Should a Minnesota house have a heat pump or a gas furnace?
For most Minnesota houses with natural gas, the answer is both: a heat pump in place of the air conditioner, with a gas furnace for the coldest weather (dual fuel). Propane and electric-resistance homes gain the most from the heat pump. A furnace alone makes sense when your AC is still young.
Key points
- For most Minnesota gas homes the answer is both: a heat pump in the AC's place and a furnace for deep cold (dual fuel).
- Installed with us: furnace $4,500–$9,500, ducted heat pump $7,500–$14,500, both together $12,000–$24,000.
- One million BTU of heat takes about 10.4 therms in a 96% gas furnace, 293 kWh of resistance heat, or 98–167 kWh from a heat pump at a COP of 3.0 to 1.75.
- Cold-climate heat pumps keep heating below zero, but their output falls as it gets colder, so the backup has to be planned.
- The federal 25C tax credit ended after 2025; CenterPoint's ducted heat pump rebate requires pairing with a gas furnace.
For most Minnesota houses on natural gas, the practical answer is both: a heat pump takes the air conditioner's place and heats through fall, spring and the milder part of winter, while a gas furnace carries the deep cold. A heat pump alone suits a tight all-electric house, propane and electric-resistance homes gain the most from adding one, and a new furnace by itself still makes sense when the furnace has failed and the air conditioner has years left.
Four things settle it for your house: what heats it now, how old the air conditioner is, how much heat the house loses, and what you pay for gas, propane and electricity. Each one can be checked, and the sections below work through them with our installed prices and the fuel math.
What each setup costs to install
A ducted heat pump doesn't replace a furnace one for one. It replaces the air conditioner: it cools in summer, heats the rest of the year, and in most Minnesota installs a furnace stays behind it for the coldest nights. So the real comparison is between setups.
| Setup | Installed with us | What you get |
|---|---|---|
| New gas furnace, current AC stays | $4,500–$9,500 | New heat; cooling unchanged |
| Heat pump in the AC's place, healthy furnace stays (dual fuel) | $7,500–$14,500, usually the lower part | New cooling, plus heat pump heat down to the switchover temperature |
| New furnace and new heat pump together | $12,000–$24,000 (our two ranges added) | A complete new dual-fuel system |
| All-electric heat pump with backup heat strips | $7,500–$14,500, toward the top | No furnace; electric strips cover the coldest hours |
Within the furnace range, an 80% AFUE furnace runs roughly $4,500–$6,000 installed and a 96–98% condensing furnace roughly $6,500–$9,500. Central air alone runs $5,200–$9,800, so when the air conditioner is due anyway, the gap between an AC quote and a heat pump quote for the same house is the up-front price of heating with the outdoor unit. Our heat pump installation cost guide breaks down those line items, furnace and AC replacement cost covers replacing both at once, and our Minneapolis cost page shows how older city houses move a quote.
How do heat pump and furnace running costs compare?
No one can give you a running cost without your rates, but the physics doesn't change. The table shows how much fuel each system uses to put one million BTU of heat into your house, based on the U.S. Energy Information Administration's energy content figures: 100,000 BTU in a therm of natural gas, 91,452 BTU in a gallon of propane and 3,412 BTU in a kilowatt-hour.
| Heating system | Fuel for 1 million BTU of heat |
|---|---|
| Gas furnace, 96% AFUE | about 10.4 therms |
| Gas furnace, 80% AFUE | 12.5 therms |
| Propane furnace, 96% AFUE | about 11.4 gallons |
| Propane furnace, 80% AFUE | about 13.7 gallons |
| Electric furnace or baseboard (COP 1.0) | about 293 kWh |
| Heat pump at a COP of 1.75 | about 167 kWh |
| Heat pump at a COP of 3.0 | about 98 kWh |
Multiply each line by the all-in price from your own bill, delivery and fuel charges included; the lowest result is the cheapest heat. COP is heat delivered per unit of electricity, and it drops as the outdoor temperature drops, so the heat pump rows slide with the weather. A COP of 1.75 at 5°F is the floor in ENERGY STAR's cold-climate criteria, and a unit's submittal sheet or NEEP listing gives its COP at other temperatures.
Two patterns hold for every house. Against electric resistance on the same electric rate, the heat pump wins every hour it runs, because any COP above 1.0 needs fewer than 293 kWh. Against gas or propane, the winner changes with the weather: at some outdoor temperature the furnace can become the cheaper heat, and a dual-fuel control switches there. Our dual-fuel guide shows how to find that temperature from your bills, and switching from propane to a heat pump runs the gallon version.
How cold can a cold-climate heat pump keep heating?
A cold-climate heat pump keeps heating well below zero. Mitsubishi rates its Hyper-Heat models to keep heating down to -13°F, and ENERGY STAR's cold-climate label requires a unit to hold at least 70% of its 47°F heating capacity at 5°F. What drops is output: the colder it gets, the less heat the heat pump moves, just as the house loses more. Below the temperature where it can't keep up, something else fills the gap, either the furnace or electric strips.
That's why this question so rarely ends with one or the other in a Minnesota house. The furnace is also insurance: if the outdoor unit needs a part during a January cold snap, the house stays warm while it waits. Do heat pumps work in Minnesota winters covers balance points and the specs worth comparing.
Which one wins in your house
| Your house | What usually makes sense | Why |
|---|---|---|
| Natural gas; furnace failing, AC under 10 years old | New furnace now, heat pump when the AC gives out | The AC has life left, and a heat pump can take its place later on the same furnace |
| Natural gas; AC failing, furnace healthy | Heat pump in the AC's place (dual fuel) | The furnace becomes the backup, and you pay only the gap between an AC and a heat pump |
| Natural gas; both near the end | New furnace with a heat pump, or with central AC | Price both setups from one visit |
| Propane | Heat pump for the milder weather, propane furnace as backup | Every hour on the heat pump is gallons that don't get delivered |
| Electric furnace or baseboard | Heat pump added to what you have | Resistance heat gets 3,412 BTU from a kWh; a heat pump gets more (electric furnace vs heat pump) |
| No gas line, tight newer house | All-electric cold-climate heat pump with backup strips | A house that loses little heat lets the heat pump carry most of the winter |
| Radiators and a boiler | Keep the boiler, add ductless heat pumps | There are no ducts for a ducted heat pump or a furnace |
The ages in that table come from ENERGY STAR, which suggests considering replacement once an air conditioner or heat pump passes 10 years or a furnace passes 15. Lennox puts a gas furnace's typical life at 15–20 years and a heat pump's at about 15, and Carrier points out that a heat pump runs year-round, so it wears more than a furnace that only runs in winter. In a dual-fuel setup the furnace runs fewer hours, since the heat pump takes the milder part of the season.
Minnesota details that change the math
- Utilities. In Minneapolis, CenterPoint Energy supplies the gas and Xcel Energy the electricity; in Saint Paul, Xcel supplies both. CenterPoint's ducted heat pump rebate applies only when the heat pump is paired with a gas furnace, and Xcel says customers who heat mainly with a heat pump can get a reduced space-heating rate. Amounts change yearly, and the federal 25C tax credit ended for equipment placed in service after December 31, 2025. Our pages on heat pumps in Minneapolis and heat pumps in Saint Paul cover how each city's housing plays in.
- The house. A drafty 1920s story-and-a-half loses heat fast, so its heat pump hands off to the furnace at a warmer temperature than the same unit would in a tight 2010s two-story. Heat pump air also leaves the registers cooler than furnace air, and ducts that were barely enough for a furnace can leave a far bedroom short.
- Power outages. A modern gas furnace needs electricity for its inducer, igniter, controls and blower, so neither system heats through an outage without backup power.
- Snow. The outdoor unit goes on a stand or wall bracket above the drift line and away from roof drip, so defrost water drains instead of freezing under the coil.
Does a dual-fuel house still need carbon monoxide alarms?
- A gas or propane furnace burns fuel, so a dual-fuel house still needs carbon monoxide alarms. Minnesota law (Minn. Stat. 299F.51) requires an approved, operational CO alarm within ten feet of each room lawfully used for sleeping, and the Minnesota Department of Health advises having fuel-burning appliances such as a furnace checked by a qualified heating contractor every year.
- If you smell gas, leave the house and call your gas utility or 911 from outside.
- If snow or ice builds up on the outdoor unit, clear the snow by hand, never chip ice off the coil, and call if the coil stays iced after a defrost cycle.
What to do next
The useful quote shows both setups side by side. We run a Manual J load calculation, check the furnace's age and the electrical panel, and write up a dual-fuel option next to the alternative that fits your house, with model numbers and the backup heat spelled out. Call 612-429-3465, open 7 days, 7am–9pm, or start with our heat pump service page. If the furnace or heat pump you have now isn't heating right, a repair visit is a $79 trip charge, waived when you approve the repair.
Questions
Is a heat pump cheaper to run than a gas furnace?
It depends on the outdoor temperature and your rates. To deliver one million BTU of heat, a 96% gas furnace burns about 10.4 therms, while a heat pump uses about 98 kWh at a COP of 3.0 and about 167 kWh at 1.75. Multiply those by your own prices. The heat pump's COP falls as it gets colder, so at some temperature gas can become the cheaper heat, and a dual-fuel control switches there.
What does a new furnace and heat pump together cost?
With us, a new furnace runs $4,500–$9,500 installed and a ducted heat pump $7,500–$14,500, so replacing both adds up to $12,000–$24,000. If your furnace is healthy, adding only the heat pump in the air conditioner's place usually lands in the lower part of its range. Every option comes on a written, flat-rate quote after a Manual J load calculation.
How long do heat pumps and furnaces last?
Lennox puts a gas furnace's typical life at 15–20 years and a heat pump's at about 15. Carrier points out that a heat pump runs year-round, heating and cooling, so it wears more than a furnace that only runs in winter. ENERGY STAR suggests considering replacement once a heat pump or air conditioner passes 10 years, or a furnace passes 15.
Is a heat pump or a new propane furnace better for a propane house?
Usually both, set up as dual fuel. A cold-climate heat pump carries fall, spring and milder winter days on electricity, and the propane furnace covers the deep cold. A 96% propane furnace uses about 11.4 gallons per million BTU of heat; compare that at your gallon price with the heat pump's kilowatt-hours at your electric rate. Read your propane contract too, since buying fewer gallons can change its terms.
Sources
- ENERGY STAR's cold-climate criteria energystar.gov
- Minnesota Department of Health health.state.mn.us
- NEEP Cold Climate Air Source Heat Pump List ashp.neep.org