Are heat pumps still worth it?
There is no national answer, and anyone who gives you one is selling something. The answer turns on your electricity rate, the fuel you burn now, and what your state pays. Here is what each of those is worth in 2026, and where to run your own number.
The old math is gone, not the decision
Until the end of last year, most heat pump advice carried a federal discount inside it. The 25C Energy Efficient Home Improvement Credit was historically worth up to $2,000 a year on a qualifying heat pump, and every "net cost" figure written before 2026 quietly assumed you would get it.
That credit is over. It was terminated for property placed in service after December 31, 2025, under the One Big Beautiful Bill Act (Public Law 119-21, signed July 4, 2025). The IRS uses the placed-in-service date, meaning installed and operational, not the date you signed a contract or paid a deposit. Equipment bought in 2025 and installed in 2026 does not qualify. Verified July 15, 2026.
So when you read that a heat pump costs some tidy number "after the credit," check the date on the article. Anyone quoting a post-credit net cost in 2026 is quoting 2025 math. The equipment did not change, the fuel prices did not change, but roughly two thousand dollars of the case for buying one walked out the door.
If your system was placed in service on or before December 31, 2025, you still claim it on your 2025 return, filed in 2026, using IRS Form 5695. That is the last filing season for it. The full picture is in what the end of the federal heat pump tax credit means, with the filing steps in the Form 5695 walkthrough.
The honest 2026 question is no longer "is a heat pump good." It is "does the math still work for my house without the federal money." That question has different answers in different zip codes, and the rest of this page is the inputs, not a verdict.
Installed prices, before any incentive
Ranges with the driver named. Where our sources disagree, both figures are shown rather than averaged into a fake middle.
| System | Installed | What moves it |
|---|---|---|
| Whole-home ducted heat pump | $14,000–$25,000 | Before incentives. Low end: moderate climate, tight house, usable existing ductwork, competitive contractor market. High end: cold climate, high-labor metro, electrical work, ductwork. |
| New ductwork (adder) | $2,000–$10,000+ | $2,000 for a small home, $10,000 and up for a full retrofit. This is the single largest swing item on a ducted job. |
| Ductless mini-split, single zone | $5,400–$8,500 | Rewiring America band, median $6,600. Angi and HomeAdvisor report $2,000–$6,000 with most spending about $3,000; for a heating retrofit rather than a spot-cooling install, the higher band is the safer anchor. |
| Ductless, multi-zone | $6,500–$15,000+ | Roughly $2,000–$7,000 per zone. Zone count is the biggest cost driver on a ductless job. |
Two credible sources put the whole-home number in different places, and we publish both. EnergySage's marketplace data gives an average of $14,529 for a ducted system, with an all-type whole-home average of $15,393 and state extremes running from roughly $8,000 in New Mexico to roughly $33,000 in New York. Rewiring America's medians are higher: $19,500 for a 1,500 to 2,500 square foot home, $25,000 for 2,500 to 5,500 square feet, and $29,000 above that.
Marketplace averages skew toward the homes that were easy to quote. Modeled medians skew toward a complete job. Your house lands somewhere in that spread depending on ductwork, electrical work, and how many contractors want the work in your town. Costs data accessed July 12, 2026.
Two adders worth pricing before you decide anything. Cold-climate equipment carries a premium of 20 to 40 percent over a standard heat pump, roughly $8,000 to $15,000 standard against $12,000 to $20,000 cold-climate. That figure comes from a single source (SolarTech, 2025), so treat it as an order of magnitude rather than a quote. And cold-climate Northeast metros can run 20 to 50 percent above the national midpoints on labor alone.
Full breakdown in the heat pump installation cost guide, or put your own square footage and system type into the heat pump cost calculator. If you are weighing ducted against ductless, start with ducted vs ductless.
Two numbers, same month, twice the difference
Residential electricity prices by census region, April 2026, EIA.
per kWh, residential, April 2026
per kWh, residential, April 2026
That is the whole argument in two numbers. Same country, same month, same appliance, and one household pays almost exactly twice what the other pays for every kilowatt-hour the heat pump draws. No national verdict can survive a spread that size, which is why this page does not offer one and why you should distrust any article that does.
| Census region | ¢ / kWh | Note |
|---|---|---|
| New England | 29.49¢ | The most expensive electricity in the lower 48 |
| Pacific (contiguous) | 26.05¢ | |
| Middle Atlantic | 25.09¢ | |
| East North Central | 19.78¢ | |
| US residential average | 18.83¢ | The number most national articles quote |
| South Atlantic | 16.45¢ | |
| Mountain | 14.92¢ | |
| West North Central | 14.62¢ | Half the New England rate, same month |
What you pay now matters just as much. Residential natural gas ran $13.96 to $16.25 per thousand cubic feet across the November 2025 to March 2026 heating season, which works out to about $1.35 to $1.57 a therm (derived). Heating oil finished the season at $5.535 a gallon and propane at $2.674 a gallon, both dated March 30, 2026.
Read those last two figures carefully. They are the final weekly readings of the 2025–26 season, not current prices. The EIA weekly heating fuel survey is paused off-season and returns in October 2026, so anyone publishing an oil or propane price today is publishing a March number. Use your own last delivery ticket instead.
The per-BTU arithmetic, including the formula for your own rates, is in heat pump vs furnace operating cost. To run it with your own bill, use the heating fuel cost comparison calculator.
Four situations the expired credit did not change
These cases were never carried by the federal credit. They are carried by the fuel you are leaving or the equipment you were buying anyway.
You heat with electric resistance now
Baseboard, wall heaters, or an electric furnace. A heat pump moves heat instead of making it, so it delivers the same warmth from the same meter using less electricity. This is the one case where the fuel does not change and the bill still falls, which is why it is also the case most surviving rebate programs are built around.
You buy oil or propane by the truckload
The final weekly EIA readings of the 2025–26 season, dated March 30, 2026, put heating oil at $5.535 a gallon and propane at $2.674 a gallon. Delivered fuels are the most expensive common way to heat a house in most of the country, and they are priced in a market you do not control.
You need cooling anyway
If the air conditioner is also near the end of its life, compare the heat pump against the cost of a furnace plus a new AC, not against the furnace alone. One machine replaces two, and the incremental cost of the heating side is much smaller than the sticker price suggests.
Your state still funds rebates from ratepayer money
State and utility efficiency programs are funded by a charge on energy bills, not by the federal budget, so they did not expire with 25C. In the strongest states this money is larger than the old federal credit was.
Mass Save pays up to $9,500 for a partial-home air-source heat pump with bonuses, up to $8,500 for a whole-home air-source system, and up to $13,500 for ground-source. Income-qualified households can reach up to $16,000 for an air-source system, up to $25,000 for ground-source, or no-cost installation. Heat pump water heaters run $750 to $1,500. Verified July 15, 2026.
That is more than the federal credit ever paid on a single heat pump, and it comes from a charge on Massachusetts energy bills rather than the federal budget. It is also specific to Massachusetts. A neighboring state may have a fraction of it, or none. Do not assume a headline rebate figure from one state applies to yours, and do not assume a federal allocation to your state means a rebate exists: a state has to file a blueprint, get approval, and launch a program before a homeowner can apply.
Find out what your state actually pays
The Rebate Matcher checks the programs live in your state and utility territory, with the eligibility rules attached to each amount. It takes a zip code and about a minute.
Cheap gas, costly power, and a furnace that still runs
Stack all three and the honest answer is not yes. It is wait, and do the envelope work in the meantime.
Cheap natural gas
Residential natural gas ran $13.96 to $16.25 per thousand cubic feet across the November 2025 to March 2026 heating season (about $1.35 to $1.57 a therm, derived). Against a gas furnace, fuel cost alone is a genuine contest, and it is decided locally rather than nationally.
Expensive electricity
Every cent per kWh works against the heat pump on the operating side. In a region at 25 to 30 cents, the case has to be carried by something else: the rebate, the cooling you were buying anyway, or the fuel you are getting off.
A furnace with years left
Replacing working equipment means paying the full installed price to buy a fuel-cost difference. When the appliance is already dead, you are only paying the difference between the heat pump and the furnace you would have bought instead. That is a much smaller number, and it is the moment the math is friendliest.
We would rather tell you to wait than sell you a number we cannot source. If you have cheap gas, expensive electricity, and a furnace with five good years left, the heat pump case is thin right now. It is not thin forever: rates move, state programs change, and the furnace will eventually fail on a cold night whether or not you have a plan.
The productive thing to do in that window is the envelope. Air sealing and insulation cut the heating load no matter what burns the fuel, they lower this winter's bill on the system you already own, and they shrink the heat pump you eventually buy. A tighter house needs a smaller machine, and a smaller machine is a smaller check. That is the one move that pays off under either outcome.
Start with the right order to do a retrofit in and why weatherizing first buys a cheaper heat pump. For the money side, see how to pay for insulation. And decide before the furnace dies, not during: how to pay for a furnace replacement covers the emergency version of this decision.
Three inputs decide it
We are not going to publish a payback period. There is no honest national one, and a made-up figure is worse than none. Here is what to gather instead.
Your electricity rate
Not the regional average, the number on your own bill. Take the total dollar amount and divide by the kWh used, so that delivery charges and supply charges are both in it. That single figure moves the answer more than any other input on this page.
Fuel cost comparison calculatorYour current fuel and what you pay for it
Oil, propane, natural gas, or electric resistance, plus your actual delivered price. If you burn oil or propane, use your own last delivery ticket: the EIA weekly survey is paused for the off-season and returns in October 2026, so the March 30, 2026 readings are the most recent published national figures.
The per-BTU mathWhat your state and utility actually pay
Not the federal allocation, the program you can apply to today. Rebate amounts, eligibility rules, and pre-weatherization requirements vary by state and by utility inside a state, and they change during the year.
Rebate MatcherPut those three together and you have a real comparison for your own house: the installed price after the rebates you can actually claim, against the difference between what you spend on fuel now and what you would spend on electricity instead. Two more things belong in that comparison. One is how long the equipment lasts, which sets the number of winters the operating difference runs for (see how long heat pumps last). The other is the cost of the money if you are borrowing, which is covered in heat pump financing and, across every measure, in how to pay for home energy upgrades.
When you get to quotes, hold contractors to the same standard we hold ourselves to on this page: any savings figure comes with the electricity rate and fuel price behind it, or it does not count. The installer question list is built for exactly that conversation.
Common questions
Are heat pumps worth it in 2026?
It depends on three things: your electricity rate, the fuel you heat with now, and what your state and utility pay. Households replacing electric resistance heat, oil, or propane usually come out clearly ahead. Households with cheap natural gas and expensive electricity are a real contest that has to be decided with local numbers, not a national verdict.
Are heat pumps still worth it without the federal tax credit?
The 25C credit was terminated for property placed in service after December 31, 2025, under the One Big Beautiful Bill Act (Public Law 119-21). It was historically worth up to $2,000 a year on a qualifying heat pump. What is left is state and utility rebate money, which is funded by charges on energy bills rather than the federal budget and did not expire. In the strongest rebate states that money is larger than the federal credit was; in states with no program it is nothing, and the answer changes accordingly.
Do heat pumps work in cold weather?
Cold-climate models are designed for it and are the standard specification in northern states. They cost more: one source, SolarTech in 2025, puts the cold-climate premium at 20 to 40 percent over a standard heat pump. Sizing should come from a load calculation on your house, and the backup heat strategy should be written into the quote rather than assumed.
Will my electric bill go up if I install a heat pump?
Yes, if you are switching off oil, propane, or gas. You are moving your heating load onto the electric meter, so the electric bill rises while the fuel bill falls or disappears. The comparison that matters is your total annual energy spend, not either bill on its own. Ask any contractor who shows you a savings figure which electricity rate and which fuel price they used.
Is it worth replacing a working furnace with a heat pump?
Usually not on cost alone. Replacing working equipment means paying the full installed price to buy a fuel-cost difference. The honest move in that case is to do the envelope work first, air sealing and insulation, then buy the heat pump when the furnace fails. A tighter house needs a smaller, cheaper heat pump, so the waiting period is productive rather than idle.
Keep reading
The federal credit expired
What the end of 25C means for a 2026 install, what a 2025 install can still claim, and what replaced the federal money.
Heat pump installation cost
The installed-price bands in detail, what drives them, and where the sources disagree with each other.
Heat pump vs furnace operating cost
The per-BTU arithmetic, the formula for your own rates, and the four things that tilt the comparison.
How to pay for it
Cheapest money first: rebates, 0% state and utility loans, on-bill financing, home equity, then everything else.
How long do heat pumps last?
Expected service life, what shortens it, and why the lifespan matters more than any payback number once the credit is gone.
Rebates in 2026
What is actually available this year at the federal, state, and utility level, and what a federal allocation does not mean.
The last input is a real price for your house.
Cost ranges only take you so far. Get quotes from installers in your area, then run the comparison against the fuel you burn now.
Get heat pump quotes