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

Electric vs gas heating cost 2026: the local price ratio decides

At early-2026 EIA prices, a 95 percent AFUE gas furnace is cheaper to run than a standard heat pump (HSPF2 9.5, seasonal COP about 2.8) in most gas-served states, especially where gas is cheap (Illinois, Ohio, Idaho, Nevada). The heat pump wins where electricity is cheap relative to gas (Washington) and roughly ties in Texas, Georgia and Oregon. Against resistance electric, propane or oil heat, the heat pump wins everywhere by a wide margin, and top-tier HSPF2 12+ equipment shifts several more states its way.

Per million BTU cost by state

State	Elec rate	Gas $/therm	HP $/MMBtu	Furnace $/MMBtu	Winner
California	35.3c	$2.21	$37	$23	Gas
New York	29.4c	$1.54	$31	$16	Gas
Massachusetts	29.4c	$2.49	$31	$26	Gas
Texas	17.0c	$1.59	$18	$17	Even
Illinois	20.5c	$0.93	$21	$10	Gas
Ohio	19.5c	$1.06	$20	$11	Gas
Washington	14.4c	$1.68	$15	$18	Heat pump
Idaho	12.7c	$0.65	$13	$7	Gas
Georgia	15.4c	$1.51	$16	$16	Even
North Carolina	16.3c	$1.73	$17	$18	Heat pump (slim)
Tennessee	14.9c	$1.08	$16	$11	Gas
Arizona	15.5c	$1.66	$16	$17	Heat pump (slim)
Nevada	14.3c	$0.90	$15	$9	Gas
Oregon	15.8c	$1.48	$17	$16	Even

Heat pump assumes HSPF2 9.5 (typical seasonal average COP about 2.8). Gas furnace assumes 95 percent AFUE. Electricity rates are EIA April 2026 state residential averages; gas prices are EIA January 2026 state residential averages (peak heating month). "Slim" or "Even" means under 15 percent difference; either system is reasonable. Florida is omitted because EIA reports no January 2026 residential gas price for it.

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 the March 2026 US average of $1.57 delivers 95,000 BTU and costs $16.53 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 the April 2026 US average of 18.83 cents per kWh, 1 million BTU costs $18.40 per million BTU delivered; gas wins by about $1.90 per MMBtu at national averages. At a state-specific gas price of $1.65 per therm and electricity at 14 cents per kWh, the heat pump wins by about $3.70 per MMBtu. The variance across states is large; the table above runs the math for 14 representative states.

Where the heat pump is competitive: South and parts of the West

Southern states (Georgia, Texas, North Carolina) have electricity rates below the US average, gas prices that are not particularly cheap (often above $1.50 per therm), and short heating seasons, so the running-cost comparison lands roughly even. The decisive Southern argument is capital, not fuel: the same heat pump unit serves the long cooling season, so its cost is essentially the cost of the AC plus a small premium for the heating function, while the cooling-season utility of a separate gas furnace is zero.

In the Pacific Northwest the picture splits. Washington (14.4 cents per kWh against $1.68 per therm gas in January 2026) is one of the few states where the heat pump beats gas outright on running cost, and the regional efficiency programs (Northwest Energy Efficiency Alliance, Energy Trust of Oregon, BPA) heavily subsidise the conversion. Oregon lands roughly even. Idaho is the counterexample: its electricity is cheap, but its residential gas (about $0.65 per therm in January 2026, among the cheapest in the country) is far cheaper still, so gas wins decisively on running cost there.

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. With the federal 25C credit now expired (2026 installs no longer qualify), these state rebates plus the IRA-funded HEEHRP point-of-sale rebate for income-qualified households are what still tilt the install economics toward 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?

It depends on the local price ratio. At early-2026 EIA prices, a 95 percent AFUE gas furnace is cheaper to run than a standard heat pump (HSPF2 9.5, seasonal COP about 2.8) in most gas-served states; the heat pump wins where electricity is cheap relative to gas (Washington, parts of the Southeast) and roughly ties in Texas, Georgia and Oregon. Against resistance electric, propane or oil heat, the heat pump wins everywhere by 50 to 70 percent. Top-tier HSPF2 12+ mini-splits cut heat pump running cost by about 25 percent versus the standard unit, flipping several more states.

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 early 2026 is about $1.35 to $1.60 per therm in the peak heating months (EIA, January-March 2026). Northeast and California: $1.55 to $2.50 per therm. Upper Midwest: $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 changed the install economics, not the running cost, but the federal 25C credit expired for property placed in service after 31 December 2025 under the 2025 budget law, so it no longer applies to a 2026 install (it had reduced the upfront cost of switching to a heat pump by up to $2,000). State and utility rebates are separate and mostly continue, adding $2,000 to $10,000 depending on state, and can still make the heat pump install competitive with a like-for-like gas furnace replacement, on top of the heat pump 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 $2.67 per gallon propane (EIA US average, end of the 2025-26 heating season) and 90 percent AFUE furnace, propane heating costs about $32 per million BTU delivered. Heat pump at COP 3 and 18.83 cents per kWh: about $18 per million BTU. Propane is meaningfully more expensive than an 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.