Calculator
Heat Pump Cost & Savings Calculator
Estimate heat pump install cost, annual heating cost, and savings vs your current fuel
Air-source heat pumps are the most common home electrification upgrade — they replace a furnace or boiler and can also provide air conditioning. This calculator sizes a heat pump for your home based on climate region and square footage, then estimates annual heating costs and compares them against your current system. You choose the fuel (natural gas, heating oil, propane, or electric resistance), adjust fuel and electricity prices, and get a side-by-side operating cost comparison with payback on the installation investment. Because federal residential heat pump credits (Section 25C) expired at the end of 2025, the calculator does not apply a federal credit by default for 2026+ projects. State, utility, or manufacturer rebates may still be available — check DSIRE or your state energy office for current programs.
Policy status
Heat pump federal incentive policy status
Federal residential clean energy credit assumptions now depend on the project year. RenewableCalc does not automatically apply a 30% federal residential credit to 2026+ projects; verify current IRS rules, tax eligibility, utility programs, and local incentives before treating an estimate as final.
Policy last reviewed: 2026-06-09 · Source label: IRS Residential Clean Energy Credit and current federal incentive guidance.
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Start with the required inputs. Open advanced assumptions when you have a quote or utility details.
Fill in the form and click Calculate to see results.
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Your heat pump savings depend on your state's fuel mix, electricity rates, and climate.
How to Use This Calculator
Start with your home's square footage — this drives the design heating load using climate-adjusted BTU/sqft constants. Select your climate region: Warm (Gulf Coast, Florida), Moderate (Mid-Atlantic, Southeast), Cold (Northeast, Midwest), or Very Cold (Upper Midwest, Northern New England).
Choose your current heating fuel — natural gas, heating oil, propane, or electric resistance. Enter your current fuel price in the appropriate units ($/therm for gas, $/gal for oil and propane, or $/kWh for electric resistance). If you're on natural gas or oil/propane, adjust the AFUE efficiency slider to match your furnace or boiler (0.90 is typical for a modern unit).
Enter your marginal electricity rate from your utility bill — this is what the heat pump will run on. Adjust HSPF if you know your target model's rating (default 9 is typical; cold-climate units can reach 12-14). Set the installation cost based on quotes in your area — $4,000-$18,000 is typical for an air-source system.
The results show annual operating costs for both systems, savings, payback period, and a recommended capacity in tons. Use the verdict panel to understand whether the numbers favor a switch at current prices. For a deeper analysis, pair this with the Geothermal Sizing calculator if you are considering ground-source options, or the Energy Consumption calculator to model your full heating and cooling load.
Formula & Methodology
Design Heating Load (BTU/hr) = Home Size (sqft) × BTU/sqft factor warm=25 moderate=32 cold=42 very-cold=52 Annual Heating Demand (BTU/yr) = Design Load × Equivalent Full-Load Hours warm=600 moderate=1200 cold=1800 very-cold=2400 Heat Pump Energy (kWh/yr) = Annual Heating BTU / (HSPF × 1000) HSPF = Heating Seasonal Performance Factor (BTU output per Wh input) Heat Pump Operating Cost = Heat Pump kWh × Electricity Rate Current System Cost (by fuel): Natural Gas: (Annual BTU / 100,000 / AFUE) × $/therm Heating Oil: (Annual BTU / 138,500 / AFUE) × $/gal Propane: (Annual BTU / 91,500 / AFUE) × $/gal Elec Resistance: (Annual BTU / 3,412) × $/kWh (COP=1) Annual Savings = Current Cost − Heat Pump Cost Payback (years) = Install Cost / Annual Savings Recommended Tons = Design Load BTU / 12,000 Sources: BTU/sqft and EFLH constants from ASHRAE climate zone references and residential HVAC design practice. HSPF is a US DOE rating standard — higher values mean better cold-weather efficiency. The formula does not include cooling cost, backup resistance heat, or ductwork modifications; treat results as heating-only planning estimates.