Heat Pump Vs. Electric Or Gas Heat: Which Is Cheaper To Run?

For decades, gas, oil, and electric heaters have been the primary heat source options for Pennsylvania homes. Over the last 20 years, however, heat pumps have become much more popular.

They’re cheaper to run than gas, electric, or oil heat. They often provide better comfort. They can replace central air conditioners, too.


As a product manager at the HVAC distributor Pierce-Phelps for over a decade, I understand how heat pumps and furnaces have changed over the years. In this article, we’ll look at the costs and efficiency of heat pumps, electric heat, and gas heat.

If you’d like to learn more about how a system like this can help lower your monthly expenses, use our dealer locator to set up a free consultation with certified HVAC contractor near you.


Is A Heat Pump Electric Or Gas Heat?

Heat pumps are technically electric heat and not gas heat. But, unlike baseboard heaters or heat strips, they don’t generate heat. Instead, they draw ambient heat from outside, use a compressor to amplify, and use that thermal energy for heating. It only needs electricity to power the components and circulate refrigerant.

Installation Costs: Heat Pump Vs. Furnace

The installation costs of a ducted heat pump system and furnace with AC are around the same. In both cases, high-end models with better energy efficiency cost more. Mini splits, which use heat pumps and air handlers in different rooms, cost much more than traditional furnaces.

Ducted heat pump systems have an outdoor unit for heat transfer. Then, an indoor unit hooks up to your ductwork and vents just like a furnace. These also serve as air conditioning for cooling in the summer.

They often require a permit for installation, which is the same as any permanently-installed HVAC system.

The difference is that they don’t burn fossil fuels while in heating mode. That’s why oil, gas, and traditional electric cost more to run: They use combustion, not heat transfer, to warm the indoor air.

Converting Oil Furnace To An Electric Heat Pump

If you currently have an oil furnace in your home, converting to a heat pump can be a cost-effective way to improve your heating and cooling system. You’ll also reduce your carbon footprint by using a cleaner energy source.

You can install ductwork if your home doesn’t have it already, but that gets expensive and requires a lot of work. Another option is a mini split heat pump system.

It uses small, flexible lines running through the walls instead of ducts and vents.

Energy Efficiency: Heat Pump Vs. Electric Heat Vs. Gas Heat

When it comes to energy efficiency, heat pumps are typically the most efficient type of heating system. They don’t generate heat; they simply move it from the air outside your home to the inside. This makes them an excellent choice for homeowners looking to reduce their energy bills.

There are some exceptions, and we’ll cover those in this section.

Is A Heat Pump Cheaper Than Electric Heat?

Heat pumps are generally more energy efficient than traditional electric heat systems. They also provide cooling, something electric baseboards can’t do.

However, some ducted heat pumps rely on electric heating strips when it’s really cold out. Today’s most robust heat pumps can work in sub-zero temperatures. Less-expensive models have electric resistant heat as a backup to heat the home.

In those cases, you end up paying more for “regular” electric heat in the winter. But, if you can make the more significant upfront investment in a model made for the winter, you’ll save more money on heating costs over time.

Is A Heat Pump Cheaper Than Gas Heat?

Heat pumps are often cheaper to run than gas heat. Once again, ensure your model is strong enough for the coldest winter temperatures. Our area rarely goes below 10 degrees. Most models today are rated for temps as low as negative 20 degrees Fahrenheit.

Year-Round Comfort Replacing Central Air With A Heat Pump

Heat pumps and air conditioners are actually very much alike! In the summer, both work by drawing warm air from a room, cooling it, and recirculating it while also dehumidifying.

So, you can get rid of your window ACs or replace your central air. A heat pump does the job year-round. And, with inverter technology, they have better temperature control than traditional systems.

Debunking Four Heat Pump Myths

Several misconceptions about heat pumps can prevent homeowners from considering this type of heating system. Below, we will discuss the four most common myths and provide the truth behind each.


Heat Pumps are Only Suitable for Mild Climates


That was true in the early 2000s. Today’s strongest models work even when it’s below zero, making them excellent for cold climates. Other models use auxiliary heating elements that provide additional warmth in severe conditions.


Heat Pumps Only Provide Heating and Not Cooling


One of the most significant advantages of a heat pump is its ability to both heat and cool your home. This makes it a versatile option for year-round, energy-efficient comfort.


Heat Pumps are More Expensive to Run Than Gas Furnaces or Electric Heat.


The upfront cost of a heat pump may be higher than other heating systems. But, it is more energy efficient, meaning it’s cheaper to run than a gas furnace or electric resistant heat in the winter. 

Since they require very little electricity, the cost to run them can be little or even nothing if you have access to renewable energy sources like solar power.


Heat Pumps are Complex and Difficult to Maintain


Heat pumps have more components than traditional gas furnaces. But, a professional HVAC technician can service them just as easily as a conventional system.

The most important part of maintaining your heat pump is to have it serviced regularly, just as you would with any other type of heating system.

Are you ready to learn more about heat pump installation in Cherry Hill, NJ or anywhere in New Jersey, Pennsylvania, Delaware, or Maryland? You can use our dealer locater to set up a free consultation with a reliable, certified contractor.