The best cost-comparison for a heat pump is the electric baseboard heater, says Modi. This system can supply and control the heat in individual rooms.
Heat pumps don’t burn fuel, but use electricity to move warm air in or out of the house. They both heat and cool your home and can significantly cut down on your carbon dioxide emissions.
The baseboard heater is much cheaper to install, but will cost you more in energy use over the long term.
If you’re comparing an electric heat pump to a gas furnace, they’re better for the environment — they can reduce your household carbon dioxide emissions by 38 to 53% — but whether they actually save you money can depend on a few variables.
The estimated cost of heating a home with natural gas is projected to jump more than 34% from last winter, to $952 this winter, reports the National Energy Assistance Directors Association.
But, Modi says you need to compare the price of both electricity and gas in your area.
“Right now in New York City I'm paying about, retail price, of $20 per million Btu for gas. The rate I'm paying for electricity is such that it’s the equivalent of $85 per million Btu now.”
Btu, or British thermal units, is the most common unit for comparing energy sources or fuels in the U.S. One Btu roughly amounts to the energy released by burning a match, according to the U.S. Energy Information Administration.
So, if the heat pump is three to four times more efficient compared to the furnace, but electricity ends up being five times more expensive than the cost of gas in your area, then you won’t be saving money with a heat pump.
According to a Consumer Reports survey, members paid an average of $7,791 for a heat pump system compared with $6,870 for a gas furnace — however the price of installing a heat pump can be even more costly in areas with colder climates.