Search “heat pump vs. furnace” and you’ll find a pile of articles comparing the two machines side by side. Fine, but that isn’t really the decision. What matters in a New Hampshire house is what you’re heating with now, how well the place holds heat, and whether your ducts are up to the job.
So here’s the short version. Heating with oil, propane, or electric baseboard? Get a heat pump quote. On natural gas with a furnace that still works? Honestly, the numbers are a lot closer than the ads make them sound, and keeping the furnace is often the smarter move. The rest of this post is how to check that for your own house.
Start with what you’re heating with now
A heat pump can be a no-brainer in one house and a questionable spend in the one next door. Most of that difference comes down to the fuel it replaces.
| You heat with now | Will a heat pump save money? | Why |
| Heating oil or propane | Most likely | Both cost a lot per unit of heat |
| Electric baseboard | Very likely | A heat pump gets two to three times the heat from each kilowatt-hour |
| Natural gas | Depends on your rates | Gas is cheap per unit of heat, so your electric rate decides it |
Gas is the tricky one. Plenty of people assume a heat pump is automatically cheaper, and it isn’t. In a really cold stretch it can cost more to run than a gas furnace. Plenty of others assume heat pumps just don’t work up here, and that’s wrong too. They work fine when they’re picked for the house.
Run the numbers with your own bill
Heat pump efficiency is usually given as COP, short for coefficient of performance. A COP of 3 means one kilowatt-hour of electricity moves three kilowatt-hours of heat into your house. It isn’t a fixed number, though. It’s higher on a 40-degree day and lower at 10.
That’s what makes a break-even easy to work out. Take the price you pay for your current fuel and divide it by the number in the table. If your electric rate is lower than the result, the heat pump is cheaper to run at that COP.
| Current fuel (price unit) | Divide by, at COP 3 (mild day) | Divide by, at COP 2 (cold day) |
| Natural gas, 95% furnace (per therm) | 9.3 | 13.9 |
| Heating oil, 85% efficient (per gallon) | 11.5 | 17.3 |
| Propane, 95% efficient (per gallon) | 8.5 | 12.7 |
Say gas costs you $2.00 a therm. That’s a made-up number, so use your own bill. At COP 3 the break-even is about 22 cents per kilowatt-hour. At COP 2 it drops to about 14 cents. Oil at $4.00 a gallon works out to roughly 35 cents and 23 cents.
For your electric rate, add the supply and delivery charges together and divide by the kilowatt-hours you used, since delivery is part of what you pay on every kilowatt-hour. The table assumes about 138,500 Btu per gallon of oil, 91,500 per gallon of propane, and 100,000 per therm of gas. The COP figures are round numbers, and real equipment varies.
What jumps out: oil and propane need a very high electric rate before the heat pump loses, which is why those houses tend to save. Gas is a closer race. A heat pump can come out ahead in October and behind in January, and the efficiency number on a brochure won’t tell you which. If you’re on electric baseboard, skip the math. A heat pump uses a half to a third of the electricity for the same heat.
“Cold-climate” doesn’t settle it
“Cold-climate” on a spec sheet means the unit is built to keep heating when it’s cold out. It doesn’t mean it’ll keep your house warm on the worst night of the year. That depends on the balance point, which is the outdoor temperature where the heat pump’s output matches what the house is losing. Above it, the heat pump handles everything. Below it, something has to help, whether that’s electric backup, a furnace, or a second system.
The house moves that number as much as the equipment does. A drafty, under-insulated house loses heat faster, so the balance point is higher and the backup runs more. Air sealing and insulation can change it a lot, so sometimes the cheapest way to make a heat pump work is to fix the house first.
Two things to ask any contractor. What’s the unit’s rated heating capacity at 5°F? It’s on the spec sheet, and if nobody can find it, that tells you something. And what heats the house when it’s colder than the balance point?
One more thing for perspective. A New Hampshire winter has a lot more hours in the 20s and 30s than it does at zero. A heat pump that needs backup during the worst week can still deliver most of the season’s heat.
Ducts: the part everyone skips
Heat pumps blow warm air, just not as hot as a furnace does. That’s normal, and the house can stay perfectly comfortable. It goes wrong when the ductwork is leaky, undersized, or badly balanced. The rooms feel drafty or lukewarm, and the heat pump takes the blame when it was the ducts all along.
Get the ducts checked before you swap a furnace for a ducted heat pump. And if the house has no ducts, or they’re in rough shape, that’s usually where a ductless mini-split comes in. It heats and cools a room or a zone without any ductwork at all.
What about running both?
Dual-fuel pairs a heat pump with a furnace that takes over when it gets really cold. You can also do a lighter version: keep the furnace you’ve got and add a heat pump alongside it. Either way you’re hedging, and either way you’re maintaining two systems and paying more than you would for one. If you’re weighing this against other options, our guide to choosing the right HVAC system for your home lays them out side by side. When you collect quotes, ask each contractor to price the setups separately so you can see what the backup really costs.
When we’d tell you to keep the furnace
We wouldn’t swap a working gas furnace for a heat pump just because heat pumps are everywhere right now. If the furnace has plenty of life left, the ducts are decent, and gas runs down your street, the savings are thin and the upfront cost is real. Some houses also need an electrical panel upgrade first, and that can change the math.
The strongest case for a heat pump is when the furnace and the AC are both on their last legs. You’d be buying two systems anyway, and one heat pump does both jobs. If only one is failing, replace just that one.
Not sure what shape your furnace is in? Our heating services cover furnaces and heat pumps, and a quick look at the equipment is usually enough to tell.
Rebates in New Hampshire
Rebate terms change, so check NHSaves.com before you buy. This is what the 2026 program lists as of October 2026:
- A standard rebate of $250 per ton for qualifying air-source heat pumps.
- A bigger rebate when the heat pump replaces electric resistance heat. You need to get pre-verified before the install.
- A smaller rebate for a Wi-Fi thermostat installed with a qualifying heat pump.
- You generally have to be a residential electric customer of a participating utility, and the equipment has to be on the NHSaves qualified products list.
The rebate is paid after the install, so you cover the full cost up front. The 2026 program year is winding down, so if you’re planning something this winter, check the deadline and ask what 2027 looks like. The federal tax credit for heat pumps was reported to have ended after 2025, so confirm that before you count on it.
Quick answers
Can a heat pump fully replace a furnace in New Hampshire?
Often, yes. It works best in a house that holds heat reasonably well, with a properly sized cold-climate unit. Some houses still want backup for the coldest days, and a visit to the house settles it better than any rule of thumb.
Is a heat pump cheaper to run than a gas furnace?
It depends on your gas price, your electric rate, and the weather. Plug your own bills into the break-even table above.
Do I need a new electrical panel?
Sometimes. It depends on your current service and the size of the system, so have it checked before you get a quote.
What if my house has no ductwork?
A ductless mini-split is the usual answer. It handles individual rooms or zones without ducts.
Want someone to look at your house?
If you’re stuck between the two and you’re in Salem or nearby, we’re happy to come take a look. We’ll check what you have now, the ducts, and how the house heats, then tell you what we’d do, even when the answer is “keep the furnace.” There’s more on our HVAC services in Salem, NH page. Or just Contact us.