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Heat Pump vs Gas Furnace Calculator
See what heat pump heating actually costs against your gas furnace at today's Xcel rates, explore dual fuel options, and see how a heat pump changes your solar math.
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AI Summary
At today's Xcel rates, gas costs the same or less than heat pump heat at every Denver winter temperature on the flat rate, against both an older 80% furnace and a new 95% furnace. Time-of-use electricity narrows the gap but a heat pump still costs more over a full winter. A dual fuel system keeps a gas furnace as backup while you still get heat pump cooling. Use the calculator to see the numbers for your equipment.
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Setting the switchover on your thermostat
heatpump.blue finds the lockout temperature that costs least for your ZIP, heat pump model and backup heat, and tells you where to set it on your own thermostat. Setup guides for ecobee, Honeywell and other thermostats.
The Energy Economics
Understanding the Crossover Point
Heat pump efficiency (COP) varies by temperature. On Xcel's flat rate, a heat pump would need a COP above 4.1 to match an older 80% furnace, or above 4.9 to match a new 95% furnace. Neither COP happens at any Denver winter temperature.
Break-Even COP 4.1 to 4.9
On Xcel's flat rate, a heat pump would need a COP above 4.1 to match an older 80% furnace, and above 4.9 to match a new 95% furnace. Cold-climate heat pumps don't reach that COP at any Denver winter temperature.
Gas Is Cheaper at Every Outdoor Temperature
On Xcel's flat rate, a 95% furnace costs the same or less than heat pump heat at every outdoor temperature a Denver winter produces. An older 80% furnace is close behind.
Time-of-Use Narrows the Gap
On Xcel's time-of-use plan, heat pump heating still costs about $120-230 a year more than an older 80% furnace, for a 2,000 sq ft home. It also cools far more efficiently than an older AC.
Dual Fuel Keeps Backup Heat
Hybrid systems keep a gas furnace as backup and let you set a thermostat lockout temperature. That's about flexibility and cold-weather capacity, not winter operating savings at today's rates.
Dual Fuel Heat Pump Calculator
Combine heat pump efficiency with gas furnace backup for the lowest operating costs across Colorado winters.
What Is a Dual Fuel Heat Pump System?
A dual fuel system pairs a cold climate heat pump with your existing gas furnace. You set a thermostat lockout temperature: the heat pump runs above it, the furnace runs below it. At today's Xcel rates gas costs the same or less than heat pump heat across the Denver winter, so most dual fuel setups run on gas for most of the season.
The heat pump handles cooling year-round and can be set to run in mild weather above your lockout temperature. At today's rates this isn't a cost advantage on the flat rate; it's a comfort and even-heat choice.
Below the lockout temperature the furnace takes over. On Xcel's flat rate, gas costs the same or less than heat pump heat at every outdoor temperature, so this is where the lowest cost actually is.
How the Calculator's Dual Fuel Mode Works
Toggle "Dual Fuel Mode" in the calculator above and use the slider to set your lockout temperature. The calculator shows:
- •Annual cost for dual fuel vs all-electric heat pump vs gas-only
- •Hours per year each system runs based on Denver climate data
- •Cost breakdown by configuration, so you can see where each lockout setting lands
Why Choose Dual Fuel in Colorado
Cold-Weather Backup Capacity
The furnace covers the coldest days without relying on electric resistance backup heat.
Heat Pump Cooling Included
You still get a heat pump's cooling efficiency, even when the furnace handles most of the heating.
Keep Your Existing Furnace
If your gas furnace works, no need to replace it. Add a heat pump, wire them together.
Flexibility as Rates Change
If Xcel's gas or electric rates shift, you can move the lockout temperature to match.
Solar + Heat Pump: What Changes
If you have rooftop solar (or are planning it), here's how a heat pump affects your solar math.
Your Solar Was Sized for Gas Heating
When your solar was installed, the system was sized to cover your electric bill at that time: appliances, lighting, and AC. Your gas furnace wasn't part of the electric equation. Adding a heat pump shifts your heating from gas to electric, which means your solar now has to cover a much larger load.
Solar covers ~100% of your electric usage. Net metering credits roll over from summer surplus to winter. Your electric bill is near zero. Everything is balanced.
The heat pump adds 3,000-6,000+ kWh/year to your electric usage. Your solar now covers 60-75% of the total. You'll buy the difference from the grid, especially in winter when solar production is lowest and heating demand is highest.
How the Calculator Models This
Toggle "Solar Impact" in the calculator above. Select "I have solar" and set your system size. The calculator models month-by-month net metering: summer solar surplus builds credits that offset some winter grid purchases. The result is your real effective heating cost after solar.
- •Coverage gap shows how much of your new total usage your solar still covers
- •Month-by-month breakdown shows winter deficit and summer surplus patterns
- •Effective heating rate shows what you actually pay per kWh after net metering credits
Planning Sequence Matters
Already have solar?
Use "I have solar" mode to see your real coverage gap. Your existing system was sized under Xcel's 120% cap based on pre-heat-pump usage. Budget for some grid electricity.
Planning both?
Install the heat pump first, then size solar to your new total usage. Xcel now allows sizing up to 200% of expected consumption, which gives room for electrification.
When to Use Heat Pump vs Furnace
Temperature thresholds explained: why COP matters more than the thermometer reading.
The Temperature Threshold Explained
Heat pump operating costs depend on COP (Coefficient of Performance), which declines as outdoor temperature drops. On Xcel's flat rate, a heat pump would need a COP above 4.1 to match an older 80% furnace, or above 4.9to match a new 95% furnace. Cold-climate heat pumps don't reach either COP at any Denver winter temperature, so gas costs the same or less across the whole heating season. Time-of-use electricity narrows the gap in mild weather but doesn't close it over a full winter.
Why COP Decline Matters
As outdoor temperature drops, heat pumps work harder to extract heat from cold air. A heat pump with COP 3.5 at 47°F might drop to COP 2.2 at 5°F. This is normal physics, not a defect.
Matching a new 95% furnace needs a COP of 4.9; matching an older 80% furnace needs 4.1(at current Xcel rates: $0.88/therm gas, $0.155/kWh electric, as of 2026-10). Cold-climate heat pumps top out well under 4.9, so a 95% furnace costs the same or less at every Denver winter temperature, and an older 80% furnace is close behind.
Cold climate models maintain higher COP at low temps than standard models, but none of them clear this break-even bar at Colorado winter temperatures. Dual fuel still makes sense in Colorado, not because it undercuts gas on cost, but because it keeps furnace backup capacity for the coldest days and gives you heat pump cooling the rest of the year.
The temperatures on this page assume a 2,000 sq ft home with average air tightness and duct losses and a cold-climate heat pump rated HSPF2 9 to 10. A more efficient heat pump or an older, less efficient furnace moves the crossover lower. A leakier house leans harder on backup heat on cold days, which favors switching to gas sooner. Xcel recommends starting the changeover at about 25°F, and you can change it on the thermostat any time.
Heat Pump vs Gas Furnace Cost: The Real Numbers
Why a heat pump isn't about a lower heating bill at today's rates, and where the real value is.
Operating Cost Reality Check
With current Xcel rates ($0.88/therm gas, $0.155/kWh electric, as of 2026-10) and a properly sized cold climate heat pump, a 2,000 sq ft home costs about $320-440 a year more to heat with a heat pump than with an older 80% furnace over a full Denver heating season, and $450-570more than with a new 95% furnace. On Xcel's time-of-use plan the gap narrows but the heat pump still costs about $120-230 more than an older furnace.
The calculator above shows exact numbers based on your equipment and home size. Use it to see where you land. Here's the breakdown:
Where the Real Savings Are
At today's Xcel rates, heat pump heating doesn't lower your winter bill. The savings are upfront rebates: Xcel Energy rebates (up to $7,500), the Colorado state tax credit ($1,000), and Power Ahead Colorado ($1,500, no income limit) reduce net cost by $7,000-$10,000. The federal 25C tax credit ended December 31, 2025. For many homeowners, a heat pump system costs less to install than a furnace + AC combo after rebates.
If You Need AC Anyway
A heat pump replaces a separate air conditioner and cools more efficiently than an older unit. That summer cooling difference offsets part of the winter heating gap, though it doesn't erase it.
The Honest Case for Switching
Future-proofing against Colorado's Clean Heat Plan pushing gas rates up over time, and eliminating combustion inside the home. Neither is a bill-savings claim at today's rates.
What to Factor Into Your Decision
If you're deciding between heat pump and gas furnace, here's what actually moves the math:
Heat pump installation: $19,577-$31,800. Minus $5,500-$10,000 in rebates (Xcel, Power Ahead and state credit). Compare net cost to furnace + AC replacement ($10,600-14,800). Typical ranges; actual costs depend on equipment and home. Get a free estimate for your situation.
Use the calculator above. For a 2,000 sq ft home it ranges from about $120-230 to $450-570 more a year on the heat pump, depending on your furnace and rate plan. If you need AC, factor in cooling cost savings vs a separate AC unit.
Colorado Clean Heat Plan may raise gas rates over time. A heat pump gives you flexibility against that, even though it costs more to run at today's rates.
Both heat pumps and furnaces last 15-20 years with proper maintenance. No advantage either way on replacement cycle.
The Honest Bottom Line
Here's what the math actually shows for Colorado homeowners.
Gas is cheaper at every modeled outdoor temperature on the flat rate
On Xcel's flat rate, a typical cold-climate heat pump's COP never reaches 4.1 (vs. an older 80% furnace) or 4.9 (vs. a new 95% furnace) at any Denver winter temperature, so gas wins across the board.
Time-of-use electricity narrows the gap but doesn't close it
On Xcel's time-of-use plan, hourly heat pump cost roughly ties an 80% furnace in the 35-45°F range, but the full winter still costs about $120-230 more on the heat pump for a 2,000 sq ft home.
Over a full heating season, gas wins on both rate plans
For a 2,000 sq ft home, a heat pump costs about $320-440 a year more than an older 80% furnace on the flat rate, and $450-570 more than a new 95% furnace. On time-of-use it's about $120-230 more against an older furnace. Summer cooling from a heat pump is more efficient than an older AC, which offsets some of this.
Backup heat changes everything
If you have a lot of backup heat running (electric resistance), your costs will be higher than gas. Proper sizing is critical.
Why Get a Heat Pump If Gas Isn't More Expensive?
Fair question. Here's the case.
Colorado's Clean Heat Plan is pushing electrification. Gas rates may rise. Electric rates may fall as renewables scale. A heat pump gives you flexibility.
A heat pump provides cooling too. If you'd need AC anyway, the incremental cost for heating is much lower.
With Xcel (up to $7,500), the Colorado state credit ($1,000), and Power Ahead Colorado ($1,500, no income limit) rebates, a heat pump can cost similar to or less than a furnace + AC combination. The federal 25C tax credit ended Dec 2025.
Heat pumps run much quieter than furnaces. When your heat pump handles heating (most of Denver's winter), you get near-silent operation compared to burners igniting.
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