Heat Pump Savings Calculator

How the calculation works

The calculator works out how much useful heat your current system delivers in a year. Then it asks how much electricity a heat pump would need to deliver that same heat. Both costs use the prices you enter.

Useful heat (BTU)      = fuel used × BTU per unit × current efficiency (AFUE)
Heat pump COP          = HSPF2 ÷ 3.412 × winter factor
Heat pump kWh          = useful heat ÷ (COP × 3,412)
Current cost           = fuel used × fuel price
Heat pump cost         = heat pump kWh × electricity price
Yearly savings         = current cost − heat pump cost
Simple payback (years) = heat pump cost after rebates ÷ yearly savings

The constants:

• Energy content per unit comes from the U.S. Energy Information Administration (EIA): 100,000 BTU per therm of natural gas, 91,452 BTU per gallon of propane, and 3,412 BTU per kWh. The tool uses 137,381 BTU per gallon for heating oil, slightly below the 138,500 BTU rounded figure on EIA’s explainer page; the difference is under 1%.
• COP (coefficient of performance) is the heat delivered divided by the electricity used. HSPF2 is in BTU per watt-hour, so dividing by 3.412 turns it into a seasonal COP.
• Winter factor nudges the COP for climate: 1.05 for mild winters, 1.0 for moderate, 0.85 for cold and 0.75 for very cold. Heat pumps lose efficiency as it gets colder, and HSPF2 is rated for a single reference climate. These factors are simple planning adjustments, not measured values for your home.
• Default prices are dated EIA averages: electricity 18.31¢ per kWh (U.S. residential, July 2026), natural gas about $1.35 per therm (U.S. residential, January 2026, $13.96 per thousand cubic feet), propane $2.638 and heating oil $6.138 per gallon (residential, week of October 12, 2026, before taxes).

The tool assumes the heat pump covers the whole heating load, with no backup resistance heat counted separately, and that your house needs the same amount of heat afterward.

Worked example

The default case is a propane-heated home in a moderate climate.

1. The home burns 700 gallons of propane a year for heat at $2.64 a gallon, in an 85% AFUE furnace.
2. Current heating cost: $1,848 a year.
3. The heat pump is rated 8.1 HSPF2. In a moderate climate the tool uses a seasonal COP of 2.37.
4. Delivering the same heat would take 6,718 kWh of electricity. At $0.18 per kWh, that is $1,209 a year.
5. Estimated yearly savings: $639.
6. With a heat pump cost of $12,000 after rebates, simple payback is 18.8 years.

A second example

Now take a heating-oil home in a cold Northeast climate. It uses 600 gallons a year at $6.14 a gallon in an 83% AFUE boiler, and the quote is for an 8.5 HSPF2 heat pump at the same $12,000.

• Current heating cost: $3,684 a year
• Seasonal COP used: 2.12
• Heat pump electricity: 9,469 kWh, costing $1,704
• Estimated savings: $1,980 a year, a simple payback of 6.1 years

For contrast, a home burning 600 therms of natural gas at $1.35 in a 90% furnace, with the default 8.1 HSPF2 heat pump in a moderate climate, shows a heat pump cost of $1,200 against $810 today. That is about $390 more per year to run. Fuel price matters more than anything else in this calculator.

What your result means

A positive savings number means the heat pump should cost less to run for heating at the prices you entered. A negative number means it would cost more. Neither tells you whether you will be comfortable, so treat the result as one input next to a contractor’s load calculation.

The payback figure is only as good as the cost you enter. If your furnace or air conditioner is near the end of its life, enter the extra cost of a heat pump over a standard replacement, not the full price. Payback then often drops a lot. Our heat pump cost and savings guide explains how quotes are built and what drives price. To test a range of energy prices over the system’s life, use the energy efficiency payback calculator.

To see the price per unit of heat for each fuel at your own rates, try the heating fuel cost comparison calculator.

Climate, rates and incentives that change the answer

Climate. In colder places, a heat pump works harder and may lean on backup heat on the coldest nights. Choose a model listed for cold climates if you live in the northern states. ENERGY STAR’s cold-climate criteria require a COP of at least 1.75 at 5°F. Our guide to heat pumps in cold climates covers backup heat and defrost in plain terms.

Electricity rates. Some utilities offer lower winter rates or special rates for homes with heat pumps. Others charge more per kWh above a monthly threshold. Use the rate you would actually pay on your highest-use winter months.

Federal incentives. The federal 25C tax credit does not apply to heat pumps placed in service after December 31, 2025, according to the IRS. There is no federal tax credit for a heat pump installed in 2026.

State rebates. Federal Home Energy Rebate programs are run by states and are live in only some of them. Under DOE Program Notice 26-2, effective May 29, 2026, these point-of-sale rebates no longer pay for switching from gas, oil or propane to electric. Heat pump rebates are limited to homes that already heat with electricity, or new construction. Check the state-by-state rebate status and your state energy office before you count on any amount.

Common mistakes

• Using the whole year’s gas or propane use, including water heating and cooking, as the heating figure.
• Using the price on a single propane or oil delivery when prices swing through the season.
• Using an HSPF2 for an outdoor unit alone instead of the matched indoor and outdoor system in your quote.
• Choosing “moderate” winters when you live where nights often drop below 10°F.
• Entering the full installed price as the cost when the old system needed replacing anyway.
• Comparing against an old 60% to 70% furnace without checking its real efficiency.

Limits of this calculator

This tool uses a seasonal average efficiency with a simple climate adjustment. It does not model hour-by-hour weather, backup resistance heat, defrost cycles, duct losses, or changes in comfort settings. It ignores fixed monthly charges on gas or electric bills, which you may keep or drop. It does not count cooling, maintenance or the value of replacing two systems with one. Real savings can be higher or lower. This is an educational estimate, not a quote or financial advice. Get at least three written quotes that include a room-by-room load calculation.