Is a Heat Pump Worth It in 2026?
Running costs from the 2025–26 heating season · Updated August 13, 2026
The federal tax credit that paid up to $2,000 toward a heat pump does not apply to a system placed in service in 2026, so the decision now rests on what it costs to run. That depends almost entirely on what you heat with today. On this season's prices a heat pump costs less to run than propane in 38 of 38 states, less than heating oil in 21 of 21, and less than electric baseboard heat in all 51. Against natural gas it wins in only 20 of 51.
Cost to deliver a typical 50 MMBtu winter heating load (EIA RECS), using state-average fuel prices for the 2025–26 heating season and standard equipment efficiencies. Full method on the heating cost page.
What changed for 2026
| Incentive | Through 2025 | 2026 |
|---|---|---|
| Federal 25C credit | 30% of cost, up to $2,000 for a qualifying heat pump | Does not apply to property placed in service after Dec 31, 2025 |
| State rebates (IRA-funded) | Rolling out state by state | Still running in some states, closed or waitlisted in others |
Credit status per the IRS, which limits the credit to property "placed in service on or after Jan. 1, 2023, and before December 31, 2025." This is not tax advice; confirm your own situation with the IRS or a tax professional.
What it costs to run, by state
Annual cost to deliver the same amount of heat, by fuel. The color says which option is cheaper in your state, nothing more. Neither answer is the right one to want: if the fuel you already burn is the cheaper one, that is money you are keeping.
- Heat pump is cheaper
- This fuel is cheaper
| State | Heat pump | Natural gas | Propane | Heating oil | Baseboard |
|---|---|---|---|---|---|
| Alabama | $855 | $970 | $2,055 | — | $2,400 |
| Alaska | $1,365 | $690 | — | — | $3,825 |
| Arizona | $820 | $1,015 | — | — | $2,295 |
| Arkansas | $675 | $1,235 | $1,390 | — | $1,895 |
| California | $1,720 | $1,170 | — | — | $4,815 |
| Colorado | $860 | $585 | $1,320 | — | $2,410 |
| Connecticut | $1,480 | $915 | $2,275 | $1,655 | $4,140 |
| Delaware | $915 | $985 | $2,120 | $1,860 | $2,555 |
| District of Columbia | $1,250 | $915 | — | — | $3,500 |
| Florida | $810 | $1,365 | $2,770 | — | $2,275 |
| Georgia | $750 | $1,015 | $1,830 | — | $2,105 |
| Hawaii | $2,150 | $2,940 | — | — | $6,020 |
| Idaho | $650 | $385 | $1,405 | — | $1,815 |
| Illinois | $935 | $600 | $1,130 | — | $2,615 |
| Indiana | $880 | $610 | $1,470 | $1,485 | $2,460 |
| Iowa | $685 | $565 | $945 | $1,345 | $1,920 |
| Kansas | $780 | $765 | $1,130 | — | $2,185 |
| Kentucky | $725 | $810 | $1,585 | $1,380 | $2,030 |
| Louisiana | $675 | $1,095 | — | — | $1,885 |
| Maine | $1,535 | $1,025 | $1,955 | $1,565 | $4,300 |
| Maryland | $1,220 | $915 | $2,130 | $1,700 | $3,415 |
| Massachusetts | $1,615 | $1,310 | $2,025 | $1,730 | $4,525 |
| Michigan | $1,050 | $570 | $1,345 | $1,420 | $2,945 |
| Minnesota | $805 | $555 | $1,160 | $1,525 | $2,260 |
| Mississippi | $780 | $895 | $1,795 | — | $2,180 |
| Missouri | $660 | $905 | $1,245 | — | $1,840 |
| Montana | $695 | $485 | $1,200 | — | $1,940 |
| Nebraska | $645 | $695 | $955 | $1,225 | $1,805 |
| Nevada | $725 | $570 | — | — | $2,035 |
| New Hampshire | $1,400 | $1,035 | $2,125 | $1,640 | $3,925 |
| New Jersey | $1,205 | $775 | $2,155 | $1,805 | $3,370 |
| New Mexico | $785 | $565 | — | — | $2,195 |
| New York | $1,465 | $955 | $2,095 | $1,800 | $4,095 |
| North Carolina | $765 | $1,040 | $1,995 | $1,490 | $2,135 |
| North Dakota | $615 | $525 | $970 | — | $1,715 |
| Ohio | $930 | $745 | $1,530 | $1,575 | $2,605 |
| Oklahoma | $690 | $745 | $1,320 | — | $1,930 |
| Oregon | $795 | $870 | — | — | $2,220 |
| Pennsylvania | $1,065 | $810 | $1,740 | $1,575 | $2,985 |
| Rhode Island | $1,595 | $1,165 | $2,155 | $1,735 | $4,460 |
| South Carolina | $820 | $920 | — | — | $2,295 |
| South Dakota | $710 | $535 | $1,065 | — | $1,990 |
| Tennessee | $700 | $740 | $1,870 | — | $1,965 |
| Texas | $835 | $1,185 | $1,745 | — | $2,330 |
| Utah | $690 | $575 | $1,360 | — | $1,935 |
| Vermont | $1,245 | $955 | $2,190 | $1,640 | $3,490 |
| Virginia | $840 | $915 | $2,055 | $1,630 | $2,355 |
| Washington | $730 | $900 | — | — | $2,040 |
| West Virginia | $800 | $745 | — | — | $2,245 |
| Wisconsin | $960 | $590 | $1,135 | $1,390 | $2,695 |
| Wyoming | $710 | $655 | — | — | $1,985 |
Dashes mean the state has no published price series for that fuel. Heating oil and propane are surveyed only in states with meaningful use.
What an independent study found
Our table is measured fuel prices applied to one standard heating load. A national laboratory study came at the same question from the other direction, simulating 550,000 statistically representative U.S. households, and reached a compatible answer.
Writing in Joule in February 2024, researchers at the National Renewable Energy Laboratory (now the National Laboratory of the Rockies) and Lawrence Berkeley National Laboratory found that 62% to 95% of U.S. households would see lower energy bills after installing a heat pump, depending on the system's efficiency, rising to 82% to 97% if the home is weatherized at the same time. For the 49 million homes that heat with electricity, fuel oil, or propane and already have air conditioning, they reported median savings of $300 to $650 a year.
That is the same shape as our result: the households heating with electricity, oil, or propane are the clear winners, which is exactly where our per-state table shows the heat pump ahead in every state with data. Their figures are modeled across a simulated population; ours are current measured prices on a fixed load, so the numbers are not directly interchangeable.
Wilson et al., "Heat pumps for all? Distributions of the costs and benefits of residential air-source heat pumps in the United States," Joule, February 12, 2024 (lab summary).
How long would it take to pay back?
Installed quotes vary too much by home, system size, and ductwork for a national average to mean anything, so this uses your quote against your state's measured running-cost saving.
Simple payback on running-cost savings alone, before any state rebate and before the value of the cooling a heat pump also provides. If you were replacing failing equipment anyway, the number that matters is the extra cost over that replacement, not the full quote.
Worked example, without JavaScript: in Florida, propane costs $1,960 a season more than a heat pump for the same heat. A $14,000 installed quote divided by $1,960 a year of savings is about 7.1 years to pay back on running costs alone.
What incentives are left
The Inflation Reduction Act funded state-run rebate programs, separate from the federal credit. Where they have launched, they can cover up to $8,000 of a heat pump for households under 150% of area median income. Availability varies sharply: some states have money open, some have fully reserved their funds and moved to a waitlist, and some have not launched.
We deliberately do not publish a state-by-state rebate table here. Program status changes week to week, and a stale table would be worse than none. Check the Department of Energy's official Home Energy Rebates page and your state energy office for current status.
Frequently asked questions
Is there still a federal tax credit for heat pumps?
Not for a system placed in service in 2026. The Energy Efficient Home Improvement Credit (Section 25C), which was worth 30% of the cost up to $2,000 for a qualifying heat pump, applies only to property placed in service before December 31, 2025, per the IRS. state rebate programs funded by the Inflation Reduction Act are separate and some are still running, so check your state before assuming there is nothing available.
Is a heat pump cheaper to run than what I have now?
It depends entirely on what you heat with. On this season's prices a heat pump costs less to run than propane in 38 of 38 states with data, less than heating oil in 21 of 21, and less than electric baseboard heat in all 51. Against natural gas it wins in only 20 of 51 states. Find your state in the table above.
Why does a heat pump beat electric baseboard heat by so much when both run on electricity?
A heat pump moves heat instead of creating it. We use a coefficient of performance of 2.8, meaning 2.8 units of heat per unit of electricity, from ENERGY STAR, so it uses about a third of the power for the same warmth. Nationally that is $18.7/MMBtu against $52.2/MMBtu for resistance heat, or about $1,675 a season on a typical 50 MMBtu heating load.
If natural gas is cheaper, is a heat pump still worth considering?
Running cost is one input. A heat pump also provides cooling, which a furnace does not, so if you would otherwise buy both a furnace and an air conditioner the comparison changes. Gas prices and electricity rates also move at different speeds. This page reports the running-cost math; the equipment decision includes factors we do not measure.
What do heat pumps cost to install?
We do not publish a national average, because quotes vary widely by home, system size, ductwork, and region, and a single figure would mislead more than it helps. The largest U.S. study of the question, a simulation of 550,000 representative households published in Joule in 2024, reports bill savings but likewise publishes no single national installed cost, naming high installation cost as the main barrier. The calculator on this page takes your own quote and returns the payback using your state's measured running-cost saving.
Related
Sources: EIA state residential electricity prices, EIA natural gas residential prices, EIA State Heating Oil and Propane Program, IRS (credit status), and the U.S. Department of Energy (state rebate programs). See methodology.