How to Use the Heat Pump Cost Calculator
- Pick your current heating fuel and unit.
- Enter the fuel you use for heating in a year.
- Enter your efficiency and fuel price.
- Enter the heat pump seasonal COP and electricity price.
- Read the yearly savings, costs and payback.
Pick your current heating fuel and unit, then enter how much you used for heating in a year. Your bills or delivery receipts give the total; if the same fuel also heats water or runs a stove, subtract a rough share for those uses. The energy content per unit fills in with a typical value that you can replace with your utility's figure.
Enter the seasonal efficiency of your current furnace or boiler and your fuel price. For the heat pump, enter the seasonal coefficient of performance (COP) and your electricity price. If you plan to keep the old system for the coldest days, set the share of heat the heat pump will supply. Add the installed cost after rebates to see a simple payback.
Heat Pump Running Cost Formula
heat pump electricity (kWh) = heat × share ÷ COP
heat pump cost = electricity × price + backup fuel cost
savings = current cost − heat pump cost payback = installed cost ÷ savings
break-even COP = electricity price ÷ current cost per kWh of heat
The method starts from the heat your home actually used, so it already reflects your climate, house size and insulation. A COP of 3 means the heat pump moves three units of heat for every unit of electricity, so each kWh of heat costs one third of the electricity price. The break-even COP shows how efficient the heat pump must be to match your current cost.
Worked Example: Replacing an Oil Furnace
A home burns 2,500 L of heating oil a year in a furnace with 80% efficiency, at $1.60 per liter. At a typical 10.61 kWh per liter, the oil holds 26,525 kWh and the furnace delivers 21,220 kWh of heat for $4,000, or about $0.19 per kWh of heat.
A heat pump with a seasonal COP of 2.8 needs 21,220 ÷ 2.8 = 7,579 kWh of electricity. At $0.15 per kWh that costs $1,136.79, so the yearly saving is $2,863.21. With an installed cost of $14,000 after rebates, the simple payback is about 4.9 years. The break-even COP is only 0.80, so even on cold days the heat pump costs less to run than oil here.
Typical Fuel Energy Content
| Fuel | Unit | Typical energy | Typical efficiency |
|---|---|---|---|
| Heating oil | liter / US gallon | 10.61 kWh / 40.6 kWh | 78 to 90% |
| Natural gas | cubic meter / therm | 10.35 kWh / 29.31 kWh | 80 to 98% |
| Propane | liter / US gallon | 7.03 kWh / 26.8 kWh | 80 to 95% |
| Electric resistance | kWh | 1 kWh | 100% |
These are common planning values. Gas utilities often print the energy content of their gas on the bill, and older equipment can be well below its original rating. A therm is defined as 100,000 BTU, which is 29.31 kWh.
Tips for a Fair Comparison
- Use a full year of fuel records, or an average of several years, so one mild winter does not skew the result.
- Use the seasonal COP for your climate, not the best-case rating at mild temperatures. Cold-climate models hold their output and efficiency better at low temperatures.
- Include fixed charges you would drop or keep, such as a gas connection fee or a tank rental, when you compare totals.
- Check government rebate programs and your utility's time-of-use rates before you decide.
Assumptions and Limits
The calculator uses one average COP and fixed prices for the whole season. It does not model hourly weather, defrost cycles, electrical upgrades, maintenance or air conditioning value. Payback is simple payback without interest or price changes. Treat the result as an estimate and ask a qualified installer for a heat load calculation before buying.
Frequently asked questions
How much does it cost to run a heat pump?
Divide the heat your home needs by the heat pump's seasonal COP to get electricity use, then multiply by your electricity price. A home needing 21,220 kWh of heat at COP 2.8 and $0.15 per kWh pays about $1,137 a year.
Is a heat pump cheaper than oil heat?
Usually yes. Oil heat often costs close to $0.19 per kWh of heat delivered in the example here, while a heat pump at COP 2.8 and $0.15 per kWh of electricity costs about $0.05 per kWh of heat.
Is a heat pump cheaper than natural gas?
It depends on prices. Where gas is cheap compared with electricity, a high-efficiency gas furnace can cost less to run. Compare your break-even COP with the heat pump's seasonal COP to find out.
What is a good seasonal COP for a heat pump?
Many air-source heat pumps average roughly 2.5 to 3.5 over a heating season, depending on climate and model. Cold-climate units hold up better at low temperatures. Use the rating for your region where available.
What does break-even COP mean?
It is the COP at which a heat pump costs exactly the same to run as your current system. If the heat pump's seasonal COP is higher than the break-even value, it saves money.
How do I find my yearly heating fuel use?
Add up the fuel on a year of bills or delivery receipts. If the same fuel heats water or cooks food, subtract an estimate for those uses so the calculation covers space heating only.