Heat pump or furnace: running the actual numbers for a mixed climate

As of May 2026, EIA data puts Illinois's average residential electricity price at 23.85¢/kWh and natural gas at roughly $1.48/therm. Illinois electricity is notably expensive right now relative to many other states, and that one fact changes this comparison more than almost anything else in it — the math below would land differently in a state with cheaper power.

A modern 95% AFUE furnace delivers 95,000 usable BTU per therm burned, which works out to about $1.56 per 100,000 BTU delivered. A heat pump's cost depends on its coefficient of performance (COP) — how many units of heat it moves per unit of electricity — which changes with the outdoor temperature: at a COP of 3.0 (a mild 40°F+ day), that's about $2.33 per 100,000 BTU; at a COP of 1.75 (a market-typical cold-climate heat pump working near its 5°F rating point), it's closer to $3.99.

At today's Illinois rates, gas costs less than a heat pump across the entire range, from mild days down to the coldest ones. That's a real, current, checkable number, not a rule that holds everywhere — a heat pump running against the national-average electricity price, or against a state with cheaper power, closes or reverses this gap.

"Heat pumps are always cheaper to run" is the version of this most people have heard, and it's not universally true — it depends entirely on the gap between local electricity and gas prices, which varies enormously by state and even by utility. A heat pump moving heat instead of generating it is a genuinely more efficient *process* than combustion, but efficiency of process and cost per dollar are two different measurements, and Illinois's currently high electricity price is exactly the kind of local variable that decides which one wins here.

This is the real mechanism behind the cost range above, not just a marketing footnote. DOE's Cold Climate Heat Pump Technology Challenge and field data from NEEP put market-available cold-climate heat pumps at a COP of roughly 1.75 to 2.25 at 5°F — meaning they still move more heat than the electricity they consume, just less of a multiple than on a mild day. Standard, non-cold-climate heat pumps degrade faster and can approach a COP of 1 — no better than electric resistance heat — somewhere around 0°F. The newest DOE-challenge-grade units hold up notably better, maintaining 70%+ of their capacity and a COP of 2.0–3.5 even at −15°F, but that's the current top tier of the market, not what's in most homes yet.

Operating cost isn't the only line on the ledger. A heat pump handles both heating and cooling from one outdoor unit, so it replaces a furnace-plus-AC pair rather than adding a second system. There's no combustion, which means no carbon monoxide risk and no flue or venting to maintain. And in a genuinely mild climate, or paired with cheaper electricity than Illinois currently has, the cost math above can flip in the heat pump's favor entirely.

At today's Illinois rates, straightforward operating cost, especially on the coldest days when a heat pump's COP is at its worst. A furnace's output also doesn't degrade with outdoor temperature the way a heat pump's does — a 95% AFUE furnace burns at 95% AFUE whether it's 30°F or −10°F outside, which matters more in a climate that actually sees single-digit and below-zero nights.

A dual-fuel system runs a heat pump for most of the heating season and switches to a gas furnace automatically once the outdoor temperature drops below a set point — typically wherever the heat pump's efficiency advantage disappears for your specific rate structure. That means the heat pump handles the mild-to-moderately-cold months when its COP is strong, and the furnace only fires on the genuinely cold days when gas is unambiguously cheaper. It costs more upfront than either system alone, but it's the version of "best of both" that's actually true rather than a sales phrase — sized against your real utility rates, not a rule of thumb.

Worth being precise about this, since it changes yearly: the federal Section 25C Energy Efficient Home Improvement Credit — up to $2,000 for a qualifying heat pump — expired for installations after December 31, 2025, and is not currently available for a 2026 install. Utility-level and state-level rebates are a separate, still-evolving track and sometimes still apply; check current ComEd and Nicor Gas program offerings directly rather than assuming a specific number, since these change without a matching update to every article that mentions them.

If you're staying long-term, already have a gas line, and want the lowest operating cost at today's Illinois rates, a furnace (or a dual-fuel setup) wins the math. If you want one system instead of two, value not having combustion equipment in the house, or your household's electricity cost is lower than the Illinois average, a heat pump is a legitimate, safe, genuinely efficient choice — just not automatically the cheaper one here the way it's often marketed. Neither answer is universally right; the real one depends on the same three numbers this whole comparison started with: your electricity rate, your gas rate, and how cold it actually gets where you live.