Is A Heat Pump More Expensive Than A Furnace?

You have heard about heat pumps and you are wondering if they are more expensive than an average furnace. Figuring out which works best for you can feel confusing.

Heat pumps are more expensive than a furnace. Heat pumps replace two climate control appliances for the home, the furnace and the whole house air conditioning unit. A furnace only provides one function, to heat the home.

Let’s further examine the differences between these appliances. While we investigate how much they cost and  each works, we will discuss critical issues found with each system. Let’s help you make an informed decision.

National Average Costs of Climate Control Appliances with Installation 

The chart shows us that a gas furnace is less expensive than a heat pump. However, because the heat pump replaces the home’s furnace and cooling unit, it is the less expensive choice.

Heat pumps are upto 300% more efficient than a furnace in most instances.

National Average Cost with Installation
Type of Climate Appliance
Heat Pump$5,600
Gas Furnace$3,010
Electric Furnace$3,750
Air Conditioning System$3,000
Combined Cost of Gas Furnace and Air Conditioner$6,010
Combined Cost of Electric Furnace and Air Conditioner$6,750

How Each Climate Control Appliance Works

To make an informed choice, understanding how these appliances work is important. We also need to consider their limitations. If you want or need heat in the winter and coolness in the summer you will install a furnace and an air conditioner; or a heat pump. 

The Heat Pump: How Much it Costs and What it Does

Heat pumps range in price from $1,500 to $10,000. Home Advisor has a calculator to help with estimating how much a heat pump will cost in your area. 

It prompts you to add your zip code. For example, if you add the zip code 92363, the calculator tells approximately where you are at. 

  • Riverside CA 92363
  • Average cost of $5,200 
  • Typical Range: $4,766 – $5,633
  • Low to High Range: $4,500 to $6,100

Heat pumps are popular in the southern states where the temperate climate makes them extremely efficient. They are used all over the united states.  But in cooler climates a secondary furnace might also be used. 

These popular appliances work like an air conditioning system. There is only one difference.  A heat pump has a built-in switch to reverse the air flow and its function. This allows the appliance to heat the air in winter or blow cool air in summer. 

The video How Does a Heat Pump Work explains that a heat pump takes outside air in during the winter. This air passes through a compressor that heats it up. Because the air is cold the coils will freeze. 

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When the coils freeze, the system reverts to summer use and brings warm air from inside the home to defrost the coils. As the coils defrost a heating element warms the cold air blowing back inside the home. Once the coils are defrosted it switches back to winter mode. 

In some places it is too cold for this HVAC unit to keep up with this demand. A secondary heat source, usually a furnace, is needed.

During the summer months the heat pump sucks the warm air from the interior passing it to the compressor which is now cooling the coils. 

Heat Pumps Need Back Up in Cold Temperatures

Heat pumps perform best in temperatures above 25 degrees fahrenheit . Anything below this and your hvac system will  need a  Supplemental Electric Strip Heat. This will help your heat pump work in cooler climates. 

If the temperature is too cold it may be difficult for the heat pump to warm the home effectively.

In cold climates a separate source of heat may be required. In some areas it is recommended to have a furnace as back up

Buying a furnace and a heat pump will cost more. Any savings suggested by utilizing the heat pump to warm your home no longer applies. You would be ahead to just buy a furnace.

The Size of the HVAC Matters

A larger system does not mean it will perform better. If you obtain an HVAC system that is too large or small for your house it will not work properly or efficiently. 

To work properly the system, you choose needs to be matched with your home. A reputable HVAC dealer can help you find the correct size system for your home and climate.

   When purchasing a system for the home, write down your home’s information.

  • Square footage of the home
  • How many doors and windows 
  • Where the home is located
  • Age of the home
  • How well insulated the home is
  • Energy sources available to the home
  • Cost of Appliance(s) and installation

Price of the Home’s Cooling Unit and How it Works 

On average an air conditioning system costs $3,000 with a range as low as $400 to as high as $6,000.

Since the heat pump also replaces the home’s central air, we need an understanding of how it works. The cost to install or replace is crucial if you are considering buying a heat pump. 

There is not a difference in how an air conditioning unit works and how a heat pump works. The reason a heat pump can both cool and heat a home is the reverse valve.  Because the air conditioning unit does not have this reverse valve, it is unable to produce heat for the home.

According to Carrier, a central air conditioning unit works ”Similar to how a refrigerator works, air conditioners transfer heat from the home’s interior to the warm outside environment.” This air transfer cools the home’s interior making it comfortable when the temperature outside soars.

In colder climates a cooling unit may not be needed during the warmest months. If this is the case then buying a central air conditioner, or a heat pump, does not make sense.

Gas Furnace: Average Price and How it Works 

A gas furnace is $3,800 on average. According to Home Guide the national average is between $2,150 and $5,900 for a new gas furnace and installation. 

Gas furnaces work with combustion. When you adjust your thermostat to a warmer temperature the liquid gas or propane is ignited via an electrical charge. The flame produced heats the air-filled coils. 

The heated air is pushed by the blower into the rooms through the duct work. As the room air temperature cools the thermostat is triggered and the process begins again.

A gas or propane furnace must be well ventilated. The fumes are directed outside through a flue.

Because gas is combustible there is a risk of fire.

The Electric Furnace: The Cost and How they Work 

On average these units cost $3,867, with a low of $1,047 and a high of $6,535. 

An electric furnace works similar to a space heater with a fan. The air is heated by passing over heated coils. The hot air is then forced through the ducts and into the rooms of the home.

Cost Efficiency of Home Heating Appliances

In comparing heat pumps and furnaces we see that heat pumps are much more cost efficient.

Even though it is more expensive to buy and install a heat pump, you would save money in energy consumption.

Average Monthly Cost to Use
Gas Furnace$500
Electric Furnace$675
*Heat Pump$75

Energy Calculators Are Useful Tools

You may wonder if this average estimate is true for you. Online energy calculators will help you determine a closer estimate. These calculators will prompt you to add criteria.

  • How Many Hours a Day in Use
  • Power Use in Watts
  • Price per kWh

After filling in the blanks, press calculate, and it will tell you how much you are spending on energy for that appliance. This energy usage calculator is useful if you are buying an electric furnace. Just fill in the prompts to discover a personalized estimate. New Hampshire Electric Co-Op shares this calculator, allowing us to compare different power sources.

Buying the Right HVAC Unit Will Save Money

We know that heat pumps are more expensive than buying a furnace. We’ve learned It is less expensive to buy a heat pump than it is to install a furnace and air conditioning unit. 

If you live in a temperate climate a heat pump is extremely efficient. But, in cold climates a furnace is needed. Now you have some basic tools and information to help make the best choice for your needs.

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