Heat Pump Savings Calculator Pro
Annual savings, payback, financing, monthly costs and CO₂, compared side by side with your current heating.
Monthly energy cost: current vs. heat pump
Year 1, including heating, cooling and backup fuel. Hover a month for details.
Cumulative net position over time
Starts at minus your net cost; the line crosses zero at payback.
Year-1 cost breakdown
Where the savings come from.
Sensitivity: year-1 savings
Electricity price (rows) × heat pump COP (columns). Outlined cell = your inputs.
▸ Year-by-year table
How it works: Delivered heat = fuel × energy content × old efficiency (oil 138,500 BTU/gal, propane 91,500 BTU/gal, gas 100,000 BTU/therm, electricity 3,412 BTU/kWh). Heat pump kWh = delivered heat ÷ (COP × 3,412). Monthly figures spread annual heat by typical heating-degree-day shares, with COP lower in colder months. CO₂ factors: oil 22.4 lb/gal, propane 12.7 lb/gal, gas 11.7 lb/therm. Estimates only, not a substitute for a Manual J load calculation and contractor quotes. The federal 25C heat pump tax credit does not apply to systems installed after December 31, 2025.
Heat Pump Savings Calculator: How Much Will You Really Save in 2026?
Compare your current heating bill against a modern air-source heat pump. Enter your fuel, prices and climate to see annual savings, payback period and the electricity price where a heat pump stops paying off.
Jump to the calculator ↓Switching to a heat pump typically saves $800–$1,800 per year if you currently heat with heating oil, propane or electric baseboard, because a heat pump delivers 2–4 units of heat for every unit of electricity it uses. If you heat with natural gas, savings are small or even negative at today’s average electricity price of about 18¢/kWh, unless you also replace an old air conditioner or have cheap electricity. The federal 25C tax credit ended for systems installed after December 31, 2025, so state and utility rebates now decide most paybacks.
A heat pump doesn’t burn fuel to make heat. It moves heat that already exists in outdoor air into your home, which is why it can be 250–350% efficient over a heating season while the best gas furnace tops out around 98%. Whether that efficiency turns into real savings depends on just three numbers: what you pay for your current fuel, what you pay for electricity, and how cold your winters get. The calculator below does the math for your house.
Heat Pump Savings Calculator
Defaults are set for a typical oil-heated home in a moderate climate. Replace them with numbers from your own bills for the most accurate answer.
🔥 → ❄️ Heat Pump Savings Estimator
Estimates only. Results assume the heat pump covers your full heating load at the seasonal COP you entered and that energy prices for both fuels rise at the same rate. Get a Manual J load calculation and written quotes before buying.
How the Heat Pump Savings Calculator Works
The calculator converts whatever you burn today into the actual amount of heat your home uses, then works out how much electricity a heat pump would need to deliver that same heat. Here is the exact math, so you can check it against your own bills:
Heat pump electricity (kWh) = heat used ÷ (COP × 3,412)
Heat pump heating cost = kWh × electricity price
Annual savings = current cost − heat pump cost + cooling savings
Break-even electricity price = current heating cost ÷ heat pump kWh
Fuel energy content
Heating oil ≈ 138,500 BTU/gal, propane ≈ 91,500 BTU/gal, natural gas = 100,000 BTU/therm, electricity = 3,412 BTU/kWh.
Old-system losses
An 80% AFUE furnace wastes 20% of the fuel up the flue. Only the useful heat counts toward what the heat pump must replace.
Seasonal COP
COP falls as it gets colder. A seasonal average blends mild shoulder months with deep-winter days, including any backup strip heat.
The break-even electricity price is the most useful number in the results. It tells you the highest kWh rate at which the heat pump still costs the same as your current system. If your actual rate is well below it, you have a comfortable cushion against future electricity price increases.
Heating Fuel Cost Comparison: Cost per Million BTU of Delivered Heat
The fairest way to compare heating fuels is the cost to put one million BTU (MMBtu) of usable heat into your home. The table uses 2026 national-average prices: electricity at 18.2¢/kWh, natural gas at about $1.35/therm, propane at $2.46/gallon and heating oil at $3.75/gallon. Lower is better.
| Heating system | Efficiency | Cost per MMBtu delivered |
|---|---|---|
| Natural gas furnace (high-efficiency) | 95% AFUE | |
| Heat pump, mild climate | COP 3.5 | |
| Natural gas furnace (standard) | 80% AFUE | |
| Heat pump, moderate climate | COP 3.0 | |
| Heat pump, cold climate | COP 2.5 | |
| Propane furnace | 90% AFUE | |
| Heating oil boiler/furnace | 85% AFUE | |
| Electric baseboard / resistance | 100% |
Calculated by this site from national-average prices. Your local prices can shift the ranking, especially for natural gas versus heat pumps.
Two patterns jump out. First, even a heat pump struggling through a cold winter (COP 2.5) delivers heat for roughly 30% less than propane or oil and 60% less than electric baseboard. Second, natural gas and heat pumps land in the same price band, so for gas homes the answer depends heavily on your local rates.
Real-World Savings Examples by Fuel Type
Here’s what the calculator shows for four typical homes in a moderate climate (seasonal COP 2.8, electricity at 18.2¢/kWh). Heating-only figures, before cooling savings:
| Current system | Yearly use | Current cost | Heat pump cost | Annual savings |
|---|---|---|---|---|
| Electric baseboard | 15,000 kWh | $2,730 | $975 | |
| Heating oil, 85% AFUE | 800 gal | $3,000 | $1,794 | |
| Propane, 90% AFUE | 900 gal | $2,214 | $1,412 | |
| Natural gas, 80% AFUE | 700 therms | $945 | $1,067 |
Add cooling into the picture and the numbers improve. Replacing a 10-SEER air conditioner that uses 2,000 kWh a year with a 16-SEER2 heat pump cuts about 750 kWh, worth roughly $135 per year. That’s enough to push the gas example close to break-even, but not into meaningful savings.
6 Factors That Decide Your Heat Pump Savings
Your current fuel
The single biggest factor. Oil, propane and electric resistance homes almost always save. Gas homes often don’t.
Electricity rate
Every 1¢/kWh change moves annual cost by about 3–5%. Ask your utility about heat pump or time-of-use rates.
Winter climate
Colder air means lower COP. Cold-climate models hold efficiency far better below 20°F than older units.
Home insulation
A leaky house needs more heat no matter the source. Air sealing first can allow a smaller, cheaper heat pump.
Correct sizing
Oversized units short-cycle and lose efficiency; undersized ones lean on expensive backup strip heat.
Rebates & timing
Replacing at end-of-life, or stacking state and utility rebates, often matters more than equipment efficiency.
Heat Pump Tax Credits and Rebates in 2026
With the federal credit gone, incentives now come from three places:
- State rebate programs (HEAR): Federal Home Electrification and Appliance Rebate funds were granted to state energy offices rather than delivered as tax credits, so they were not clawed back. These programs are income-qualified and roll out on different schedules state by state. Check your state energy office.
- Utility rebates: Many electric utilities offer $500–$3,000+ per system. Some programs are far larger. Massachusetts homeowners may qualify for up to $9,000 through Mass Save.
- State tax credits: A few states run their own credits. Colorado, for example, offers a state tax credit of $1,500 per air-source heat pump.
Enter the total of everything you qualify for in the “Rebates & credits” field of the calculator to see the effect on payback.
How Much Does a Heat Pump Cost to Install in 2026?
Installed cost is the other half of the payback equation. Average 2026 prices before incentives:
| System type | Typical installed cost | Relative cost | Best for |
|---|---|---|---|
| Single-zone ductless mini-split | $1,500 – $5,000 | One room, addition, garage | |
| Hybrid / dual-fuel (heat pump + furnace) | ≈ $14,350 | Gas homes in cold climates | |
| Central ducted heat pump | ≈ $14,530 | Homes with existing ductwork | |
| Whole-home multi-zone ductless | ≈ $25,400 – $26,000 | Boiler and baseboard homes | |
| Geothermal (ground-source) | $15,000 – $35,000 | Very cold climates, long ownership |
Averages from EnergySage marketplace data and Fixr 2026 cost guides. Labor, electrical panel upgrades and duct repairs can move totals significantly.
8 Ways to Maximize Your Heat Pump Savings
Use your real bills
Pull 12 months of fuel deliveries or gas bills. Subtract summer gas use (water heating, cooking) so you only count space heating.
Buy a cold-climate model
If you see sub-10°F winters, choose a unit rated to keep high capacity at 5°F. It keeps your seasonal COP up and backup heat off.
Insist on a Manual J
A room-by-room load calculation prevents oversizing, which is the most common cause of disappointing efficiency.
Seal and insulate first
Attic insulation and air sealing are cheap and shrink the heat load, letting you buy a smaller system.
Keep the old system as backup
Gas and oil homes in cold areas can run dual-fuel: the heat pump covers most hours, the furnace only the coldest ones.
Ask about heat pump rates
Some utilities offer a discounted winter kWh rate for heat pump owners. Even 2–3¢ off changes the math a lot.
Set it and forget it
Deep night setbacks can trigger strip heat on recovery. Small setbacks of 2–3°F or a steady setpoint usually work best.
Stack every rebate
Combine state, utility and manufacturer offers, and time the switch for when your current system is near the end of its life.
Heat Pump Savings: Frequently Asked Questions
How much money does a heat pump save per year?
Most homes switching from heating oil, propane or electric baseboard save $800–$1,800 a year at 2026 average prices. Homes switching from natural gas typically save little or nothing on heating, though replacing an old air conditioner adds $100–$200 in cooling savings.
Is a heat pump cheaper to run than a gas furnace?
It depends on your local prices. At national averages, a heat pump with a seasonal COP of 3.0 costs about $17.78 per MMBtu of heat versus $16.88 for an 80% gas furnace and $14.21 for a 95% furnace. If your electricity is cheap (under ~15¢/kWh) or gas is expensive, the heat pump wins.
What is the payback period for a heat pump?
For oil and propane homes, typical payback is 7–12 years on a full installation, and 3–5 years if you’re replacing a failing system anyway and only count the extra cost. Rebates can shorten this considerably. Use the calculator above for your exact figure.
Is there still a federal tax credit for heat pumps in 2026?
No. The Section 25C credit ended for heat pumps placed in service after December 31, 2025. Systems installed in 2025 can still claim up to $2,000 on the 2025 tax return. In 2026, look to state HEAR rebates, utility rebates and state tax credits instead.
Do heat pumps work in cold climates?
Yes. Modern cold-climate air-source heat pumps keep producing heat well below 0°F, although efficiency drops as temperatures fall. That’s why the calculator uses a lower seasonal COP for cold regions. In very cold areas, a dual-fuel setup with a furnace for the coldest days is also an option.
How do I convert HSPF2 to COP?
HSPF is measured in BTU per watt-hour, so seasonal COP ≈ HSPF ÷ 3.412. Because HSPF2 uses a tougher test procedure, a practical shortcut is COP ≈ HSPF2 ÷ 2.9. Real-world COP in a cold climate is often a bit lower than the rating suggests.
Will a heat pump raise my electric bill?
Yes, your electric bill goes up because you’re moving heating onto electricity, but your oil, propane or gas bill shrinks or disappears. The calculator’s “extra electricity used” line shows the added kWh, and the savings figure is the net change across both bills.
Does a heat pump also save money on air conditioning?
A heat pump is also your air conditioner. If it replaces an older unit (SEER 8–10), a modern SEER2 15–20 heat pump typically cuts cooling electricity by 35–50%. Tick the cooling box in the calculator to include it.
The bottom line: a heat pump is one of the most reliable ways to cut heating costs if you burn oil, propane or use electric baseboard, and a closer call for natural gas homes. Run your own numbers above, collect at least three quotes, and check rebates before you decide.
