Heat Pump Savings & Payback Calculator
Would a heat pump cut your heating bill? Compare it to gas, oil, propane, or electric heat.
Switching from oil heat to a cold-climate heat pump saves a typical home about $1,000 a year at 2026 example prices, roughly a 12-year payback on a $13,000 install before rebates. Versus cheap natural gas it is usually a closer call; versus propane or electric resistance heat, the heat pump normally wins clearly.
A heat pump moves heat instead of burning fuel, so it can deliver the same warmth for a fraction of the energy. Whether it saves you money depends on what you heat with today and the gap between your fuel price and your electricity rate.
This calculator works backward from what you spend now to figure out how much heat your home actually uses, then prices that same heat delivered by a heat pump at your electricity rate, and shows the payback on the install.
How we calculate this
We estimate the heat your home uses from your current bill and fuel efficiency, then price the same heat at your electricity rate through a heat pump’s HSPF2 rating. Yearly savings drive the payback period.
What affects your cost
Your climate
Heat pumps lose efficiency in deep cold. In the upper Midwest and New England, price a cold-climate model, the HSPF2 ~10 preset, for a fair estimate.
The gas-vs-electric gap
Where gas is cheap and power is pricey, a heat pump can cost more to run. Where you heat with oil, propane, or resistance heat, it usually wins clearly.
Install scope
A single-zone ductless unit can run $4,000–$8,000; whole-home ducted systems $10,000–$18,000+. Panel upgrades add more.
Rebates
The federal 25C heat-pump tax credit expired December 31, 2025, but many states and utilities still pay real money toward a heat pump. Those rebates can cut thousands off the net install and shorten the payback, check yours before pricing.
Common questions
How much does it cost to run a heat pump per month?+−
A typical US home runs a heat pump for about $60–$130 a month for heating, depending on local electricity rates, home size, climate, and the unit’s HSPF2 rating. Enter your fuel and rate above for your exact figure.
Is a heat pump cheaper than gas heat?+−
It depends on your gas and electricity prices. Where electricity is cheap and gas is expensive, heat pumps win; where natural gas is very cheap, a high-efficiency furnace can cost less to run. Against oil or propane, the heat pump almost always wins.
What is the payback period for a heat pump?+−
Most homeowners see payback in about 5–12 years, driven by the price gap versus your old system, annual fuel savings, and rebates. Replacing electric baseboard, oil, or propane heat usually pays back fastest.
What is HSPF2 and what is a good rating?+−
HSPF2 (Heating Seasonal Performance Factor 2) measures a heat pump’s heating efficiency under the current DOE test. Higher is better, roughly 7.5 is standard, 9 is high-efficiency, and 10 marks a cold-climate model.
How much does it cost to install a heat pump?+−
A whole-home ducted heat pump typically runs about $10,000–$18,000 installed, while ductless mini-splits are often lower per zone. The federal 25C credit expired at the end of 2025, so in 2026 it is state and utility rebates that reduce the net cost you actually pay.
Do heat pumps still work in cold weather?+−
Yes. Modern cold-climate heat pumps keep heating efficiently well below freezing, though efficiency drops as it gets colder, so running cost rises on the coldest days. Backup heat handles extreme cold.
Are heat pumps worth it?+−
For most US homes replacing aging AC plus oil, propane, or electric heat, yes: one system heats and cools, cuts fuel bills, and qualifies for incentives. Against cheap natural gas the case is closer, the calculator shows whether the savings beat the upfront cost for you.
Furnace efficiency assumptions: natural gas 92%, oil 85%, propane 90%, electric resistance 100%. HSPF2 is measured in BTU of heat per watt-hour of electricity. Fuel prices and installed costs are 2026 examples, a heat pump also replaces your AC, which this math doesn’t count in its favor. Full methodology →