On running cost alone, a natural gas furnace beats a heat pump in Vermont: $17.89 per million Btu of delivered heat against $29.57, based on U.S. Energy Information Administration (EIA) residential prices. Both look good next to baseboard electric heat. The answer can still flip depending on whether gas reaches your street, whether you want air conditioning, and how cold your town gets.
The short answer for Vermont
A Btu is a unit of heat, and a million of them is a convenient yardstick, the way price per ounce lets you compare a jar of peanut butter with a bigger one. One kilowatt-hour of electricity carries 3,412 Btu, and a cubic foot of natural gas carries about 1,037 Btu, according to EIA conversions. Dividing each fuel’s price by the heat it actually delivers puts them on the same footing.
Run that math with average Vermont residential prices and the ENERGY STAR efficiency levels, and the ranking is clear. A 97% AFUE gas furnace delivers a million Btu for $17.89. A heat pump at 8.1 HSPF2 (seasonal COP of about 2.4) delivers it for $29.57. Electric baseboard, at 100% efficiency, costs $70.19. The furnace comes out $11.68 per million Btu cheaper than the heat pump, while the heat pump costs far less than half of what baseboard does.
These are running costs for the same unit of heat, computed from EIA prices. They are not a yearly bill, because a yearly bill depends on your house, its insulation and how warm you keep it. They are also not the price of buying and installing the equipment. If you already have gas service, the furnace is cheaper to run; if you are replacing baseboard or electric heat, the heat pump is the clear winner.
That is the baseline. The sections below cover what pushes it around.
What each option costs to run in Vermont
| System | Efficiency used | Cost per million Btu delivered |
|---|---|---|
| Natural gas furnace | 97% AFUE | $17.89 |
| Heat pump | 8.1 HSPF2 (seasonal COP about 2.4) | $29.57 |
| Electric resistance (baseboard) | 100% | $70.19 |
The electricity side of the table rests on 23.95 cents per kWh, the average residential price in Vermont for the year to date through July, from the EIA’s Electric Power Monthly (Table 5.6.B). That is a statewide average. Your utility and rate plan may land above or below it, so use it to compare fuels, not to predict a bill.
The gas figure comes from the EIA’s average residential natural gas price for the state, converted at about 1,037 Btu per cubic foot. This article does not quote that raw gas price, so check your own rate with your local utility and see whether it moves the result. A big enough difference could narrow or widen the $11.68 gap.
Efficiency matters as much as the price of the fuel, and the table shows why. A furnace at 97% AFUE turns nearly all of its fuel into house heat. Baseboard turns every kilowatt-hour into exactly one kilowatt-hour of heat, no more. A heat pump moves heat from outdoor air instead of making it, so each unit of electricity brings roughly 2.4 units of heat indoors across a season. That multiplier is why a fuel as pricey as Vermont electricity can still beat baseboard so decisively.
The 8.1 in the table is the ENERGY STAR minimum for ducted and single-package heat pumps. ENERGY STAR asks for 8.5 HSPF2 from non-ducted (ductless) split systems, because they avoid duct losses and have to be better to earn the same label. A ductless unit that merely meets the label will cost somewhat less to run than the table shows. What HSPF2 Measures, and Why Ductless Asks for More explains how to compare two ratings fairly. When you compare models, compare HSPF2 to HSPF2, since SEER2 only measures cooling.
How cold it gets, and what that does to a heat pump
Burlington, the reference station here, records about 6,960 heating degree days a year (base 65°F), per NOAA’s 1991-2020 Climate Normals. Heating degree days add up, for every day of the year, how far the average temperature sat below 65°F. Twice the degree days means roughly twice the fuel for the same house, so this number is what turns a climate into a heating bill. A long season of steady cold, which describes Vermont, is demanding on any system.
The coldest month at the same station has a mean daily minimum of 12.9°F. That is an average of the nightly lows, not a record, so some nights will be colder. And Burlington is one station. A town in the Green Mountains or the Northeast Kingdom can run well below it.
Here is where the $29.57 needs an asterisk. It uses a seasonal efficiency, an average over the whole heating season. A heat pump’s efficiency drops in deep cold, so on the coldest nights it uses more electricity per unit of heat than the average suggests. Backup heat, either electric resistance strips or a furnace, carries the load when the outdoor unit can’t keep up. Those hours are billed at resistance rates, which is the $70.19 end of the table. The gap with gas likely runs wider in January than the seasonal averages show, and narrower in October and April.
Cold-climate heat pumps hold their output better than basic models, but the details vary by model and by house. How Cold Is Too Cold for a Heat Pump goes through how output changes as temperatures fall. Treat $29.57 as a seasonal average, and plan on a backup for the coldest nights.
What homes in Vermont already heat with
The EIA’s 2020 Residential Energy Consumption Survey (RECS) shows what Vermont homes actually use, and the picture is very different from a gas-heavy state. By equipment, 51% of homes have a furnace and 25% a steam or hot-water boiler. By main fuel, 46% use fuel oil or kerosene, 21% natural gas, 13% propane and 6% electricity. For central heat pumps the survey does not publish a figure, because the estimate was suppressed as unreliable. That is not the same as none.
Those shares describe what was installed, which says which fuel looked affordable when the houses were built. They are not a recommendation, and they are statewide shares from a national survey, not a count for your county.
Still, they change the question. With only about one home in five on natural gas, most Vermont households cannot choose the $17.89 option without a gas line extension. For them the real comparison is a heat pump against oil, propane or baseboard, and oil and propane prices are not in the figures used here. Get current delivered-fuel quotes and set them against the heat pump line in the table.
Boiler homes face a different conversion. With radiators and no ductwork, a heat pump has nothing to push air through, which is where ductless units come in. Ductless or Central covers that trade-off. For a wider view of how fuels, equipment and winters fit together, see Heating a Home in Vermont. If your home has no gas line, the $17.89 figure is not on your menu, so price oil or propane against the heat pump instead.
When the other choice wins
The cheaper-to-run system is not automatically the right one. A few situations reverse the call, starting with the simplest: no gas service. A furnace that costs $17.89 per million Btu is no bargain if the pipe has to be run to your house, and that cost is outside the running figures here.
Cooling is the second. Burlington averages about 656 cooling degree days a year, a modest number next to the heating load but not zero. A heat pump also air-conditions, and ENERGY STAR sets a floor of 15.2 SEER2 for the cooling side. If you would otherwise buy a separate air conditioner, one machine doing both jobs shifts the math toward the heat pump, even though gas wins on heating cost alone.
The third is a dual-fuel setup: a heat pump handles the milder stretches and a gas furnace takes over when the cold deepens. That puts each system where it is cheapest, and the furnace covers the nights when heat pump efficiency sags. It costs more to install and maintain two systems, so it fits best where gas is already in place and summer cooling matters.
The last is a working furnace with years left. Running cost is only half of any replacement decision, and an efficient furnace that still works can be the cheapest option of all. If yours is aging or failing, Repairing a Furnace or Replacing It lays out how to weigh the repair against a new system. Keep a sound furnace running, and move to a heat pump when you need cooling or the furnace reaches the end of its life.
Common questions
Is a heat pump cheaper to run than electric baseboard in Vermont?
Yes. At Vermont’s average residential electricity prices, delivering a million Btu costs $29.57 with a heat pump at 8.1 HSPF2, against $70.19 with baseboard. The heat pump moves heat instead of just making it.
Does the $17.89 or $29.57 figure equal my yearly heating bill?
No. Those figures compare fuels on the same unit of delivered heat. Your annual bill depends on house size, insulation, thermostat habits and local rates, so use the figures to rank options, not to budget.
Will a heat pump keep my house warm on the coldest Vermont nights?
Often, but efficiency drops in deep cold, and most installations rely on backup heat for the coldest stretches. Burlington’s coldest month averages a daily low of 12.9°F, and colder towns run lower.
Do most Vermont homes have access to natural gas?
Not by the survey numbers. RECS 2020 lists natural gas as the main fuel for 21% of Vermont homes, against 46% for fuel oil or kerosene. Check with your utility whether service reaches your address.