Heat Pump vs Central AC: Which Should You Buy?

The Core Difference

Central AC: Cools only. Requires separate heating system (furnace, boiler, electric baseboard).

Heat Pump: Cools AND heats by reversing refrigerant flow. Replaces both AC and furnace in mild/moderate climates.

Before comparing, calculate your cooling needs with our BTU calculator—proper sizing matters for both systems. See our heat pump sizing guide for heating-specific factors.

Cost Comparison: Upfront & Operating

Upfront Equipment & Installation Costs

Central AC Only:

• 2 tons (24,000 BTU): $4,000-5,500
• 2.5 tons (30,000 BTU): $4,800-6,500
• 3 tons (36,000 BTU): $5,500-7,500

Plus furnace: Add $3,000-5,000 for gas furnace, $2,000-4,000 for electric furnace

Heat Pump:

• 2 tons: $5,500-7,500
• 2.5 tons: $6,500-8,500
• 3 tons: $7,500-10,000

Cold climate heat pump: Add $1,000-2,000 for models rated to -15°F to -25°F (needed in Zones 6-7)

Winner: Heat Pump (if replacing both AC + furnace)

Buying a 2.5-ton heat pump ($7,000) vs 2.5-ton AC + gas furnace ($6,000 + $4,000 = $10,000) saves $3,000 upfront. If replacing AC only (keeping existing furnace), AC wins by $1,500-2,500.

Annual Operating Costs (2,000 sq ft home, Zone 4)

AC + Gas Furnace:

• Cooling: 1,400 hrs/yr × 2.5 tons × 16 SEER2 = 2,625 kWh × $0.13 = $341/yr
• Heating: 600 therms × $1.30 = $780/yr
• Total: $1,121/yr

Heat Pump (16 SEER2 / 9.5 HSPF2):

• Cooling: 1,400 hrs × 2.5 tons × 16 SEER2 = 2,625 kWh × $0.13 = $341/yr (same as AC)
• Heating: 70,000,000 BTU ÷ 9.5 HSPF2 ÷ 1,000 = 7,368 kWh × $0.13 = $958/yr
• Total: $1,299/yr

Winner: AC + Gas Furnace (in areas with cheap natural gas)

Gas furnace saves ~$180/year in areas with natural gas under $1.50/therm. But if gas costs >$2/therm or you have electric heat, heat pump saves $200-500/year.

Efficiency Ratings Explained

Cooling Efficiency (Both Use SEER2)

• 14-15 SEER2: Budget tier (minimum legal)
• 16-17 SEER2: Standard efficiency (best value)
• 18-20 SEER2: High efficiency (premium pricing)
• 21+ SEER2: Ultra-efficient (cold-climate or inverter-driven models)

Heat pumps and ACs perform identically for cooling at the same SEER2 rating. Read our SEER2 guide for payback calculations.

Heating Efficiency (Heat Pumps Only)

HSPF2 (Heating Seasonal Performance Factor 2): Measures heating efficiency. Higher = better.

• 8.1 HSPF2: Minimum legal (Northern states)
• 8.5-9.0 HSPF2: Standard heat pumps
• 9.5-10.5 HSPF2: High-efficiency models
• 11+ HSPF2: Cold-climate inverter-driven heat pumps

COP (Coefficient of Performance): Another heating metric showing BTUs delivered per BTU of electricity used. COP of 3.0 = 300% efficient (delivers 3 BTUs heat per 1 BTU electricity).

Gas Furnace Efficiency (for comparison)

• 80% AFUE: Budget furnaces (80% of gas energy becomes heat)
• 92-96% AFUE: Standard efficiency (most common)
• 97-98% AFUE: High-efficiency condensing furnaces

Even 98% AFUE gas furnace is "less efficient" than heat pumps (200-350% efficient), but cheap natural gas makes gas furnaces more cost-effective in cold climates despite lower efficiency.

Climate Suitability: Where Each System Wins

Heat Pumps Excel In:

Zones 1-3 (Mild Winters)

• Locations: South (FL, TX, LA, GA), Southwest (AZ, NV, southern CA), coastal CA, Pacific Northwest
• Why: Rarely drops below 25-30°F; heat pumps operate at peak efficiency all winter
• Payback: 3-7 years compared to AC + electric heat, immediate savings vs AC + furnace (lower upfront cost)

Zone 4 (Moderate Winters)

• Locations: Mid-Atlantic (VA, NC, TN), lower Midwest (KS, MO), northern CA
• Why: 10-30 days below 25°F per winter; modern heat pumps handle this well
• Recommendation: Choose heat pump with cold-climate rating (good to 5°F); backup heat strips for coldest days
• Payback: 5-10 years vs gas furnace, 2-5 years vs electric heat

Zone 5 (Cold Winters) - With Caveats

• Locations: IL, OH, PA, NJ, northern NY, MA
• Requirement: Cold-climate heat pump (rated to -15°F) + backup heat source
• Cost: Cold-climate models cost $7,500-10,000 installed
• Payback: 8-15 years vs gas furnace (marginal), 3-6 years vs electric/propane heat (excellent)

Central AC + Gas Furnace Wins In:

Zones 6-7 (Very Cold Winters)

• Locations: MN, WI, northern MI, VT, NH, northern NY, ME
• Why: Frequent sub-zero temps reduce heat pump efficiency below gas furnace cost-effectiveness
• Exception: If no natural gas available, cold-climate heat pump + backup beats electric/oil/propane furnaces

Anywhere with Cheap Natural Gas (<$1.20/therm)

• Why: Gas heat costs $0.50-0.70 per therm equivalent vs $1.20-1.80 for heat pump electricity
• Payback: Never—gas furnace saves money every year

Pros & Cons of Each System

Heat Pump Advantages

• One system heats + cools: Simpler, less maintenance, no furnace/chimney needed
• Lower upfront cost: $2,000-4,000 less than buying AC + furnace separately
• Higher efficiency: 200-350% efficient vs gas furnace 80-98% (though gas may still cost less per BTU)
• Safer: No combustion, carbon monoxide risk, or gas leaks
• Cleaner: All-electric operation (pairs well with solar panels)
• Incentives: Federal tax credits ($2,000 for heat pumps) and utility rebates ($500-2,000) often available

Heat Pump Disadvantages

• Performance drops in extreme cold: Below 25-30°F, efficiency falls; below 5°F, may need backup heat
• Backup heat needed: Electric resistance strips add $300-800 to install, use expensive electricity
• Higher operating costs in cold climates: $100-300/yr more than gas furnace if electricity >$0.12/kWh and gas <$1.50/therm
• Defrost cycles: Unit reverses to melt ice on outdoor coil (temporarily blows cold air indoors—annoying but necessary)
• Complex repairs: Reversing valve, defrost control add failure points vs simpler AC

Central AC + Furnace Advantages

• Lowest operating cost in cold climates: Gas heating costs 40-60% less than heat pump electric heat
• Reliable heat at any temperature: Furnace output doesn't drop in extreme cold
• Faster heating: Gas furnace supplies 120-140°F air vs heat pump 90-100°F (feels warmer)
• Simpler AC: Fewer components than heat pump = less to break

Central AC + Furnace Disadvantages

• Higher upfront cost: $2,000-4,000 more than heat pump alone
• Two systems to maintain: Annual AC and furnace service, two sets of potential repairs
• Gas infrastructure needed: Requires natural gas line or propane tank (not available everywhere)
• Combustion risks: Carbon monoxide, gas leaks, fire hazards (small but real)
• Chimney/venting required: Adds $500-1,500 to install cost if not present
• Fewer incentives: Minimal rebates for gas furnaces (environmental push toward electrification)

Sizing Differences

Cooling Capacity (Same for Both)

Size heat pumps and ACs identically for cooling load. Use our BTU calculator to determine tonnage needed. See tonnage guide for conversion.

Heating Capacity (Heat Pumps Only)

Heat output varies by outdoor temperature. A 3-ton heat pump delivers:

• 47°F outdoor: 36,000 BTU/hr (full rated capacity)
• 32°F outdoor: ~30,000 BTU/hr (83% capacity)
• 17°F outdoor: ~24,000 BTU/hr (67% capacity)
• 5°F outdoor: ~18,000 BTU/hr (50% capacity, standard models)

Cold-climate models: Maintain 75-100% capacity down to -5°F to -15°F (hyper-heat or inverter-driven technology).

Sizing strategy: Size heat pump for cooling load (most critical). Add backup heat strips (5-15 kW) to cover heating shortfall on coldest days. See heat pump sizing checklist.

Tax Credits & Incentives

Federal Tax Credit (2024-2032)

• Heat pumps: 30% of cost, up to $2,000 credit
• Central AC: 30% of cost, up to $600 credit
• Gas furnaces: No federal credit (unless 97%+ AFUE, then $600)

Example: $7,500 heat pump = $2,000 credit (maxes out). $5,500 AC = $600 credit (maxes out). Heat pump saves extra $1,400 in tax credits.

State & Utility Rebates

Many states/utilities offer additional rebates:

• Heat pumps: $500-2,500 rebates (especially in states pushing electrification)
• ACs: $100-500 rebates (lower priority)
• Gas furnaces: $50-300 rebates (declining)

Check DSIRE database for local incentives.

Real-World Decision Examples

Case 1: Atlanta, GA (Zone 3) - Replacing AC + Furnace

• Option A: 2.5-ton AC ($5,500) + 95% gas furnace ($4,000) = $9,500
• Option B: 2.5-ton heat pump ($7,000)
• Upfront savings: $2,500 for heat pump
• Operating costs: Nearly identical (mild winters, gas $1.40/therm, electricity $0.12/kWh)
• Incentives: $2,000 federal credit + $500 utility rebate = $2,500 back on heat pump
• Decision: Heat pump. Net upfront cost: $2,500 ($7,000 - $2,500 rebates - $2,500 saved vs AC+furnace), performs identically.

Case 2: Chicago, IL (Zone 5) - Replacing AC, Keeping Gas Furnace

• Option A: 3-ton AC ($6,500), keep existing gas furnace
• Option B: 3-ton cold-climate heat pump ($9,500)
• Upfront difference: $3,000 more for heat pump
• Operating costs: Gas heating ($950/yr) vs heat pump heating ($1,350/yr) = $400/yr penalty
• Payback: Never (lose $400/yr forever)
• Decision: Keep gas furnace, buy AC. Gas is cheap ($1.20/therm), winters are harsh (furnace more reliable below 0°F).

Case 3: Phoenix, AZ (Zone 2) - Replacing Electric Furnace

• Option A: 3.5-ton AC ($7,000) + keep electric furnace (rarely used)
• Option B: 3.5-ton heat pump ($8,200)
• Upfront difference: $1,200 more for heat pump
• Operating costs: Heat pump saves $200/yr (minor heating use but electric furnace is 100% efficient while heat pump is 300% efficient)
• Incentives: $2,000 federal credit + $1,200 utility rebate
• Decision: Heat pump. After incentives, heat pump is $2,000 CHEAPER upfront ($8,200 - $3,200 rebates = $5,000 net cost vs $7,000 AC).

Bottom Line: Which to Choose?