Heat Pump Savings Calculator
Find out what a heat pump would cost to run compared with your current furnace, boiler or baseboard heat and air conditioner. Enter your fuel and electricity prices, home size and climate, and the heat pump's HSPF and SEER ratings to see the yearly savings and how many years it takes to pay back.
Last updated:
Older furnaces 60–80%, standard 80%, high-efficiency 90–98%.
Divide your bill by the therms used. 1 therm = 100,000 BTU.
Total bill ÷ kWh used, including delivery charges.
Heat loss in BTU per hour per °F per sq ft.
Holds its efficiency better below freezing.
Federal minimum is 7.5 HSPF2; ENERGY STAR cold-climate models are 8.1+.
Units from about 2006–2014 are often 13 SEER; older ones 8–10.
Utility or state rebates you will receive.
Optional: if your furnace/AC needs replacing anyway, only the difference counts.
How to use the Heat Pump Savings Calculator
- Pick your current heating fuel and enter its price and your electricity rate from a recent bill.
- Describe your home: floor area, insulation level and climate zone, or switch to your actual yearly fuel use for a more accurate result.
- Enter the heat pump ratings (HSPF2 and SEER2 from the quote or spec sheet). Tick the cold-climate box for a cold-climate model.
- Add the installed price and rebates, plus the cost of replacing your old system if it needs replacing anyway.
- Read the yearly savings and payback, then check the fuel comparison and 20-year table below the results.
How the savings are calculated
Every heating system has to deliver the same amount of heat to your home. The calculator first works out that heat, then what each system needs to produce it.
- Heat needed (BTU per year) = floor area × heat-loss rate × 24 hours × heating degree days. The heat-loss rate is 0.09 to 0.35 BTU per hour per °F per square foot, from a high-performance house to an old, drafty one. If you know your fuel use, heat = fuel used × BTU per unit × AFUE instead.
- Current fuel cost = heat ÷ (BTU per unit × AFUE) × price. Natural gas has 100,000 BTU per therm, propane about 91,500 BTU per gallon, heating oil about 138,500 BTU per gallon and electricity 3,412 BTU per kWh.
- Heat pump cost = heat ÷ (HSPF × 1,000) × electricity rate. The effective HSPF is adjusted for your climate, because HSPF is measured for a moderate climate (DOE Region IV).
- Cooling (optional) = floor area × heat-loss rate × 24 × cooling degree days ÷ (SEER × 1,000) kWh, for the old AC and for the heat pump.
- Payback = (installed cost − rebates − cost of replacing the old system anyway) ÷ yearly savings.
Example: a 2,000 sq ft average house in Chicago (about 6,200 heating degree days) needs about 2,000 × 0.22 × 24 × 6,200 ≈ 65.5 million BTU a year. With an 85% gas furnace that is about 770 therms, or about $1,230 at $1.60 per therm. An HSPF2 8.1 heat pump (HSPF ≈ 9.5, about 8.4 after the cold-climate adjustment) would use about 7,800 kWh, or about $1,400 at $0.18 per kWh. That is why heat pumps save most against propane, oil and baseboard heat, and why your electricity rate matters so much against gas.
Break-even electricity rates
The electricity price below which a heat pump heats for less than the fuel it replaces, for a heat pump with a seasonal COP of 2.5 (HSPF about 8.5) and 3.0 (HSPF about 10.2).
| Current heat (efficiency, price) | Cost per million BTU | Break-even at COP 2.5 | Break-even at COP 3.0 |
|---|---|---|---|
| Natural gas (95%, $1.50 / therm) | $15.79 | $0.135 / kWh | $0.162 / kWh |
| Natural gas (80%, $1.50 / therm) | $18.75 | $0.160 / kWh | $0.192 / kWh |
| Propane (90%, $2.90 / gallon) | $35.21 | $0.300 / kWh | $0.360 / kWh |
| Heating oil (85%, $3.90 / gallon) | $33.13 | $0.283 / kWh | $0.339 / kWh |
| Electric resistance (100%, $0.18 / kWh) | $52.75 | $0.450 / kWh | $0.540 / kWh |
Electric baseboard heat has a COP of 1, so a heat pump always uses less electricity than resistance heat for the same warmth: roughly 60% to 70% less at a COP of 2.5 to 3.
Tips for a better result
- Use your real bills. Switch to "I know my yearly fuel use" and enter the therms, gallons or kWh used for heating (subtract summer use for gas water heaters and stoves).
- Use the full electricity rate, including delivery charges. Some utilities offer a cheaper heat pump or winter rate that can change the answer.
- Seal and insulate first. A lower heat-loss rate shrinks both the heat pump size you need and the running cost.
- Time it with a replacement. If your furnace or AC is near the end of its life, enter its replacement cost so payback reflects only the extra cost of the heat pump.
- Compare all fuels at once with the heating cost calculator, or check a single appliance with the electricity cost calculator.
Frequently asked questions
How is heat pump operating cost calculated?
The calculator finds the heat your home needs per year, then divides it by the heat pump's seasonal efficiency. HSPF is BTU of heat per watt-hour of electricity, so kWh = heat in BTU ÷ (HSPF × 1,000). Multiply the kWh by your electricity rate to get the yearly cost. Your current cost is the fuel needed (heat ÷ fuel BTU content ÷ AFUE) times the fuel price.
What is the difference between HSPF and HSPF2?
HSPF2 and SEER2 are the ratings used in the US since January 1, 2023. The newer test uses higher duct static pressure, so the numbers come out lower for the same unit: roughly HSPF2 ≈ 0.85 × HSPF and SEER2 ≈ 0.95 × SEER. The calculator converts HSPF2 and SEER2 back to the older scale internally.
Will a heat pump save money compared with natural gas?
It depends mostly on the ratio of electricity to gas prices. A heat pump with a seasonal COP of 2.5 uses about 11.7 kWh to deliver the same heat as one therm of gas in a 100% efficient furnace. At $1.50 per therm and a 95% furnace, gas heat costs about $15.80 per million BTU, so the break-even electricity rate is about $0.135 per kWh at a COP of 2.5, or $0.16 at a COP of 3. Savings are usually large against propane, heating oil and electric baseboard heat, and smaller or negative against cheap gas.
Do heat pumps work in cold climates?
Yes, but efficiency falls as the outdoor temperature drops, so the calculator lowers the effective HSPF in colder climate zones. Cold-climate heat pumps keep much more of their capacity and efficiency below 5°F, which is why ticking that box raises the result. In very cold areas many homes keep a backup heat source for the coldest days.
What does the payback period include?
Simple payback is the installed cost minus rebates and minus what you would spend replacing your old system anyway, divided by the first-year savings. The table also shows the year when cumulative savings pass the net cost if energy prices change by the percentage you enter.
Is there still a federal tax credit for heat pumps?
The federal Energy Efficient Home Improvement Credit (25C), which covered 30% of a qualifying heat pump up to $2,000, ended for equipment placed in service after December 31, 2025. Many utilities and states still offer rebates, so enter whatever incentives you will actually receive.
How accurate is the estimate?
It is a planning estimate. The home-size method uses typical heat-loss rates and average degree days for each climate zone, so real use can differ by 20% or more. For the best result choose the fuel-use method and enter the therms, gallons or kWh you used for heating last year from your bills.
Are all the tools on FreeToolCabin tested for quality and accuracy?
Yes! Every tool on our site undergoes automated Q/A testing in real browser environments to ensure high precision, correct output, and zero errors. If you happen to spot a bug or have a suggestion, please contact us at [email protected] and our team will review it right away.