Short answer: a ducted heat pump costs about $12,000 to $18,000 installed, versus roughly $9,000 to $17,000 for a gas furnace plus central air conditioning. A heat pump replaces both, so the real gap is often $2,000 to $5,000 before rebates, and running costs depend mostly on your gas and electricity prices.
Cost to install
| System | Typical installed cost |
|---|---|
| Ducted cold-climate heat pump (3-ton, about 2,000 sq ft) | $12,000 to $18,000 |
| 96% efficient gas furnace | $5,000 to $9,000 |
| Central air conditioner | $4,000 to $8,000 |
| Furnace plus AC together | $9,000 to $17,000 |
| Dual-fuel system (heat pump with furnace backup) | $10,000 to $14,000 |
Ranges from a 2026 cost guide; your quotes will differ by home, ductwork and region.
Incentives after 2025
The federal Section 25C credit (up to about $2,000 for a heat pump) does not apply to equipment placed in service after December 31, 2025. State and utility rebates still exist and can be large; the same guide cites totals of $2,000 to well over $10,000 in some areas, so check your state energy office and utility before you buy. Confirm federal rules at irs.gov.
Cost to run
At 16 cents per kWh and an efficiency (COP) of 3.0, a heat pump delivers heat for about $1.56 per therm, versus about $1.15 for a 96% furnace with gas at $1.10 per therm. Heating alone, gas can win at those prices. The heat pump comes out ahead when:
- electricity is below about 12 cents per kWh, or gas is expensive;
- it replaces an air conditioner too, since it also cools more efficiently;
- you heat with oil, propane or resistance electric, which are costlier than gas.
For a whole house with cooling included, the guide estimates about $900 to $1,300 per year for a heat pump in a cold climate versus $1,200 to $1,800 for gas heat plus AC, a typical saving of $200 to $600 a year.
Comfort and cold weather
Modern cold-climate heat pumps keep heating down to roughly -15 to -20 degrees Fahrenheit, though efficiency drops as it gets colder. In very cold regions, a dual-fuel setup with a furnace backup is a common compromise. Proper sizing and good insulation matter more than the brand: the most common complaint is an oversized unit in a leaky house.
Which should you choose?
- Replacing both furnace and AC soon: get heat pump quotes; they are often competitive once rebates apply.
- Heating with oil, propane or electric resistance: a heat pump will almost certainly save money.
- Cheap gas, expensive electricity, working AC: keeping the furnace may be cheaper.
- Very cold climate: ask for a dual-fuel quote.
FAQ
How long does a heat pump last? Typically 12 to 15 years, similar to an AC unit.
Do I need new ducts? Not always, but leaky or undersized ducts hurt performance. Ask for a duct inspection.
Are heat pumps noisy? Modern units are about as quiet as a central AC.
Costs are estimates; get at least three local quotes. This is general information, not financial advice.