Heat Pump Calculator

Calculate heat pump size and savings vs gas furnace, electric, or oil heating.

By Konstantin Iakovlev · Updated September 2026 · Source: DOE

Annual Savings

$500.00

Installed Cost

$15,000.00

Payback

30.0 years

The 30% federal credit for heat pumps (Section 25C, capped at $2,000) expired December 31, 2025 under the One Big Beautiful Bill Act. Equipment placed in service in 2026 does not qualify — the IRS looks at the install date, not the purchase or contract date. State and utility rebates may still apply and are often substantial; check your state energy office and your utility.

Heat Pump Analysis

Recommended Size3.3 tons
SEER Rating20
Install Cost$15,000.00
Total Cost$15,000.00
Current Gas Furnace Cost$1,200.00/yr
Heat Pump Annual Cost$700.00/yr

Use the Heat Pump Calculator above to calculate your results. Enter your values and see instant results — all calculations run in your browser.

Disclaimer: This calculator is for informational purposes only. Results are estimates from the numbers you enter and the assumptions described on this page; check them against local building codes, product specifications and current prices, and have structural, electrical or gas work designed or checked by a licensed professional.

How It Works

A heat pump replaces a furnace with an electric system that moves heat instead of making it, and it cools in summer too. This calculator sizes a system for your home, estimates its installed price and compares its yearly running cost with your current heating, so you can see how long the switch takes to pay back now that the federal tax credit has ended.

Size is about one ton of capacity per 600 square feet, 30% more in a cold climate and 10% less in a hot one, at an installed price of about $4,500 a ton. Running costs start from reference figures for a 2,000 sq ft home in a moderate climate (gas furnace $1,200 a year, oil $1,800, electric resistance $2,000, heat pump $700) and scale with floor area and with the climate's heating load; in a cold climate the heat pump's cost is raised a further 20% for its lower efficiency.

Local prices move the answer more than anything else: where electricity is expensive and gas is cheap, savings over a gas furnace are thin, while replacing oil or electric resistance heat usually pays back far sooner. The 25C credit of up to $2,000 ended for systems placed in service after December 31, 2025, so check your state energy office and utility for rebates, which the tool does not subtract.

Example: Replacing an Oil Furnace with a Heat Pump

  1. 1 A 2,000 sq ft home in a moderate climate is heated by an oil furnace.
  2. 2 The tool sizes a 3.3-ton heat pump (2,000 / 600) at about $15,000 installed.
  3. 3 Oil heating costs about $1,800 a year against $700 for the heat pump, a saving of $1,100 a year.
  4. 4 Payback is about 13.6 years ($15,000 / $1,100). The same home switching from a gas furnace saves only $500 a year, a 30-year payback, which is why the fuel you replace matters most.

Source: DOE · Last updated: September 2026

Frequently Asked Questions

How much does a heat pump cost to install?
Quotes vary widely with size, efficiency and ductwork. This calculator assumes about $4,500 per ton installed, so a typical 3-ton air-source system comes to about $13,500; ground-source (geothermal) systems commonly run $15,000-$30,000 or more. The federal credits that used to offset this — 25C (up to $2,000 for air-source) and 25D (30% with no cap for geothermal) — expired December 31, 2025, so 2026 installs rely on state and utility incentives.
How much can a heat pump save compared to a gas furnace?
A heat pump moves heat instead of burning fuel, so it can deliver two to four times more heat energy than the electricity it uses (DOE). Savings depend on local electricity vs gas rates. In this calculator a 2,000 sq ft home in a moderate climate saves $500 a year switching from a gas furnace ($1,200 against $700) and $1,100 switching from oil. In very cold climates, a dual-fuel system (heat pump plus gas backup) is often optimal.
Do heat pumps work in cold climates?
Yes. ENERGY STAR tests certified cold-climate air-source heat pumps down to 5°F; they keep working below that, and in even colder weather pairing one with a backup heat source heats the home most efficiently. This calculator raises the heat pump's running cost by 20% in a cold climate for its lower efficiency.

You might also need

Solar Panel Savings Calculator

Estimate solar panel system cost, payback period, and 25-year savings with state incentives (the federal 25D credit ended after 2025).

Electricity Bill Calculator

Calculate your monthly electricity bill by adding appliances and their usage. Find your biggest energy consumers.

Carbon Footprint Calculator

Estimate your annual carbon footprint from driving, electricity, flights, and diet. Compare to the US average.