, a heat pump wins at almost any electricity rate or climate — one of the clearest wins in home energy.

Frequently Asked Questions

Q

Is a heat pump cheaper than an electric furnace?

Almost always, and by a wide margin. Both run on the same electricity, but an electric resistance furnace is 100% efficient (COP 1) — one kWh in, one kWh of heat out — while a heat pump moves heat and delivers 2 to 4 kWh of heat per kWh drawn (COP 2-4). At a COP of 2.5 a heat pump runs about 2.5x cheaper. For a typical 60-MMBTU/year home at $0.14/kWh that is ~$985/year versus ~$2,462/year, a ~$1,477/year saving. The heat pump costs about $3,000 more to install but recovers that in roughly 2 years, then keeps saving for the rest of its 15-20 year life.

  • Heat pump running cost: ~$985/year (COP 2.5, $0.14/kWh)
  • Electric furnace running cost: ~$2,462/year (COP 1, same rate)
  • Heat pump is ~2.5x cheaper to run at COP 2.5
  • Extra ~$3,000 install recovered in about 2 years
  • Heat pump saves ~$19,155 over 15 years
SystemInstalledRunning / year15-Year Total
Heat pump (COP 2.5)$5,500~$985~$20,275
Electric furnace (COP 1)$2,500~$2,462~$39,430
Heat pump @ COP 3.5$5,500~$703~$16,045
Q

Why is electric resistance heat so expensive to run?

Electric resistance heat — electric furnaces, baseboards, space heaters — converts electricity to heat at 100% efficiency, which sounds ideal but is actually the floor, not the ceiling. Its COP is exactly 1: one unit of electricity in, one unit of heat out. A heat pump does not make heat, it moves existing heat from the outdoor air, so it delivers 2 to 4 units of heat per unit of electricity. That is why resistance heat is the most expensive common way to heat a home, while a heat pump on the very same meter costs a fraction as much. Resistance heat only makes sense as cheap backup for the coldest hours or in a tiny, rarely heated space.

  • Resistance heat is locked at COP 1 (100% = the floor)
  • Heat pump COP 2-4 means 2-4x more heat per kWh
  • Same electric meter, roughly 2-2.5x lower bills
  • Resistance is the most expensive common heating method
  • Only wins as cheap backup or in tiny spaces
Q

What is the break-even year versus an electric furnace?

Break-even is when the heat pump’s lower running cost has repaid its higher install price. Divide the install gap by the yearly saving: a ~$3,000 higher heat pump install over ~$1,477/year in savings is about 2 years. Because resistance heat is fixed at COP 1, the heat pump’s edge does not depend on the electricity price — both options use the same power, so raising the rate widens the dollar gap and shortens break-even. At $0.24/kWh the yearly saving jumps to ~$2,532 and break-even drops to about 1 year. Since heat pumps last 15-20 years, the payback is a small fraction of the system’s life.

  • Break-even = install gap / yearly running saving
  • Typical: ~$3,000 / ~$1,477 = about 2 years
  • Higher rates shorten break-even (both use power)
  • At $0.24/kWh: about a 1-year break-even
  • Payback is a fraction of a 15-20 year lifespan
Q

Does a cold climate ever make an electric furnace worth it?

Rarely. Cold weather lowers a heat pump’s seasonal COP, but even a degraded COP of 1.8 still beats resistance heat’s COP 1 by 80%. In a cold-climate scenario at COP 1.8 a heat pump runs ~$1,368/year versus ~$2,462 for the electric furnace — still ~$13,410 cheaper over 15 years. Because resistance heat can never exceed COP 1, there is essentially no electricity price or climate where an electric resistance furnace beats a working heat pump on running cost. Modern cold-climate (CCHP) units hold a COP above 2 down to single-digit temperatures, so the gap usually stays wide. Resistance heat earns its keep only as inexpensive emergency backup.

  • Cold weather lowers heat pump COP but rarely below ~1.8
  • COP 1.8 still beats resistance (COP 1) by ~80%
  • Cold-climate example: ~$1,368/yr vs ~$2,462/yr
  • Resistance can never exceed COP 1 — heat pump wins
  • CCHP units hold COP 2+ at single-digit temps

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Last Updated: Jun 16, 2026

This calculator is provided for informational and educational purposes only. Results are estimates and should not be considered professional financial, medical, legal, or other advice. Always consult a qualified professional before making important decisions. UseCalcPro is not responsible for any actions taken based on calculator results.

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