Are electric heat pumps cheaper than gas furnaces?

Heat pumps are increasingly cost-competitive with gas furnaces due to their superior efficiency, producing two to five times more heat than the electricity they consume. In the U.S., residential heat pumps have outsold gas furnaces for four years, and their adoption in industry could boost GDP by over $50 billion by 2050. Other alternatives like hydrogen are deemed less viable due to higher costs, safety risks, and lower efficiency.

• Heat pumps are significantly more energy-efficient than other heating sources because they transfer heat rather than producing it, allowing them to generate two to five times more heat energy than the electricity they consume.
• In the residential sector, heat pumps have outsold gas furnaces for four consecutive years, and as of September 2025, they have also outsold central air conditioning units.
• Transitioning eligible U.S. industrial processes to heat pumps could increase the national GDP by over $42 billion by 2030 and another $8 billion by 2050, while creating approximately 350,000 jobs across the manufacturing, finance, construction, and electricity sectors.
• Industrial heat pumps are most effective for light industries requiring low-temperature heat (under 200°C). Research indicates they can provide lower-cost heat than gas-fired boilers at 12 percent of industrial facilities, and they are currently cost-competitive enough to replace 22 trillion British thermal units of U.S. industrial gas demand.
• Hydrogen is an inefficient and costly heating alternative compared to heat pumps; a meta-review of 54 studies found no support for large-scale hydrogen heating, noting it would result in 86 percent higher consumer costs and reduce climate pollution by less than seven percent when blended into existing gas systems.

APA

Brown, L. (2026). Are electric heat pumps cheaper than gas furnaces? Energy Innovation. https://energyinnovation.org/expert-voice/are-electric-heat-pumps-cheaper-than-gas-furnaces/

Chicago

Brown, Lydia. Are electric heat pumps cheaper than gas furnaces? Energy Innovation, 2026. https://energyinnovation.org/expert-voice/are-electric-heat-pumps-cheaper-than-gas-furnaces/.

Wikipedia

{{cite report |last1=Brown |first1=Lydia |title=Are electric heat pumps cheaper than gas furnaces? |publisher=Energy Innovation |date=1 April 2026 |url=https://energyinnovation.org/expert-voice/are-electric-heat-pumps-cheaper-than-gas-furnaces/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{brown2026are, author = {Brown, Lydia}, title = {{Are electric heat pumps cheaper than gas furnaces?}}, institution = {Energy Innovation}, year = {2026}, month = apr, url = {https://energyinnovation.org/expert-voice/are-electric-heat-pumps-cheaper-than-gas-furnaces/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }