Heat pump or gas furnace: what to tell a customer, by state

The margin in your state, today

Everything below is the December 2025 to February 2026 EIA heating season mean, pulled 31 August 2026, for a cold climate heat pump at HSPF2 11.0 with 10% of heat from resistance backup, against a 95% AFUE gas furnace.

• Heat pump cheaper to run in 4 states: Arkansas, Hawaii, North Carolina, Washington.
• Gas cheaper to run in 33 states. The full list, sorted by price ratio, is on the state index.
• Inside 10% in 8 states, listed in the next section.

Every state page carries the same figures for propane, heating oil and electric resistance as well. Against those three the heat pump wins almost everywhere, usually by a wide margin, so if your customer is on oil or propane the running cost conversation is short and the real discussion is capital.

Natural gas is the only fuel that regularly beats a heat pump on running cost, which is why it is the only one worth arguing about.

The 8 states where no confident pitch is defensible

These are the states where the two systems land within 10% of each other. That threshold is not arbitrary: across sixteen heating seasons of EIA data, more than a third of season-to-season moves in the price ratio exceeded 10%, so a margin narrower than that will not reliably survive the next winter.

Will natural gas stay cheap? This site will not tell you

It is the question underneath most of this, and the honest answer is that nobody knows, including the people who publish forecasts about it.

Two things follow, and both are more useful than a prediction.

Treat any supply-side argument as a claim with an interest attached

Trade bodies, utilities and equipment manufacturers all publish outlooks, and all of them have a position. That does not make any particular forecast wrong. It does mean that leaning on one in front of a customer transfers its risk onto your recommendation, and the customer is the one who lives with a twenty year decision.

If you want to use a price outlook, use one from a source with no stake in the answer, cite it by name and date, and say it is a forecast. The EIA Short-Term Energy Outlook is the usual choice and is explicit about its own uncertainty.

Ask how far the price would have to move to flip the answer

This is the part you can actually compute, and it turns an argument about the future into arithmetic about the present. Every state page gives the current electricity to gas price ratio and the breakeven ratio for the equipment. The gap between them is your margin of safety.

• A state where gas wins by 60% needs an enormous price move to flip. Selling a heat pump there on running cost alone is selling something the numbers do not support.
• A state inside 10% could flip on a single unusual winter, in either direction. Say so.

The breakeven figure for every state against all three fuels is here, and it is the same arithmetic in a form you can quote.

The biggest variable is you, not the equipment

This is the uncomfortable part and it is also the strongest finding on this site.

Across 21 households with enough published detail to normalise, the spread between the best and worst is a factor of 12, in climates with near-identical heating degree days. Households with no identified fault sit in a narrow band. Every household above it had a specific cause, and the causes are commissioning rather than equipment: a compressor lockout left at a factory default, a thermostat energising resistance strips unnecessarily, a system sized for a load it never sees.

This site also paid for a Manual J after two contractors offered confident equipment recommendations for a house without doing one. [ACCA Manual J] The measured load came in well under what had been proposed. The whole exchange is written up, including the parts that reflect badly on this site's own assumptions.

The three professionals asked the same balance point question gave three different answers, two of them roughly twenty degrees apart, and none of them asked what the customer paid for fuel. That question has a computable answer.

Using any of this in front of a customer

Everything here is free to reuse. The computed figures are published under CC BY 4.0, so you can put them in a proposal, a slide or a leave-behind with attribution.

• The whole dataset as CSV and JSON, if you want to build your own sheet from it.
• A page per state, with all four fuels, that you can send a customer before a visit.
• The methodology, so a customer who wants to check the arithmetic can.
• The corrections log, which is what to point at when somebody asks why they should believe a website.

Two things to be careful with. The figures are state averages, and the utility your customer is actually on can differ from the state mean substantially, so use their bill where you have it. And every figure here is running cost only: no equipment, no install, no rebates, no panel upgrade.

Who this page is for, and who it is not

It is for you if you install, sell or specify heating equipment and you want the running cost side defensible before you say it out loud.

It is not for you if you are a homeowner deciding for your own house. The same numbers are laid out for that, without the sales framing, on the gas furnace comparison and the page for a furnace that has just died.

It is also not a lead source. This site sells nothing, takes nothing from manufacturers or installers, and does not list, rank or refer contractors. There is no directory here and no plan to build one.

How this was checked

The state counts and margins are computed on every build from EIA residential prices for December 2025 to February 2026, using the same data file as the state pages, so this page cannot drift out of step with them. The inputs and the outputs are both downloadable.

The commissioning material is first-hand: three contractors were asked the same question on the record and a Manual J was commissioned and paid for. The household spread comes from 21 homes whose occupants published their own figures, normalised per square foot per heating degree day, with nothing estimated on their behalf.

What this page does not cover

Any forecast of fuel prices. Deliberately. See the section above.

Equipment, installation and labour cost, which you know better than this site does.

Rebates, tax credits and utility programmes, which vary by state, utility and year.

Sizing and load calculation. This site models running cost, not capacity. A Manual J is not optional and nothing here replaces one.

Anything about your market. Margins, close rates and what customers in your area will actually pay for are outside what public price data can say.

References

1. U.S. Energy Information Administration. Electricity Data Browser, retail sales and average price by state and sector, monthly. Series accessed through the EIA Open Data API v2.
2. U.S. Energy Information Administration. Natural Gas Prices, residential price by state, monthly, dollars per thousand cubic feet. Series accessed through the EIA Open Data API v2.
3. U.S. Energy Information Administration. Short-Term Energy Outlook, heating degree days by census division, prior ten year average series. Accessed through the EIA Open Data API v2.
4. Air Conditioning Contractors of America. Manual J: Residential Load Calculation, the standard method for sizing residential heating and cooling equipment.
5. ASHRAE Cold Climate Conference 2023 paper on heat pump oversizing and seasonal efficiency, cited by the Indiana homeowner in support of deliberate oversizing for a non cold climate unit.
6. Air-Conditioning, Heating, and Refrigeration Institute. AHRI Standard 210/240-2023: Performance Rating of Unitary Air-Conditioning and Air-Source Heat Pump Equipment. This standard defines the M1 test procedure and the HSPF2 metric.
7. Mendon, V., Keene, K., Rosenberg, S., Rotondo, J. A., Nwe, K., Young, J., Wind, W., and Goetzler, B. (2025). Performance Results from DOE Cold Climate Heat Pump Challenge Field Validation. PNNL-37127. Pacific Northwest National Laboratory, prepared for the U.S. Department of Energy under Contract DE-AC05-76RL01830. January 2025.
8. Winkler, J. and Ramaraj, S. (2023). Field Validation of Air-Source Heat Pumps for Cold Climates. NREL/TP-5500-84745. National Renewable Energy Laboratory. May 2023.