Heat Pump vs. Furnace: Which Costs More to Install?

A standard ducted heat pump typically costs about $2,700 to $4,300 per ton installed, a cold-climate heat pump $4,000 to $6,500 per ton, and a furnace paired with a central air conditioner $3,000 to $4,500 per ton. For a common 3-ton system, that makes a standard heat pump ($8,100–$12,900) cost about the same as furnace-plus-AC ($9,000–$13,500), and a cold-climate heat pump ($12,000–$19,500) cost more. This guide covers installed cost; running cost depends too much on local energy prices to estimate nationally.

Installed cost by system

Most homes need 2 to 5 tons of capacity, roughly 1 ton per 400–600 square feet, though actual sizing depends on insulation, climate, and window area — a contractor's load calculation (Manual J) is the only way to size a system correctly, and oversizing wastes money on equipment that cycles inefficiently.

These figures assume a ducted system that reuses your existing ductwork. Going ductless is a different job: Zonda's 2025 Cost vs. Value Report priced converting a 2,000 square foot home from a furnace to a 4-ton ductless heat pump with five indoor units at $19,484.

Standard vs. cold-climate heat pumps

A standard heat pump loses efficiency as outdoor temperatures drop and can struggle to keep up below roughly 25–35°F, which is why colder climates historically paired heat pumps with a backup furnace or electric resistance heat. A cold-climate heat pump uses a variable-speed compressor that is rated to deliver heat efficiently at 5°F and keeps running well below 0°F. It costs more upfront but can fully replace a furnace even in a northern climate.

Whichever you choose, pair it with a thermostat that supports heat pumps with backup heat, so the system doesn't switch to expensive resistance heat when it doesn't need to. The smart thermostat savings calculator estimates what a smart thermostat costs and saves.

Why the calculator doesn't estimate running cost

Heat pumps move heat rather than generate it, so they're meaningfully more efficient than a furnace at converting input energy into heat — often 2 to 4 times more efficient. But a furnace burns gas, which is priced per therm, while a heat pump runs on electricity, priced per kWh. Whether that efficiency advantage translates into lower bills depends entirely on your local gas and electricity rates, which vary enough across the country that a single national number would be misleading. ENERGY STAR publishes guidance for comparing systems in your climate.

Why there's no federal tax credit to factor in

The Section 25C Energy Efficient Home Improvement Credit covered 30% of a qualifying heat pump's cost, up to $2,000 a year, for equipment placed in service through 2025. The One Big Beautiful Bill Act ended the credit for anything placed in service after December 31, 2025. Some states, utilities, and manufacturers still run their own heat pump rebate programs, and in several states those rebates are large enough to make a heat pump cost less than a furnace and AC replacement — worth checking before you decide.

Sources

• ENERGY STAR — Air-source heat pumps
• Cost vs. Value 2025 — HVAC Conversion, Electrification (project scope)