Heat Pump vs Furnace Calculator
Compare the operating costs and benefits of heat pumps versus traditional gas furnaces. Calculate long-term savings and energy efficiency.
How to Use This Comparison Tool
This calculator helps you compare the true operating costs of heat pumps versus traditional gas furnaces over time. Input your home details, current energy rates, and system information to see projected savings and payback periods.
Information You'll Need
- Home square footage
- Current PG&E gas and electric rates (check your bill)
- Your typical winter heating usage patterns
- Estimated installation costs for each system
- Any available rebates or tax credits
What the Calculator Shows
- Annual operating cost for each system
- Total 10-year cost including installation
- Estimated carbon emissions difference
- Break-even timeline for higher upfront costs
- Impact of available incentives
Key Factors in the Heat Pump vs Furnace Decision
Upfront Cost
Gas Furnace + AC
Typically $7,000-$12,000 installed for mid-efficiency systems. If you already have a gas line and adequate ductwork, this is often the most affordable upfront option.
Heat Pump System
Typically $10,000-$18,000 installed. Higher upfront but qualifies for federal tax credits (up to $2,000) and utility rebates ($2,000-$4,000), bringing net cost closer to gas systems.
Operating Costs
Gas Furnace
Heating costs depend on natural gas prices. In 2025, Bay Area gas rates average $2.50-$3.50/therm. A typical home might spend $600-$1,200/year on gas heating.
Heat Pump
Runs on electricity at $0.25-$0.35/kWh in the Bay Area. Modern heat pumps are 2-3x more efficient than resistance heat, often resulting in $400-$800/year heating costs for the same home.
Climate Suitability
Best for Gas Furnaces
Coldest Bay Area microclimates (Livermore, Concord inland valleys) where winter temps regularly drop into the 30s. Gas provides reliable, powerful heat at any outdoor temperature.
Best for Heat Pumps
Coastal and moderate climates (San Francisco, Oakland, Berkeley, Peninsula). Modern cold-climate heat pumps work well even down to 5°F, covering virtually all Bay Area weather.
Environmental Impact
Gas Furnace Emissions
Burns natural gas on-site, producing CO2 emissions. A typical Bay Area home creates 3-5 tons of CO2 annually from gas heating.
Heat Pump Emissions
Runs on electricity. With California's 60%+ renewable grid, heat pumps produce 50-70% less CO2 than gas furnaces. If you have solar panels, emissions approach zero.
Bay Area-Specific Considerations
PG&E Rate Structures
Bay Area gas and electric rates vary significantly by season and usage tier. Heat pumps benefit from more stable electric rates, while gas prices can spike in winter. Time-of-use (TOU) rates may favor heat pumps if you heat primarily during off-peak hours.
Available Incentives (2025)
Federal: Up to $2,000 tax credit for high-efficiency heat pumps. State/Local: TECH Clean California offers rebates up to $4,000 for heat pump upgrades. Income-qualified households may qualify for $8,000+ through additional programs. Gas furnaces typically receive minimal or no rebates.
Future-Proofing
Some Bay Area cities are moving toward all-electric building codes and gas appliance phase-outs. Berkeley, San Jose, and San Francisco have restrictions on gas in new construction. Heat pumps align with these trends and protect against potential future gas infrastructure costs.
Cooling Bonus
Heat pumps provide both heating and cooling. Inland Bay Area homes (Walnut Creek, Livermore, San Ramon) that previously relied on window AC units or no cooling at all gain year-round comfort with a single system—a major advantage over furnace-only heating.
Frequently Asked Questions
Is a heat pump worth the extra cost in the Bay Area?
For most Bay Area homes, yes. The combination of federal tax credits, local rebates, lower operating costs, and dual heating/cooling functionality often makes heat pumps cost-effective within 5-8 years. In moderate climates like Oakland or Berkeley, payback can be even faster.
Will a heat pump work during cold Bay Area winters?
Absolutely. Modern cold-climate heat pumps operate efficiently down to 5°F or lower. Since Bay Area winter lows rarely drop below 35-40°F (except in rare cold snaps), heat pumps provide reliable heating all winter long. For extra peace of mind in colder inland areas, consider a hybrid system with gas backup.
What if gas prices stay low or electric rates go up?
That's a valid concern. However, heat pump efficiency (300%+) means they use far less energy than direct electric heat. Even with higher electric rates, many Bay Area homes still save money. The calculator lets you model different rate scenarios to see how your costs would change.
Can I keep my existing gas furnace as backup?
Yes—that's called a hybrid or dual-fuel system. The heat pump handles most heating efficiently, and the gas furnace provides backup during extreme cold or high demand. This offers maximum efficiency, reliability, and comfort while qualifying for heat pump incentives.
How do I know which option is right for my home?
Use this calculator as a starting point, then schedule a free consultation. We'll assess your home's insulation, ductwork, electrical capacity, and specific comfort needs to recommend the most cost-effective solution. Every home is unique, and there's no one-size-fits-all answer.
Related Resources
System Selector
Not sure which system type fits your needs? Take our interactive quiz for personalized recommendations.
Savings Calculator
Calculate your potential energy savings and payback period with a new high-efficiency system.
Financing & Rebates
Explore 0% financing options and learn how to access available rebates and tax credits.
Get Expert Advice
Our HVAC specialists can help you understand these cost comparisons in the context of your specific home and provide accurate installation quotes.