Heat Pump Savings Calculator

How heat pumps save money:

Heat pumps do not generate heat — they move it from outside air or ground into your home. This makes them 2 to 5 times more efficient than furnaces or electric heaters that create heat by burning fuel or running current through resistance coils.

Coefficient of Performance (COP):

COP = Heat delivered (kWh) / Electricity consumed (kWh)

A COP of 3.0 means for every 1 kWh of electricity used, the heat pump delivers 3 kWh of heat into your home. By comparison, a gas furnace with 90% efficiency only delivers 0.9 kWh of heat per 1 kWh equivalent of gas.

How this calculator works: It estimates your annual heat demand in kWh based on your current heating bill and fuel type, then calculates how much electricity a heat pump would need to deliver the same amount of heat.

Annual Heat Demand = (Annual Bill / Fuel Cost per kWh) × Current System Efficiency Heat Pump Cost = (Heat Demand / COP) × Electricity Rate

Typical COP values by system type:

Practical Example: You currently spend $1,800 per year on natural gas heating. An air-source heat pump with COP 3.0 and electricity at $0.14/kWh would cost approximately $750 per year for the same heating — saving you about $1,050 annually. With installation at around $8,000, the payback period is roughly 7.6 years.

When heat pumps save the most:

• Moderate climates where extreme cold is rare (COP drops in very cold weather)
• Replacing expensive fuels like oil, propane, or electric resistance heating
• Regions with low electricity rates relative to gas prices
• Heat pumps also provide air conditioning in summer, replacing a separate AC unit

Tips:

• Federal tax credits and local utility rebates can reduce installation costs by 30% or more
• Ground-source systems cost more upfront but have higher COP and last 20-25 years
• In very cold climates (below -10F / -23C), a dual-fuel system that pairs a heat pump with a gas furnace backup is often the most cost-effective solution