Heat Pump System GuideOperating cost is the question most heat pump shoppers actually care about, and it does not have one national answer. This guide separates the pieces that decide it: how efficiency is measured, what current fuel prices are, and why the break-even point moves by location. Every number below is tied to a source that was fetched on the verification date.
The Two Efficiency Ratings Are Not the Same Scale
A gas furnace is rated by AFUE, the annual fuel utilization efficiency. ENERGY STAR defines AFUE as the percentage of the heat in the incoming fuel that is converted to space heat instead of being lost, and it sets its qualifying furnace threshold at 97 percent AFUE or greater in the U.S. North and 95 percent or greater in the U.S. South.
A heat pump is rated differently, because it moves heat rather than burning fuel. ENERGY STAR describes air-source heat pumps as delivering up to three times more heat energy than the electrical energy they consume.
The reason a direct percentage comparison misleads is that AFUE tops out below 100 percent by definition, while a heat pump can exceed 100 percent on an energy basis because it is transferring heat, not generating it. The honest comparison is not efficiency alone, it is efficiency multiplied by fuel price.
Current Fuel Prices Set the Baseline
Operating cost math depends on what each fuel actually costs where you live. The U.S. Energy Information Administration reports a U.S. average residential electricity price of 18.44 cents per kilowatt-hour for May 2026.
On the gas side, EIA reports a U.S. average residential natural gas price of 19.83 dollars per thousand cubic feet for May 2026.
These are national averages and they move month to month and region to region. They are the right starting inputs for a comparison, but a local bill can sit well above or below them, so plug in your own utility rates before drawing a conclusion.
Where the Heat Pump Advantage Comes From
The Department of Energy frames the heat pump advantage in bill terms, stating that today's heat pump can reduce electricity use for heating by approximately 65 percent compared to electric resistance heating such as furnaces and baseboard heaters.
That 65 percent figure is specifically a comparison against electric resistance heating, not against natural gas. It is strong evidence for households currently heating with electric baseboard or electric furnaces, where the switch replaces expensive resistance heat with efficient heat transfer.
Against a high-efficiency gas furnace the comparison is closer and depends on the local electricity-to-gas price ratio, so this DOE figure should not be quoted as the gas-versus-heat-pump result. It answers a related but different question.
What Share of the Bill Heating Represents
Context helps size the stakes. ENERGY STAR states that a typical household's energy bill is around 1,900 dollars annually, and almost half of that goes to heating and cooling.
That means the heating and cooling portion is the part any efficiency decision actually moves. A change in heating source cannot affect the lighting or appliance share, so comparisons should focus on the heating and cooling slice rather than the whole utility bill.
Use this to keep expectations grounded. Even a large efficiency improvement acts on roughly half of the typical bill, not all of it.
How to Run Your Own Break-Even
A defensible comparison combines the pieces above rather than reaching for a single verdict. Take your local electricity rate and your local gas rate, apply the heat pump efficiency multiple and the furnace AFUE, and compare cost per unit of delivered heat. The national EIA prices are a starting point, but your own utility rates are what decide the answer.
The direction of the result is sensitive to the price ratio between the two fuels. When electricity is inexpensive relative to natural gas, the heat pump efficiency advantage tends to win. When electricity is expensive relative to gas, a high-efficiency furnace can be cheaper to run per unit of heat.
This guide does not publish a single break-even electricity price, because that number depends on the specific efficiency ratings and local gas price you use. The right output is a range built from your own inputs, not a universal figure.
Frequently asked questions
Is a heat pump always cheaper to run than gas?
No. The result depends on the local ratio between electricity and gas prices, plus the efficiency of each system. When electricity is cheap relative to gas, the heat pump usually wins; when it is expensive relative to gas, a high-efficiency furnace can be cheaper per unit of heat.
Why can a heat pump exceed 100 percent efficiency but a furnace cannot?
A furnace burns fuel, so its AFUE is capped below 100 percent by definition. A heat pump transfers heat rather than generating it, which is why ENERGY STAR describes air-source units delivering up to three times more heat than the electricity they use.
Does the DOE 65 percent figure apply to gas furnaces?
No. That figure compares a heat pump against electric resistance heating such as electric furnaces and baseboard heaters, not against natural gas. The gas comparison is closer and depends on local fuel prices.
What fuel prices should I use for my own comparison?
Start with the current EIA national averages, then substitute your actual utility rates. The May 2026 EIA averages are 18.44 cents per kWh for electricity and 19.83 dollars per thousand cubic feet for residential natural gas.