energy
Heat pump vs furnace: how to decide
When one outdoor box that heats and cools makes sense, when keeping the gas furnace is smarter, and what to check on the quote before you pick.
You’re usually here because something is dying: the air conditioner after a brutal summer, the furnace after a cold snap, or both. A heat pump is one outdoor machine that cools in summer and heats in winter by moving heat instead of burning gas. A furnace only makes heat, so if you keep it you still need a separate AC.
If the AC is shot and the furnace is old, you’re shopping for one replacement instead of two. If the furnace is only a few years old and only the AC failed, replacing just the AC is often cheaper, and you’re not obligated to throw away a working furnace because the person in the driveway sells heat pumps.
What does a heat pump cost to put in?
EnergySage’s 2026 buying guide puts average installation at $15,393, though brand averages on that marketplace wander a lot: Carrier around $12,500, Trane around $19,000, Daikin around $23,000, Mitsubishi around $31,000. Mini-splits (the indoor wall units) get priced per room, so a four-room house is a different job than swapping one outdoor unit onto existing ducts.
Those figures are other people’s quotes, mixed across climates and attics. A cold-climate unit, new ducts, a breaker-box upgrade, or a long copper run up the side of the house will move your number more than the logo on the box.
A plain AC replacement looks cheaper on day one because it doesn’t heat, so only use that comparison if you already have a furnace you plan to keep.
EnergySage’s cost pages split the $15,393 average another way: ducted systems about $14,529, hybrid (heat pump plus furnace) about $14,353, and whole-home mini-splits about $25,957 before incentives. After state and local incentives in their tables, hybrids drop more than ducted because programs still like dual fuel. The federal 25C credit is not in those 2026 “after incentives” columns for new installs.
Mini-splits look expensive until you remember you pay per indoor unit. EnergySage has described extra zones as adding up to around $8,000 depending on labor and line sets, and if you have no ducts, adding a full duct system ($2,000 to $10,000+ in their retrofit range) can wipe out the idea that ducted is automatically cheaper. Use brand averages to sanity-check a bid, not to pick a winner by logo.
EnergySage also quotes median bill savings of $300 to $650 a year when people switch from traditional heat. That’s a median over mixed fuels and mixed rates, so oil and propane houses save more, while cheap gas plus expensive electricity can save little or even raise the bill.
Can I still subtract the federal tax credit?
The IRS Energy Efficient Home Improvement Credit (that’s “25C” on tax forms) covered qualifying heat pumps placed in service from January 1, 2023 through December 31, 2025, with a cap of $2,000 a year.
IRS: Energy Efficient Home Improvement Credit
If the unit starts running in your house in 2026, don’t let someone knock $2,000 off because their brochure still has last year’s IRS language. State and utility rebates may still exist, but those are local, and you should ask whether they mean “we ordered it” or “it was running in your house.”
When is a heat pump the right call?
It fits when you need both heat and cooling in the next few years, and winters where you live are the kind modern units are built for. Ask what the machine still puts out on your coldest nights, not just the cooling number on the sticker (that’s SEER2). The heating sticker is HSPF2, and both are lab weather, so your January is the one that matters.
It also fits when your current heat is electric baseboard or an old electric furnace, because a heat pump uses less electricity to deliver the same warmth, and when the furnace is near the end so you’re not junking a healthy gas appliance.
When should I keep the furnace?
Keep it when winters are brutal, gas is cheap, electricity is expensive, and the furnace still has years left. The Washington Post modeled one house in 2025 and found a cheap heat pump with a long payback if you were replacing something that still worked. In a Chicago-rate scenario, a minimum-efficiency heat pump could raise the bill. Operating cost is outdoor temperature, times what you pay per therm and per kilowatt-hour, times what the unit can actually do at 10°F.
Washington Post (archived): home energy upgrade math
“Dual fuel” means the heat pump handles most of the year and the gas furnace kicks in below a set outdoor temperature. That’s extra hardware, and it fits when winters are nasty and your electric rate is high compared with gas, or when the furnace is fine and only the AC is dead. It needs a real outdoor cutoff written into the bid, and a control that actually switches. It goes wrong when “hybrid” means a cheap heat pump that can’t heat, plus a new furnace you didn’t need.
Should I insulate before I buy the machine?
A leaky attic makes every heating system look undersized. The cold bedroom over the garage is usually the attic hatch, the ducts in the unconditioned space, or insulation that got shoved aside, so if you buy a giant outdoor unit for a house that’s heating the sky, you paid for extra capacity you could have avoided.
If a quote has no written heating-and-cooling load (installers call that a Manual J, or they should name whatever they used instead) and no mention of ducts or the attic, you’re looking at a catalog page. The weatherization guide walks through that order of work.
Heat pumps are also large 240-volt loads, same family as a dryer or range. A 100-amp service that already feeds an electric range, dryer, and water heater may not take a heat pump without a load-sharing gadget or a service upgrade, so ask on the first call. The Level 2 charger article is the same electrical story with a different appliance.
What should be on the quote?
- A written heating and cooling load for this house, not “we always put in 3-ton for this square footage.”
- A look at the ducts (leaks, size, whether the cold rooms even have returns), or a mini-split plan with which rooms get a wall unit and where the lines run.
- Electrical: space in the breaker box, wire size, and whether a panel upgrade is in or out of the price.
- Heating capacity at your winter design temperature, not only the cooling sticker.
- Warranty in writing: parts, compressor, labor, and whether labor requires their factory-trained tech.
- What’s left out: permits, the concrete pad, hiding the lines, thermostat, hauling the old equipment.
- Who files the rebate paperwork.
Get two or three quotes. If one is 40% cheaper, find the missing line before you celebrate. The quote checklist is the printable version of this list.
How do I decide in one afternoon?
- Identify what is dying: AC only, furnace only, both, or nothing (you’re shopping on purpose).
- Write down what fuel you have, and what you paid per therm and per kWh last January.
- Check whether the attic is a disaster. If yes, read the weatherization guide before you sign.
- Get two bids that use the checklist: load, ducts, winter capacity, electrical, exclusions.
If both bids refuse to write a load, you have prices, not bids. House first, then the bid, then the machine.