Furnace vs. Heat Pump: Key Differences

While heat pumps and furnaces are both efficient ways to heat your home, they couldn’t be more different. Each is unique in its capabilities such as energy efficiency, heating potential, and cost. That’s what makes the age-old furnace vs. heat pump debate so engaging.

How They Work

There are two types of household furnaces: one runs on oil, and the other on gas. Heat pumps, on the other hand, draw heat from the outside air and circulate it indoors. Heat pumps tend to produce less heat than gas or oil furnaces, so it’s a better choice for those who live in warmer climates. Heat pumps can also provide your home with warm and cool air, making them more versatile than furnaces. 


Both heat pumps and furnaces will benefit in the long-term from regular maintenance. It’s best to consult a professional when doing maintenance, but some minor replacements are safe to perform on your own. For example, both systems contain air filters that you can easily replace. A heat pump typically consists of a pairing of one internal unit with an external unit. However, most furnaces only contain one central unit. It’s important that every unit be serviced when required.

Energy Efficiency

The furnace vs. heat pump energy argument can get complicated depending on where you reside. Heat pumps are technically more efficient since they transfer more energy than they use. However, in colder climates, 95% efficient gas furnaces tend to fare better. Another factor to consider is the overall cost of natural gas over some time. Gas is cheaper in certain areas, so it comes down to location. 


Generating heat for your entire household requires a lot of fuel, which in turn makes them expensive to operate. The amount of fuel and power you use depends on your climate, local utility costs, and your unit’s efficiency. The average operating cost for a natural gas furnace is $1,550, while an oil furnace will run you around $1,000-$1,750 to power annually. In contrast, the average heat pump will cost you $300-$500 to operate. These costs can vary drastically from location to location, so it’s best to get an opinion from a professional who is familiar with your area.

Heating & Cooling Professionals That Do It All

Whether you choose to install a furnace or heat pump in your home, our expert technicians at ALLRED are here to help get the job done right. Our team is dedicated to providing every customer with top-of-the-line service, and an installation that’s done right the first time. Make the right choice for your home’s HVAC system by scheduling an appointment with an ALLRED technician.