Energy Costs
Gas vs Electric Heating: Cost per Delivered BTU and Heat Pump Break-Even
Electric resistance heat is almost always the most expensive way to heat a home, typically two to three times the cost of gas per delivered BTU. A heat pump changes that: with a seasonal COP around 3 it often matches or beats gas. The break-even electricity price equals your gas cost per million BTU × 0.003412 × the heat pump's COP; at $1.50 per therm and 95% AFUE, that is about $0.16 per kWh.
Comparing on delivered heat
A therm of gas and a kilowatt-hour of electricity are different amounts of energy, and they are turned into heat at very different efficiencies. The fair comparison is the price of one million BTU (MMBtu) delivered into the house.
Gas $/MMBtu = $ per therm ÷ (0.1 × AFUE)
Electric $/MMBtu = $ per kWh ÷ (0.003412 × COP)
A therm is 100,000 BTU (0.1 MMBtu) and a kWh is 3,412 BTU (0.003412 MMBtu). AFUE is the furnace's seasonal efficiency, from about 0.80 to 0.98. COP is 1.0 for any resistance heater and typically 2–4 for a heat pump, depending on outdoor temperature. Run your own prices through the heating cost calculator.
Side-by-side at example prices
Example rates: gas $1.50 per therm, electricity $0.16 per kWh. Swap in your own; both vary widely by state.
| System | Efficiency | $ per MMBtu delivered | Relative cost |
|---|---|---|---|
| Condensing gas furnace | 95% AFUE | $15.79 | 1.00 |
| Standard gas furnace | 80% AFUE | $18.75 | 1.19 |
| Electric resistance (baseboard, electric furnace, space heater) | COP 1.0 | $46.89 | 2.97 |
| Heat pump, cold region | Seasonal COP 2.2 | $21.32 | 1.35 |
| Heat pump, mixed climate | Seasonal COP 2.8 | $16.75 | 1.06 |
| Heat pump, mild climate or cold-climate model | Seasonal COP 3.3 | $14.21 | 0.90 |
| Ground-source heat pump | Seasonal COP 3.5–4.5 | $10.42–13.40 | 0.66–0.85 |
With the same rates, a house needing 50 MMBtu a season pays about $790 with condensing gas, about $840 with an air-source heat pump at COP 2.8, and about $2,345 with resistance heat.
The break-even electricity price
Setting the two formulas equal shows the electricity rate at which a heat pump costs the same to run as gas:
Break-even $/kWh = Gas $/MMBtu × 0.003412 × COP
Worked example: gas at $1.50 per therm in a 95% furnace is $15.79 per MMBtu. For a heat pump with a seasonal COP of 3.0, break-even = 15.79 × 0.003412 × 3.0 = $0.162 per kWh. If you pay less than that for electricity, the heat pump is cheaper to run; if you pay more, gas is. At COP 2.5 the break-even drops to $0.135.
| Gas price (95% AFUE) | Break-even at COP 2.5 | Break-even at COP 3.0 |
|---|---|---|
| $1.00/therm | $0.090/kWh | $0.108/kWh |
| $1.50/therm | $0.135/kWh | $0.162/kWh |
| $2.00/therm | $0.180/kWh | $0.216/kWh |
The same logic sets the switchover temperature on a dual-fuel system. As the outdoor temperature falls the heat pump's COP drops; when the COP falls below break-even for your rates, the furnace becomes cheaper. See heat pump efficiency vs temperature for typical COP curves.
Beyond fuel cost
- Equipment and installation: a heat pump replaces both the furnace and the air conditioner, so compare it against the combined cost of a new furnace and AC, not against a furnace alone.
- Fixed charges: dropping gas entirely removes the monthly connection fee, which can be $10–30 or more; keeping gas for a stove or water heater keeps the fee.
- Cold-climate performance: air-source heat pumps lose capacity as it gets colder. In very cold regions, size for it and plan backup heat; the heat pump sizing calculator finds the balance point.
- Comfort: gas furnaces deliver hotter supply air (often 120–140 °F) in short bursts; heat pumps deliver cooler air (about 90–105 °F) for longer. Variable-speed heat pumps feel steadier than single-stage ones.
- Safety: any combustion appliance can produce carbon monoxide if the heat exchanger cracks or the vent fails, so gas homes need working CO alarms and periodic inspection. See cracked heat exchanger warning signs.
Propane and oil homes
Where natural gas is not available, the comparison is usually propane or oil against electricity. At $2.50 per gallon in a 95% furnace, propane costs about $28.76 per MMBtu; oil at $3.75 per gallon and 85% efficiency is about $31.85. A heat pump with a seasonal COP of 2.5 at $0.16 per kWh is $18.76, so heat pumps frequently cut heating bills substantially for these homes, even with a fossil-fuel backup for the coldest days.
How to check your own numbers
- Find your gas price per therm from a winter bill: divide the total of the charges that scale with usage by the therms used. Leave fixed monthly fees out.
- Do the same for electricity in dollars per kWh. On time-of-use rates, use the rate that applies when heating runs most.
- Look up your furnace's AFUE and a heat pump's HSPF2. Seasonal COP is roughly HSPF2 ÷ 3.412; colder climates do worse than the rating assumes.
- Plug both into the break-even formula or the heating cost calculator.
Running the calculation at next year's likely prices as well as today's shows how sensitive the decision is. The HSPF2 guide explains the efficiency rating in more detail.
Where electric resistance still makes sense
Resistance heat has the lowest equipment cost and needs no venting or outdoor unit. It is reasonable for rarely used rooms, very small or very well-insulated spaces, and as backup strips in a heat pump air handler. For whole-house primary heat it is usually the most expensive choice to run. The cost to run an electric heater page and the heat pump running cost page show the monthly numbers.
Frequently asked questions
Is it cheaper to heat with gas or electric?
Gas is much cheaper than electric resistance heat almost everywhere in the US. Compared with a heat pump, the answer depends on your rates and climate; use the break-even formula on this page with your own gas price, electricity price and the heat pump's seasonal COP.
What COP does a heat pump need to beat gas?
Divide your electricity price by (gas $/MMBtu × 0.003412). With gas at $15.79 per MMBtu delivered and electricity at $0.16 per kWh, the heat pump needs a seasonal COP above about 3.0.
Is a heat pump cheaper than a propane furnace?
Usually yes. Propane typically costs well over $25 per million BTU delivered, while a modern heat pump at common electricity rates is usually under $20.
Last reviewed 2026-10-28