Independent guide. Comparison uses 2026 EIA state-average residential rates and EIA state-average natural gas prices.Verified May 2026

Electric vs gas heating cost 2026: heat pump beats gas furnace in most US states

At 2026 prices, a modern heat pump (HSPF2 9.5+) delivers heat at lower per-BTU cost than a 95 percent AFUE gas furnace in about two-thirds of US states, with the margin widening as electricity grids decarbonise and gas prices rise. The exceptions cluster in cold Northeast and upper Midwest states with cheap gas. Resistance electric (baseboard, electric furnace) loses to gas in every state.

Per million BTU cost by state

State	Elec rate	Gas $/therm	HP $/MMBtu	Furnace $/MMBtu	Winner
California	27.3c	$2.10	$26	$23	Gas (slim)
New York	23.2c	$1.60	$22	$17	Gas
Massachusetts	28.6c	$1.90	$27	$21	Gas
Texas	14.2c	$1.05	$14	$12	Gas (slim)
Illinois	17.1c	$1.15	$16	$13	Gas
Ohio	14.8c	$1.05	$14	$12	Gas (slim)
Washington	11.2c	$1.30	$11	$15	Heat pump
Idaho	10.7c	$1.10	$10	$13	Heat pump
Florida	15.5c	$1.95	$15	$22	Heat pump
Georgia	13.2c	$1.65	$13	$19	Heat pump
North Carolina	12.9c	$1.45	$13	$17	Heat pump
Tennessee	12.2c	$1.40	$12	$16	Heat pump
Arizona	14.4c	$1.85	$14	$21	Heat pump
Nevada	14.2c	$1.30	$14	$15	Heat pump (slim)
Oregon	12.9c	$1.40	$13	$16	Heat pump

Heat pump assumes HSPF2 9.5 (typical seasonal average COP about 2.8). Gas furnace assumes 95 percent AFUE. Gas prices are EIA residential averages with regional adjustment. "Slim" winner means under 15 percent difference; either system is reasonable.

The BTU equivalence math

Heating fuels are not directly comparable because they are sold in different units. Natural gas is sold by the therm (100,000 BTU of fuel content). Electricity is sold by the kWh (3,412 BTU). Propane is sold by the gallon (91,500 BTU). Oil is sold by the gallon (138,500 BTU). To compare apples to apples, you need to know two things: the fuel cost per unit (per therm, per kWh, per gallon) and the efficiency at which the equipment converts the fuel to delivered heat.

A 95 percent AFUE gas furnace converts 95 percent of the fuel's BTU into heat in your home. So 1 therm of gas at $1.50 delivers 95,000 BTU and costs $15.79 per million BTU delivered. A heat pump at COP 3 (HSPF2 about 9.5) converts 1 kWh of electricity into 10,236 BTU of heat. At 18 cents per kWh, 1 million BTU costs $17.59 per million BTU delivered. The gas furnace is slightly cheaper at these specific numbers, but at the US average gas price of $1.45 per therm, the per-BTU cost is $15.26 for gas and $17.59 for the heat pump; gas wins by about $2.30 per MMBtu. At a state-specific gas price of $1.65 per therm and electricity at 14 cents per kWh, the heat pump wins by $3.50 per MMBtu. The variance across states is large; the table above runs the math for 15 representative states.

Why the heat pump wins in the South and West

Southern states (Florida, Georgia, Texas, North Carolina) have electricity rates that are slightly below the US average and a moderate cooling season that the same heat pump unit serves. The capital cost of the heat pump is essentially the capital cost of the AC plus a small premium for the heating function, so the heat pump is the lower-cost equipment choice as well as the lower-cost operating choice. Gas prices in these states are not particularly cheap (often above $1.50 per therm), and the cooling-season utility of a separate gas furnace is zero.

Western states with hydro-heavy electricity (Washington, Oregon, Idaho) have electricity rates 30 to 40 percent below the US average. The heat pump cost per BTU is dramatically lower than gas in those states. Pacific Northwest gas prices are mid-range ($1.30 to $1.50 per therm), but the heat pump's electricity cost is so low that gas cannot compete even on cold winter days. The state-specific math is overwhelming and the regional energy efficiency programs (Northwest Energy Efficiency Alliance, Energy Trust of Oregon, BPA) heavily subsidise the heat pump conversion accordingly.

Why gas still wins in parts of the Northeast and Upper Midwest

New York, Massachusetts, Connecticut and other Northeast states have high electricity rates (23 to 30 cents per kWh) and moderate gas prices ($1.40 to $1.90 per therm). The heat pump's per-BTU cost ends up similar to or slightly higher than gas. The Northeast also has long, cold heating seasons where heat pump efficiency drops below the rated value for hundreds of hours per year, eroding the heat pump's per-BTU advantage further.

Several state programs (Mass Save, NYSERDA Clean Heat, Maine Efficiency Maine) are explicitly trying to flip this math through aggressive rebates that reduce the heat pump's effective cost or that target the cold-climate variants which maintain efficiency at low temperatures. Combined with the federal 25C credit and the IRA HEEHRP rebate, the install economics often favor the heat pump even when the per-BTU operating cost is roughly even with gas. The Northeast transition is happening but more slowly than in the South and West because the operating-cost case is closer to neutral.

Cold-climate heat pumps change the math in 2026

Cold-climate heat pumps (Mitsubishi Hyper-Heat, Bosch IDS Premium, LG Therma-V, Daikin VRV LIFE) maintain useful COP at outdoor temperatures where standard heat pumps would default to expensive resistance backup. In 2026 the cold-climate options are mature and the price premium versus standard heat pumps has narrowed to about 15 to 25 percent of equipment cost. For Northeast and upper Midwest homes that have been on the fence about heat pump conversion, the cold-climate options often tip the math: the running cost is similar to or slightly cheaper than gas across the whole heating season, with no resistance-backup penalty during cold snaps.

Northeast Energy Efficiency Partnerships (NEEP) maintains a public Cold Climate ASHP product list at ashp.neep.org with performance data at standard test conditions (47F, 17F, 5F outdoor). Choose a product from that list if you live north of about latitude 40 (north of Philadelphia, Indianapolis, Denver, San Francisco) or in any climate zone 5 or colder. Below that latitude, any modern HSPF2 9.5+ unit is fine.

Dual-fuel as the bridge strategy

For households with an existing gas furnace that is not yet at end of life, a dual-fuel hybrid system (heat pump for shoulder seasons and mild winter days, gas furnace for the coldest 200 to 400 hours of the year) often produces the lowest total operating cost. The system uses the heat pump down to about 25 to 35F outdoor (where the per-BTU cost is lowest); below that the thermostat switches to gas. The capital cost is the heat pump (new equipment) plus retention of the existing gas furnace.

Dual-fuel is especially attractive in Mid-Atlantic and Midwest states where the cold-climate heat pump still has 100 to 200 hours of poor efficiency per year. The system gets 70 to 80 percent of the heat pump's operating-cost benefit without the equipment cost of upgrading to a true cold-climate unit, and it provides redundancy for outages. Several utilities (Dominion Energy, Consumers Energy, Eversource) offer dual-fuel rebates that subsidise this configuration specifically.

Sources and further reading

FAQ

Is electric or gas cheaper to heat my home in 2026?

In most US states with a modern heat pump (HSPF2 9.5+) and at current gas and electricity prices, the heat pump wins by 20 to 50 percent on running cost. The exceptions are extreme cold states (Alaska, North Dakota, Minnesota north of Minneapolis) where heat pump efficiency drops and gas may remain cheaper for the coldest 200 to 400 hours of the year. Resistance electric heat (baseboard, electric furnace) loses badly to gas in every state; only the heat pump comparison is interesting.

What is BTU equivalence?

Heating fuels are compared per million BTU delivered to the home. Natural gas is sold by the therm (1 therm = 100,000 BTU input). At 95 percent AFUE, 1 therm delivers 95,000 BTU to the home. Electricity is sold by the kWh; 1 kWh = 3,412 BTU. A heat pump at COP 3 delivers 3 times 3,412 = 10,236 BTU per kWh consumed. Resistance electric delivers 3,412 BTU per kWh consumed.

What gas price should I assume?

The US average residential natural gas price in 2026 is about $1.40 to $1.60 per therm depending on region. Northeast and California: $1.70 to $2.20 per therm. Upper Midwest and Texas: $0.90 to $1.20 per therm. Always check your latest utility bill for the rate that applies to your service address; the BTU-equivalence math is very sensitive to gas price.

How much does duct loss affect the gas furnace comparison?

Substantially. A 95 percent AFUE gas furnace delivering 95,000 BTU to the supply plenum loses 20 to 35 percent through duct leakage in a typical home, so only 60,000 to 75,000 BTU reaches the registers. Heat pumps suffer the same duct loss but their per-BTU cost is much lower, so the dollar impact of the loss is smaller. Duct sealing benefits both system types but disproportionately benefits gas furnace owners; an additional argument for the duct-sealing investment if you stay on gas.

Does the 25C tax credit change the comparison?

It changes the install economics, not the running cost. The 25C credit reduces the upfront cost of switching to a heat pump by up to $2,000 (30 percent of equipment + install up to $2,000 cap). State and utility rebates can add another $2,000 to $10,000 depending on state. The combined credit + rebate stack often makes the heat pump install net less expensive than a like-for-like gas furnace replacement, on top of being cheaper to run.

What about lifecycle emissions?

Heat pumps powered by the US average grid emit about 0.40 lb CO2 per kWh delivered. A 95 percent AFUE gas furnace emits about 5.5 lb CO2 per therm or about 0.058 lb per 1,000 BTU. Comparing on equivalent BTU output: the heat pump emits roughly half the CO2 of the gas furnace per BTU on the US average grid; in low-emission grids (Washington, Idaho, Vermont, much of CA outside peak hours) the heat pump emits about one-tenth. As the grid decarbonises further this gap widens.

Does propane change the math?

Propane is generally more expensive per BTU than natural gas in most of the US. At $3.00 per gallon propane (US 2026 average) and 90 percent AFUE furnace, propane heating costs about $36 per million BTU delivered. Heat pump at COP 3 and 18 cents per kWh: about $17 per million BTU. Propane is meaningfully more expensive than electric heat pump in essentially every US state in 2026. Households on propane should evaluate heat pump conversion as a priority.

Disclaimer. Per-state cost comparison uses 2026 EIA residential electricity and natural gas prices, assumes HSPF2 9.5 heat pump and 95 percent AFUE gas furnace, both with identical duct loss assumptions. Real-world cost depends on home insulation, climate, equipment quality and installation. Independent resource.