Should I replace my electric furnace with a heat pump?
In most Minnesota homes, add a heat pump to an electric furnace rather than replacing it. The furnace becomes the air handler and backup, and the heat pump carries every hour it can, using less electricity per unit of heat. A heat pump installed with us runs $7,500–$14,500.
Key points
- An electric furnace always delivers one unit of heat per unit of electricity (a COP of 1.0).
- A heat pump delivers more than that whenever it runs; ENERGY STAR's cold-climate label requires a COP of 1.75 at 5°F.
- The usual setup keeps the electric furnace as the air handler and backup heat.
- Big thermostat setbacks bring on the electric elements; smaller setbacks keep the heat pump working.
- If you're on a co-op load-control or off-peak program, call the co-op before you change equipment.
An electric furnace is the simplest heating appliance in a house: a blower, a bank of resistance elements and some relays. It is inexpensive to install and rarely fails dramatically, but it is the most expensive way to turn electricity into heat.
Which Twin Cities homes have electric furnaces?
Around the Twin Cities, electric furnaces turn up in houses built beyond the gas lines where the owners didn't want a propane tank, in some 1970s and 1980s all-electric construction, in townhomes and condos, and in lake homes that started out as cabins. Some are on an electric co-op's load-control or off-peak program. If yours is, it changes the plan, so read the section on programs before you shop.
How does a heat pump compare with an electric furnace?
Resistance heat turns one kilowatt-hour into 3,412 BTU of heat, every time, at any outdoor temperature. That is a coefficient of performance (COP) of 1.0. A heat pump moves heat instead of making it, so whenever it runs it delivers more heat than the electricity it uses. ENERGY STAR's cold-climate label, which tests at 5°F, requires a COP of at least 1.75 at that temperature (ENERGY STAR criteria), and heat pumps do better on milder days. Every hour the heat pump carries is an hour of heat for less electricity than the furnace would use. How much that adds up to over a winter depends on your house and your rate, so we won't hand you a savings percentage. Our post on heat pumps in Minnesota winters covers how much of the season a heat pump can carry.
| Electric furnace alone | Electric furnace plus a heat pump | |
|---|---|---|
| Heat per kWh | Always 3,412 BTU (COP 1.0) | More whenever the heat pump runs; ENERGY STAR cold-climate models reach COP 1.75 or better at 5°F |
| Summer cooling | None, unless there's a separate AC | Yes; the heat pump replaces the AC |
| Deep cold | Full output at any temperature | Heat pump output drops, and the elements fill in |
| Outdoor equipment | None | An outdoor unit on a stand above the snow |
| Electrical | Large breakers for the elements | Adds a 240-volt circuit for the outdoor unit |
| Upkeep | Elements, sequencers and blower | Adds the outdoor coil, defrost controls and refrigerant circuit |
Do you keep the electric furnace when adding a heat pump?
The most common approach is an add-on. The heat pump replaces the AC (or goes in where there was none), its indoor coil mounts on the electric furnace, and the furnace becomes the air handler and the backup:
- Stage one, the heat pump. It carries the house by itself whenever it can.
- Stage two, the electric elements. They come on as auxiliary heat when the heat pump falls behind, and during defrost if the system is set up that way.
- Lockouts. A good setup blocks the elements above a set outdoor temperature, so they don't fire on a mild morning just because the thermostat asked for a quick recovery.
One habit is worth changing: big thermostat setbacks. Dropping the house 8 degrees overnight and asking for it back at 6am is a reliable way to bring on the elements. Smaller setbacks, or a heat pump thermostat with smart recovery, keep the heat pump doing the work. Our thermostats page covers heat pump staging.
If the electric furnace is old, the alternative is replacing it with a heat pump air handler that has its own backup strips. The physics doesn't change either way.
What the thermostat and the outdoor unit tell you after the install:
| What you see | Likely cause | What to do |
|---|---|---|
| "Aux heat" every morning | A big overnight setback | Use a smaller setback or smart recovery |
| Aux heat on mild days | No outdoor lockout for the elements, or a heat pump fault | Set a lockout; call if it keeps happening |
| Air at the registers feels cooler than before | Normal: heat pump supply air runs cooler than resistance heat | Nothing, unless rooms fall behind |
| The outdoor unit steams on a cold day | A defrost cycle | Normal; see our defrost post |
| "Emergency heat" left on | The heat pump is locked out and the elements do all the work | Switch back to normal heat |
Load-control, off-peak and co-op programs
Several electric co-ops around the metro run programs built around electric heat, and they matter here:
- Dakota Electric (check its current heat pump page) lists rebates for air-source and ductless heat pumps, for electric thermal storage, and for first-time dual-fuel program enrollment.
- Connexus Energy (check its current heat pump page) lists air-source and ductless heat pump rebates and a reduced-rate heat pump demand-response program.
- Xcel Energy lists Heating Upgrade Rebates for electric space heating and has had a lower space-heating rate for mostly electric homes. Ask whether yours qualifies.
If your electric furnace is on a separate meter or a controlled circuit today, adding a heat pump changes what is being controlled. Call your utility before the install and ask how the heat pump would be metered and what backup the program requires. We don't quote their rates, because they change and the utility's current terms are what count. Some rebates require a utility-registered contractor, so ask that too. The federal 25C tax credit has ended for equipment placed in service after December 31, 2025, so do not count on it.
Cost, wiring, maintenance and comfort
An electric furnace already sits on some of the largest breakers in your panel. The heat pump's outdoor unit needs its own 240-volt circuit. If there was a central AC, that circuit may be reusable if it's sized for the new unit. The panel needs a look at the first visit so the quote has no surprises.
An add-on to a healthy electric furnace sits toward the lower end of our installed range; a new air handler, duct changes or electrical work push it higher. Our heat pump installation cost guide goes through those line items, and our pages on heat pumps in Minneapolis and heat pumps in Saint Paul cover the city side.
Maintenance changes a little: the electric furnace needs its elements, sequencers and blower checked, and the heat pump adds the outdoor coil, defrost controls and refrigerant circuit. One visit covers both, and maintenance visits run $129–$349. Ask us about a maintenance plan if you'd like it scheduled every year.
Comfort changes too. A heat pump's supply air feels cooler at the register than an electric furnace's, but it runs longer and steadier, so rooms swing less between cycles.
Next step
If your house has baseboard heat instead of a furnace, read heat pump vs electric baseboard. For how backup heat is chosen and set, see our dual-fuel and backup heat guide. For an add-on quote on your electric furnace, call 612-429-3465 (open 7 days, 7am to 9pm) or start with our heat pump page.
Common questions about heat pumps
Can I keep my electric furnace as backup?
Usually, yes. The heat pump's coil mounts on the furnace, the furnace blower moves the air, and its elements become the auxiliary heat. The blower, the elements and the controls need checking first. If the furnace is near the end of its life, a heat pump air handler with its own backup strips replaces it.
Why does my aux heat come on when it isn't that cold?
Often it's the thermostat. A big setback, or a large jump in the setpoint, tells the system to catch up fast, and it brings on the electric elements to do it. An outdoor lockout for the elements and smaller setbacks usually fix it. If aux heat runs constantly on mild days, the heat pump itself may need service.
Does my co-op's off-peak program still work with a heat pump?
It depends on the program. Adding a heat pump changes how your heat is metered and controlled, and the program may require a specific kind of backup. Call your co-op before the install. Dakota Electric and Connexus both list heat pump programs, but rules and rates change, so get the current terms in writing.
Is a heat pump cheaper to run than an electric furnace?
Per unit of heat, yes. Resistance elements deliver 3,412 BTU per kilowatt-hour at any temperature, a COP of 1.0. A heat pump delivers more heat than the electricity it uses whenever it runs, and ENERGY STAR cold-climate models reach a COP of at least 1.75 at 5°F. The winter savings depend on your house and your electric rate, so get your numbers before expecting a percentage.
Sources
- ENERGY STAR energystar.gov
- Xcel Energy mn.my.xcelenergy.com