Cost of Owning

Heat Pump Payback Calculator

Test whether a heat pump lowers your heating costs using local prices and seasonal performance. Savings can be positive, zero or negative.

Updated October 25, 2026 · Free · No sign-up

Compare the same amount of delivered heat

Defaults are illustrative inputs. Enter the heating-only, usage-based part of your bill; exclude fixed charges you will still pay.

Simple heating-cost payback
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Budget lineAnnual / upfront amount

Test seasonal performance

Same tariffs and backup share, different COP assumptions. These are sensitivity tests, not predicted outcomes.

Seasonal COPAnnual savingPayback

This heating-only model holds heat demand and tariffs constant. It excludes financing, cooling savings, equipment aging and future fuel prices. Dual-fuel gas/oil backup requires a separate model; the backup input here is electric resistance only.

Correction to the previous calculator

October 25, 2026: removed fixed assumed savings of 35–60% and an automatic 35% AC cost offset. Those assumptions could show payback even when a heat pump costs more to run. The revised calculation compares equal delivered heat and uses an entered replacement quote.

Reproduce the calculation

  1. Delivered heat in kWh = heating fuel cost ÷ price per fuel unit × kWh per fuel unit × existing efficiency.
  2. Electricity needed = delivered heat × [(1 − backup share) ÷ seasonal COP + backup share]. Resistance backup has COP 1.
  3. Annual saving = existing heating fuel cost − new electricity cost − extra maintenance.
  4. Simple payback = max(0, installed quote − confirmed incentives − replacement cost avoided now) ÷ annual saving. If savings are zero or negative, there is no savings-based payback.

A case where the answer changes

Illustrative inputs: $1,200 of gas at $1.50/therm, a 90%-efficient furnace, COP 3, no backup and no maintenance difference. The existing system delivers about 21,102 kWh of heat. A heat pump needs about 7,034 kWh of electricity. At 10¢/kWh that costs about $703 and saves $497; at 25¢ it costs about $1,758 and increases costs by $558. The equipment is identical; the local tariff changes the result.

Sources and boundaries

EIA energy conversions supply 3,412 Btu/kWh, 100,000 Btu/therm, 138,500 Btu per gallon of heating oil and 91,452 Btu per gallon of propane. The annual heat-load, tariff and COP approach is described in the DOE-hosted CEE heat-pump design training. These sources do not supply the default prices, quote or performance; defaults are editable scenarios.

Use only the space-heating portion of fuel bills. A gas account may still be needed for cooking or hot water, so its fixed charge may remain. This is a simple, constant-price heating comparison, excluding cooling, financing and equipment replacement timing. Check incentives with the administering program before including them.

Continue with how backup heat affects a setback decision and the contractor scope worksheet when comparing installation quotes.

Use this result in your decision

Compare the extra installed cost with a credible alternative, then test cold-weather efficiency and fuel prices. A payback longer than your intended holding period deserves a different budget comparison.

Frequently asked questions

Can a heat pump cost more than gas to run?
Yes. Compare the same delivered heat at your fuel tariff, furnace efficiency, electricity tariff and seasonal COP. High electricity prices or low seasonal performance can eliminate savings. The calculator shows that outcome rather than assuming a fixed saving.
What COP should I enter?
Use an installer energy model or measured seasonal performance for your climate and system. A test-point COP at one outdoor temperature is not a seasonal average. Test lower performance and resistance backup before relying on payback.
Can I count an avoided AC purchase?
Only enter a real replacement purchase you would otherwise make now, with comparable scope. Do not subtract a percentage automatically or include an AC replacement years away as if it were an immediate saving.
Does this calculate dual-fuel operation?
No. The backup field models electric resistance heat at COP 1. Gas or oil backup, temperature-dependent fuel switching and time-of-use tariffs need a more detailed model.