Can a Heat Pump Replace Your Furnace? Here's What You Need to Know

The good side of having a heat pump is that it works year-round, keeping your home warm in winter and cool in summer. That way, you don’t need both a furnace and an air conditioner.

Still, deciding to replace your furnace with a heat pump can feel like a tough call. 

Which option really pays off in both the short and long run? The answer depends on key factors such as:

• Your climate

• Installation considerations

• Budget

In this article, we break it all down to help you make a smarter, more informed decision.

Can a Heat Pump Replace Your Furnace? Quick Answer

Yes, a heat pump can replace your furnace, but whether it’s the right move depends on your climate, home setup, and comfort expectations. 

A heat pump works by transferring heat rather than generating it. So it’s highly efficient, often delivering 2–3 times more heat per unit of electricity compared to electric furnaces. 

In moderate climates (say, Atlanta or Dallas), a heat pump can easily handle year-round heating and cooling. But in colder regions (like Minnesota), you’ll likely need a dual-fuel system: a heat pump for mild days and a furnace backup for deep freezes. 

As you make your decision, you want to lock in on these usually overlooked factors: 

1. Ductwork size/condition: Undersized ducts can choke efficiency.

2. Electrical panel capacity: Older homes may need upgrades to handle the load.

3. Defrost cycles: In humid, freezing weather, heat pumps lose efficiency briefly. During defrost, the system temporarily reverses to melt ice, which can affect indoor comfort.

4. Comfort preference: Heat pumps deliver steady, milder heat. This is different from the blast of hot air a gas furnace gives

In the rest of this article, you will learn more deeply about how both systems measure up and whether the replacement is really worth it, based on your situation.

How Heat Pumps Work vs. Furnaces

A heat pump operates similarly to a two-way air conditioner. In winter, it pulls heat from the outside air, then compresses it, and moves it indoors to warm your home. In summer, it reverses the cycle by taking heat from inside and pushing it out. 

The refrigerant absorbs and transfers heat as it flows through the system, then the indoor blower fan circulates the heated or cooled air through your vents.

Some units have Heat Pump Inverters. This is a variable-speed compressor technology used in some heat pumps. 

A furnace doesn’t transfer heat like the heat pump; it generates it. It burns fuel (usually gas or oil) or uses electric resistance to create heat. That heat warms up a metal component called a heat exchanger. 

Then, the blower fan pushes air across the hot exchanger, sending warm air through your ductwork. 

Read our complete comparison on Heat Pump vs Furnace here.

What To Consider Before Deciding

To be sure about your move from furnace to heat pump, walk through these considerations: 

1. Climate Suitability: When Heat Pumps Are Best and When They're Not

When it comes to replacing a furnace with a heat pump, climate suitability is the deal-breaker. Heat pumps work beautifully in regions with mild to moderate winters. 

Take the Pacific Northwest, for example. Cities like Seattle or Portland rarely experience temperatures below 20°F. 

• In that climate, a standard inverter heat pump not only meets the full heating demand but also provides excellent cooling and humidity control in the summer. 

• Similarly, in places like Atlanta or Charlotte, where winter lows hover around 20–25°F, a properly sized heat pump easily covers both cooling and heating system needs. 

• In these climates, homeowners enjoy consistent comfort and lower energy bills without needing a backup furnace.

Another factor often overlooked is how well your home holds heat. A leaky or poorly insulated house will strain a heat pump, forcing it to rely heavily on backup heat. That means before you even think about swapping your furnace, it’s smart to invest in sealing and insulation. 

So, in milder climates, a heat pump can replace a furnace outright. In harsher climates, the smart move is pairing it with a backup system for true comfort and efficiency. 

2. Energy Efficiency Comparison: COP vs AFUE

When you compare a furnace and a heat pump, the key efficiency numbers are AFUE for furnaces and COP for heat pumps. 

AFUE (Annual Fuel Utilization Efficiency) tells you how much of the gas you burn actually turns into heat. For example, a 95% AFUE furnace gives you 95 cents of heat for every dollar you spend on gas. The other 5 cents goes up the flue. That number is fixed and doesn’t change much.

A heat pump works differently. Its efficiency is measured by COP (Coefficient of Performance). Instead of creating heat, it moves it. A COP of 3 means you get three units of heat for every one unit of electricity. 

On a mild 45°F day, most modern heat pumps typically operate at COP 3 or higher (basically 300% efficient). However, as outdoor temperatures drop, the COP decreases (possibly down to 2.0 on a 20°F day or 1.5 if it’s near zero).

So, the real question is, how cold do your winters get, and what are your local energy prices? 

In a place where electricity is cheap and winters are moderate, the heat pump beats a furnace hands down. In colder climates with pricey electricity, the furnace can still win on operating costs.

3. Upfront Costs vs Long-Term Savings

The cost difference can be significant. For example, if the furnace is still working fine and the choice is between a $6,000 AC replacement versus a $21,000 full heat pump installation, that $15,000 gap may be hard to justify. 

Rebates and tax credits can soften the blow (say $3,000 off upfront and another $1,000 in tax incentives, bringing the gap closer to $14,000), but it’s still a major decision. 

In some cases, the price jump can be partly due to the contractor quoting units like a 5-ton dual-zone heat pump, which runs at a higher capacity than a straightforward 4-ton single-zone AC system.

That said, Heat pump units generally come with higher upfront costs, often ranging from $4,500 to $5,700 for the system alone. 

For instance, the Goodman 3 Ton 13.4 SEER2 Packaged Heat Pump Unit is priced at $4,565. 

Although the installation cost is higher, heat pumps deliver significant long-term savings. 

• In many regions, homeowners can save on their energy bills, which could mean cutting a winter electricity bill from $300 to $180–$210, resulting in a monthly savings of around $90 to $120. This still largely depends on home size, local utility rates, or climate zone.

• Heat pumps also serve as cooling units, sparing you the need to purchase a standalone air conditioner.

• When it comes to maintenance, heat pumps generally require more frequent attention than furnaces. 

Since they operate year-round, providing both heating in the winter and cooling in the summer, they experience more wear and tear. 

4. Dual-Fuel Systems: Best of Both Worlds?

While a heat pump can replace your furnace, a common and effective setup is a dual-fuel system that pairs a heat pump with a furnace. 

This setup is ideal for climates that experience a range of mild to freezing conditions. However, dual-fuel systems or heat pump furnaces require compatible controls and proper sizing.

While it costs more upfront than choosing just a heat pump or furnace, the payoff comes from consistently efficient operation and maintained comfort, no matter the weather.

For example, the Goodman 2 Ton Heat Pump Furnace, with a 92% AFUE and 80,000 BTU, allows you to toggle between electric heat transfer and furnace-generated warmth, depending on your climate. 

5. Installation Considerations

In most cases, you don’t need new ductwork. The existing AC power supply can be reused for the heat pump, and the old air handler would simply be replaced with a heat pump-compatible air handler.

If you opt for an all-electric system, the air handler typically includes staged electric heat strips (5–15 kW) for rare cold snaps and defrosting; these require dedicated breakers and often necessitate a panel upgrade to 200A. 

NOTE: Emergency/auxiliary heat strips can range from 5kW up to 25kW+ depending on home size and system design.

If you keep the gas furnace as a backup (dual-fuel), the furnace becomes the air mover and backup heat source. Use an outdoor sensor or smart thermostat to switch economically at your chosen “lockout” temperature.

The Bottom Line

The main point is that if you’re in a mild-to-cool climate and want efficiency (both heating/cooling in one system), replacing a furnace with a heat pump is a smart upgrade. In harsher winters, consider a hybrid.

This is why, at the HVAC Store, we’re committed to delivering top-notch HVAC products and services that enhance the well-being and convenience of our customers' lives. Explore various types of heat pumps for sale on our store.