Are electric heat pumps cheaper than gas furnaces?

The document argues that heat pumps are a cost-effective alternative to gas heating due to their superior energy efficiency, which allows them to overcome higher electricity costs. In the residential sector, heat pumps have outsold gas furnaces for four consecutive years. In the industrial sector, they are particularly viable for low-temperature processes (under 200°C), with the potential to increase U.S. GDP by over $42 billion by 2030. The briefing concludes that other alternatives, such as hydrogen and renewable natural gas, are less scalable and more expensive than heat pumps.

• Heat pumps are significantly more energy-efficient than other heating sources, capable of producing two to five times more heat energy than the electricity they consume.
• In the U.S. residential market, heat pumps have outsold gas furnaces for four years in a row, and as of September 2025, they surpassed central air conditioning units in sales.
• Transitioning eligible U.S. industrial processes to heat pumps could increase the national GDP by more than $42 billion by 2030 and an additional $8 billion by 2050, creating approximately 350,000 jobs.
• Industrial heat pumps are cost-competitive for low-temperature heat (under 200°C) at 12 percent of industrial facilities, despite electricity being roughly five times more expensive than gas on average.
• Hydrogen is deemed an impractical residential heating alternative due to high costs, safety risks, and inefficiency; a meta-review of 54 studies indicates hydrogen heating would result in 86 percent higher consumer costs.

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} }