A 95% AFUE gas furnace costs a hair less to run than a heat pump in Texas, and the gap is too small to decide anything. Winters here are short and mild, so the heat pump stays in its efficient range most of the season. The real choice comes down to three questions. Is there a gas line? Does the house need cooling? What is already installed?
The short answer for Texas
Run the numbers on the same unit of heat and the two systems land almost on top of each other. Using average Texas residential prices from the U.S. Energy Information Administration (EIA) and ENERGY STAR efficiencies, a gas furnace at 95% AFUE delivers a million Btu of heat for $19.71. A heat pump at 8.1 HSPF2, a seasonal COP of about 2.4, delivers the same million Btu for $19.83. The furnace comes out $0.12 cheaper per million Btu. That is twelve cents on a base near twenty dollars.
Electric resistance heat, such as baseboard heaters or an electric furnace’s coils, is the outlier at $47.07 per million Btu. It costs more than twice as much as either of the other two. Whichever way you lean, resistance heat is the option to avoid if you have a choice.
Two caveats about what these numbers are. They are a running cost for the same unit of delivered heat, not a yearly bill, because a bill depends on the size of the house, the insulation, the thermostat habits and the rate plan. They are also not the price of the equipment, installation or ductwork, which often matters more than twelve cents.
On running cost alone, treat the gas furnace and the heat pump as a tie, and let the gas line, the cooling load and the equipment you already own make the call.
What each option costs to run in Texas
| System | Efficiency used | Cost per million Btu delivered |
|---|---|---|
| Natural gas furnace | 95% AFUE | $19.71 |
| Heat pump | 8.1 HSPF2 (seasonal COP about 2.4) | $19.83 |
| Electric resistance (baseboard) | 100% efficient | $47.07 |
The electricity side of the table uses the EIA’s average residential price of 16.06 cents per kWh, a year-to-date figure through July 2026 from its Electric Power Monthly. That is a statewide average, so your utility and rate plan will differ. Electricity converts at 3,412 Btu per kWh. The gas side starts from the EIA’s 2025 annual average residential natural gas price for Texas ($19.42 per thousand cubic feet), converted at about 1,037 Btu per cubic foot. That is a different period from the 2026 electricity figure, and Texas monthly gas prices in 2026 have run above the 2025 average, so the gap could narrow or flip. To test your own situation, run the same math with the rates on your bills.
Why does efficiency matter as much as the price of the fuel?
Because a price per kWh and a price per cubic foot measure different things, and neither is the heat in your living room. A furnace turns about 95% of its gas into heat. Resistance heat turns 100% of the electricity into heat, but electricity is the pricier fuel per Btu, which is why baseboard lands at $47.07. A heat pump moves heat instead of making it, delivering roughly 2.4 units of heat for every unit of electricity over a season, and that multiplier erases the fuel-price gap.
The heat pump in the table sits at the ENERGY STAR cold-climate minimum for a ducted system (8.1 HSPF2). The standard ENERGY STAR minimum for a split system is lower, at 7.8 HSPF2, so a unit that only meets the standard label could cost more to run than the table shows. A unit rated above that minimum uses less energy for the same heat, so it can narrow the gap shown in the table. What HSPF2 Measures, and Why Ductless Asks for More explains the rating in detail. Compare fuels on cost per million Btu delivered, after efficiency, never on the price per kWh or per cubic foot alone.
How cold it gets, and what that does to a heat pump
Not very. At Houston Intercontinental Airport, the 1991-2020 normals from NOAA show about 1,266 heating degree days a year (base 65 F). Each degree day counts how far a day’s mean temperature sat below 65 F, so the total is a rough measure of how much heat a house needs. The same station logs about 3,288 cooling degree days, well over twice the heating figure. The mean daily minimum in the coldest month is 43.7°F, which is cool but a long way above freezing.
Those numbers describe a short, mild heating season. For the same house, heating fuel use scales roughly with heating degree days, and Chicago and Minneapolis have several times Houston’s total, so a Houston-area home burns or draws far less heating energy than one there. It also keeps a heat pump close to the conditions where its efficiency is best.
The 2.4 seasonal COP in the table is an average across the whole season. On the coldest nights, a heat pump’s efficiency drops, and a backup carries the load. That backup is usually electric resistance strips built into the air handler, or a gas furnace in a dual-fuel setup. In a climate like Houston’s, those nights are few. How Cold Is Too Cold for a Heat Pump covers where performance falls off and how to size for it.
Keep in mind that this is one station on the Gulf Coast. A mean minimum is an average, so individual nights run colder. Colder parts of the state run colder still, and in those places the seasonal 2.4 is harder to hold. Where winters look like Houston’s, expect the heat pump to rarely leave its efficient range, and pick the system on cooling and installation rather than on cold-weather fear.
What homes in Texas already heat with
Electricity is the leading heating fuel in the state, at 51% of homes in the EIA’s 2020 Residential Energy Consumption Survey. Natural gas serves 42%, and propane 2%. On equipment, 61% of homes use a furnace (which can burn gas or run on electric coils) and 19% use a central heat pump. For a broader look at the options, see Heating a Home in Texas.
Those shares show what was installed, which tracks which fuel was cheap or convenient when each house was built. They are not a recommendation. They do tell you the typical Texas house is not a boiler-and-radiator house. The survey’s estimate for steam or hot-water boilers was suppressed as unreliable, so there is no share to quote, and that is not the same as none. For fuel oil or kerosene, the survey’s Texas sample had no households reporting it as a main heating fuel.
The two cases that change the comparison are a house with no gas line and a house with a boiler. Without gas service, the real contest is the heat pump against electric resistance, at $19.83 versus $47.07 per million Btu, and the heat pump wins by a wide margin. A boiler house is a different conversion altogether. There are no ducts to reuse, so a ducted heat pump means new ductwork, while a ductless system can serve rooms without it. Ductless or Central walks through that choice. If the house has no gas line, compare the heat pump with resistance heat only, because the furnace is not on the table.
When the other choice wins
The furnace is the cheaper one to run by $0.12 per million Btu, and the heat pump wins anyway in several common situations.
- No gas service at the house, or a gas line that would cost a lot to extend.
- A cooling system that needs replacing, since a heat pump does both jobs.
- A wish to keep the whole house on one fuel and one bill.
Cooling is often the biggest of these in Texas. With about 3,288 cooling degree days at the Houston station, most homes here run air conditioning hard. A heat pump heats and cools from one outdoor unit, while a gas furnace still needs a separate air conditioner. ENERGY STAR sets a minimum of 15.2 SEER2 for cooling on air-source heat pumps. SEER2 rates cooling and HSPF2 rates heating, so compare the same letter across units. When a central air conditioner is failing anyway, replace it with a heat pump, because the heating side costs about the same to run as gas.
The furnace wins in other cases. An existing gas furnace in good shape, with ducts that already work, is hard to beat on total cost, since the saving from swapping is twelve cents against the price of a new system. Repairing a Furnace or Replacing It lays out how to judge a system with years left. In the colder parts of the state, a dual-fuel setup pairs a heat pump with a gas furnace. The heat pump handles the mild days, and the furnace takes over when the temperature falls far enough that the heat pump’s efficiency sags.
Common questions
Is a heat pump cheaper to run than electric baseboard in Texas?
Yes, by a wide margin. At average residential prices, a heat pump at 8.1 HSPF2 delivers a million Btu for $19.83, against $47.07 for electric resistance. The heat pump gets its edge from moving heat rather than making it.
Can a heat pump handle a Texas cold snap?
It can, with help. Efficiency falls in deep cold, and a backup (resistance strips or a gas furnace) carries the coldest nights. Where the coldest month’s mean low is 43.7°F, as at the Houston station, those nights are the exception, though a colder part of the state has more of them.
Why does ENERGY STAR’s cold-climate designation ask 8.5 HSPF2 of ductless systems and 8.1 of ducted ones?
Those are the minimums for ENERGY STAR’s cold-climate heat pump designation, and the ductless bar is the higher one. The standard ENERGY STAR minimum for split systems is 7.8 HSPF2. A particular unit can rate well above any of these minimums.
Should I replace a working gas furnace with a heat pump to save money?
On running cost alone, no. The furnace is $0.12 per million Btu cheaper, so the swap does not pay back through the heating bill. The case for it rests on cooling, on losing the gas connection, or on a system that is near the end of its life.
Sources: eia.gov | energystar.gov