Who ends up with the high bill
Most homeowners writing this search went all-electric without the prep that makes all-electric cheap. No solar, no batteries, no air sealing, and often a house that is leaky or too big to heat on electricity at Colorado rates. They bought on marketing, did not do enough research, and found out on the first January bill.
The heat pump itself is rarely the problem. At a mild-winter COP of 3, a cold-climate unit delivers heat for about the same money as a 95% furnace burning gas at Denver prices (table below). What breaks the bill is where the heat comes from on the coldest days. In an all-electric air handler, that is often the resistance strips, which cost more per unit of heat than anything else on the table.
Dual fuel done right goes the other direction. The heat pump runs when it is the cheaper fuel and the gas furnace takes over below a changeover point, so the combined winter bill goes down. The rest of this page turns each cause into a question you can ask before you sign. For the wider list of tradeoffs, see heat pump downsides in Denver.
What a dual-fuel bill looks like in Denver
Our expectation for a dual-fuel install is combined winter utility dollars (gas plus electric together) roughly 5 to 10% lower than the old furnace alone, and summer cooling roughly 15 to 20% lower than the old AC. That is what we expect from the systems we install, not a guarantee. Your house sets the actual number.
The winter savings come from the heat pump running only when it is the cheaper fuel. We program the changeover at about 25°F, and below that the furnace carries the load. That setpoint is an operating-cost decision, because gas is cheap in Colorado right now. It is not a limit of the equipment. The cold-climate units we install (Carrier Infinity 27VNA1 rated to -23°F, Bosch IDS Ultra at 100% capacity at 5°F, Mitsubishi Hyper-Heat) could heat the whole house on their own. Most homes just do not have the solar and batteries to make that cheap.
The summer number is simpler. The heat pump replaces an older AC, and the jump in SEER2 is where the cooling savings come from.
Dual fuel can be re-tuned any time. If gas rates climb, the changeover moves down and the heat pump carries more of the winter. If electric rates climb, it moves up. That flexibility is why we recommend dual fuel over all-electric for most Denver homes.
The math: gas vs heat pump per 100,000 BTU
This is an example. Costs vary by house, system size, and brand. One therm of gas is about 100,000 BTU, so the table compares what it costs to deliver that much heat into the house. Rates are the ones in our heat pump vs gas furnace operating-cost comparison, roughly $1.10 per therm and $0.11 per kWh. [OWNER CHECK: confirm current Xcel rates]
- System
- Gas furnace
- Efficiency
- 95% AFUE
- Energy for 100,000 BTU
- 1.05 therms
- Cost
- $1.16
- System
- Heat pump, mild day
- Efficiency
- COP 3.0
- Energy for 100,000 BTU
- 9.8 kWh
- Cost
- $1.08
- System
- Heat pump, single digits
- Efficiency
- COP 2.0
- Energy for 100,000 BTU
- 14.7 kWh
- Cost
- $1.62
Read the last two rows together. The same heat costs half again as much once outdoor temperature drops the COP from 3 to 2. That gap is the entire reason the changeover exists, and it is why an all-electric house with no gas fallback and strips running on cold nights sees a bill nobody warned them about. Per-model wattage by temperature is in do heat pumps use a lot of electricity.
Five questions to ask before you sign
1. All-electric or dual fuel, and why for my house? A good answer names your gas service, your roof, and your envelope before naming a product. If the default is all-electric with no mention of solar, batteries, or air sealing, that is the marketing path, and it is how most of the bills above happened. What the house needs first is in preparing a home for a heat pump conversion from gas.
2. What changeover temperature will you set, and can I change it? Ours is about 25°F and it is adjustable. Set too high, the furnace burns gas on days the heat pump would have been cheaper. Set too low, the heat pump runs at COP 2 on nights gas would have won. Either mistake shows up as a bill that does not match the pitch.
3. Is it sized for the heating load or the cooling load? Most installers size to the cooling load, which leaves the unit short on heat and leaning on backup at exactly the temperatures where backup is expensive. We size for the heating load under the Xcel Quality Install rule, heating size factor of at least 1.0 at about a 5°F design temperature. Why two quotes land on different tonnage is in why heat pump quotes differ in size.
4. Is there electric strip heat, and when does it run? Every all-electric air handler has resistance strips. Ask when they are allowed to run and at what outdoor temperature they lock out. If the installer cannot tell you, the strips will run whenever the thermostat calls for more heat than the heat pump is giving, which is the expensive case.
5. What does my house need before all-electric works? The real answer usually includes air sealing, solar, batteries, and a look at the panel (see electrical upgrades for home electrification). If the answer is "nothing," the bill in this article is the one you will get.
Get the answers on the quote
All five answers should be on the paper before you sign: system type, changeover setting, sizing basis, backup heat behavior, and what the house needs first. If a quote is missing them, ask. Our list of what belongs in an HVAC quote covers the rest.
Want a design that is honest about the bill?
Cold-climate equipment sized for the heating load, a changeover you can adjust, and every rebate filed by us. We'll answer all five questions on estimate day.
