AI Summary
Heat pumps make sense when electricity is affordable relative to gas, climate is moderate, environmental impact matters, or no gas service exists. AC plus gas furnace works well when natural gas is cheap, climate is very cold, existing gas infrastructure is in place, or upfront cost is primary concern. Both systems work—choice depends on fuel costs, climate, priorities, and existing infrastructure.
Do I Really Need a Heat Pump or Will AC + Furnace Work?
Both systems provide heating and cooling. This guide explains when each makes sense based on your situation.
How Each System Works
Heat Pump System
Single system provides both heating and cooling by moving heat rather than generating it. Uses electricity for all operations. More efficient in moderate temperatures, less efficient in extreme cold.
Components: Outdoor unit, indoor air handler, thermostat, refrigerant lines
AC + Furnace System
Separate systems for cooling (AC) and heating (furnace). AC uses electricity, furnace typically uses natural gas. Each system optimized for its specific function.
Components: Outdoor AC unit, indoor furnace, thermostat, refrigerant lines, gas line
When Heat Pumps Make Sense
No Natural Gas Service
Homes without gas service avoid expensive gas line installation ($2,000-5,000+). Heat pumps provide efficient heating using existing electrical service.
Alternative: Electric furnace costs less upfront but operates at 2-3x the cost of heat pumps.
Moderate Climates
Areas where winter temperatures rarely drop below 20°F allow heat pumps to operate efficiently most of the time. Less backup heat needed.
Examples: Pacific Northwest, mid-Atlantic, parts of Southeast
High Gas Prices
Regions where natural gas costs $1.50+ per therm see heat pumps competitive or cheaper to operate than gas furnaces.
Calculation: Compare local electricity and gas rates to determine operating cost differences.
Environmental Priorities
Heat pumps produce lower carbon emissions than gas furnaces in most regions, especially with renewable electricity sources.
Impact: 30-60% lower carbon footprint depending on electricity source.
Future-Proofing
Building codes increasingly favor or require electric heating. Heat pumps position homes for future regulations and grid improvements.
Heat Pump Operating Costs
For 1,500 sq ft home, moderate climate:
- Electricity at $0.12/kWh: $800-1,200/year heating
- Electricity at $0.15/kWh: $1,000-1,500/year heating
- Electricity at $0.20/kWh: $1,300-2,000/year heating
Actual costs vary by climate, home insulation, and usage.
When AC + Furnace Makes Sense
Cheap Natural Gas
Regions where natural gas costs under $1.00 per therm see gas furnaces cheaper to operate than heat pumps, especially in cold climates.
Calculation: Gas furnace operating costs typically 30-50% lower than heat pumps when gas is cheap.
Very Cold Climates
Areas with frequent temperatures below 10°F see heat pumps rely heavily on backup heat. Gas furnaces maintain efficiency regardless of outdoor temperature.
Examples: Northern plains, mountain states, northern New England
Existing Gas Infrastructure
Homes with existing gas service and functional gas furnaces avoid the cost of switching systems. Replacing gas furnace with another gas furnace is straightforward.
Cost advantage: Gas furnace replacement costs $3,000-6,000 vs $12,000-20,000 for heat pump system.
Lower Upfront Cost Priority
Gas furnaces cost $3,000-6,000 vs $12,000-20,000 for heat pump systems. Lower initial investment may be priority despite higher operating costs.
Proven Reliability
Gas furnaces have decades of proven performance in cold climates. Some homeowners prefer established technology over newer heat pump technology.
Gas Furnace Operating Costs
For 1,500 sq ft home, cold climate:
- Gas at $0.80/therm: $600-900/year heating
- Gas at $1.20/therm: $900-1,350/year heating
- Gas at $1.80/therm: $1,350-2,000/year heating
Actual costs vary by climate, furnace efficiency, and usage.
Cost Comparison
Upfront Costs
Heat pump system: $12,000-20,000 installed
AC + gas furnace: $8,000-15,000 installed
Difference: $2,000-5,000 premium for heat pump
Operating Costs (Annual)
Varies significantly by:
- Local electricity rates
- Local gas rates
- Climate and heating demand
- Home insulation quality
Heat pumps may cost less, same, or more to operate depending on these factors.
Payback Period
If heat pump saves $300/year in operating costs, $3,000 equipment premium pays back in 10 years. If heat pump costs $200/year more to operate, payback never occurs.
Dual-Fuel Systems
What They Are
Heat pump for moderate weather, gas furnace for extreme cold. System automatically switches based on outdoor temperature and efficiency.
When They Make Sense
- Cold climate with existing gas service
- Want heat pump efficiency in moderate weather
- Want gas furnace reliability in extreme cold
- Budget allows premium for both systems
Cost
Equipment: $15,000-25,000 installed (both systems)
Operating cost: Lowest of either system depending on conditions
Climate-Specific Guidance
Mild Climates (Rarely Below 30°F)
Best choice: Heat pump—operates efficiently year-round
Alternative: AC + gas furnace if gas is very cheap
Moderate Climates (Occasional Below 20°F)
Best choice: Depends on fuel costs—compare operating costs
Consider: Heat pump with backup heat or dual-fuel system
Cold Climates (Frequent Below 10°F)
Best choice: Depends on priorities—gas furnace for cost, cold-climate heat pump for efficiency
Consider: Dual-fuel system for best of both
Very Cold Climates (Extended Below 0°F)
Best choice: Gas furnace unless electricity is very cheap
Alternative: Cold-climate heat pump with significant backup heat
Questions to Determine Best Choice
- What are local electricity rates?
- What are local natural gas rates?
- How cold does it get in winter?
- Do I have existing gas service?
- What's my budget for upfront costs?
- How long do I plan to own this home?
- Do environmental impacts matter to me?
Common Misconceptions
"Heat Pumps Don't Work in Cold Climates"
Partially false. Modern cold-climate heat pumps work down to -15°F or lower. They're less efficient in extreme cold but still functional with backup heat.
"Gas Is Always Cheaper"
False. In regions with cheap electricity and expensive gas, heat pumps cost less to operate. Compare local fuel costs.
"I Need to Choose One or the Other"
False. Dual-fuel systems combine both, using whichever is most efficient at any given temperature.
"Heat Pumps Are New and Unproven"
False. Heat pumps have been used for decades. Recent improvements make them more effective in cold climates.
Making the Decision
Consider:
- Local fuel costs (electricity vs gas)
- Climate and heating demand
- Existing infrastructure (gas service or not)
- Upfront budget vs long-term operating costs
- Environmental priorities
- Planned ownership duration
Both systems work well. Choice depends on your specific situation and priorities.
Evaluate Your System Options
See what contractors propose and how systems compare for your situation.
Decode Your Quotes →Why This Matters
Understanding when heat pumps make sense versus AC plus furnace helps you evaluate whether contractors' recommendations align with your situation. Neither system is universally better—the right choice depends on fuel costs, climate, existing infrastructure, and priorities.
Ask contractors to explain their recommendation based on your specific situation rather than accepting generic advice about which system is "better."