With the tax credit expired end of 2025, the question comes to mind “Does a heat pump make sense?” Like everything this is a loaded question and we need to look at multiple factors that are going to change this. With this, we are going to assume the following:
- Natural Gas $1.09 Per Therm
- Liquid Propane $2.06 Per Gallon
(this can vary a lot between suppliers considering quantity, time of year, if you own the tank, etc) - Fuel Oil $3.43 Per Gallon
- Electricity at 19.5ยข per kWh (WE Energies as of February 2026)
What is your non-electric heat source?
Heat Pump should never be the sole heating source for your home. There are things that can go wrong with a heat pump that will not necessarily be addressable in the winter, so it’s best to have a reliable fallback, and as you’ll see in most cases you should not be running a heat pump even down past a certain degree if cost is your driving factor.
If you have Natural Gas, and with it currently being $1.09 per Therm with WE Energies, you would require a heat pump with a COP of 5.24 or better to run the heat pump. There is no heat pump we sell that can hit a COP that high. (COP = Coefficient of Performance for example a COP of 2.0 means that for every dollar of power you put into the unit, it will return $2.00 of electric heater equivalent)
If you are running Liquid Propane, the COP equivalent would be 2.54 if Propane cost you $2.06 per gallon to refill. This is much more doable with a heat pump. The Amana S-Series Heat Pumps we installed a lot of in 2024-2025 will get this efficiency down to 30 degrees. So, on paper a heat pump will be more efficient than LP down to 30-35 with a modern inverter heat pump system.
If you’re running Fuel Oil, the COP equivalent would be 2.31 if Fuel Oil cost you $3.43 per gallon to refill. If you had an Amana S-Series Heat Pump you could run this down to 15-20 degrees. It is important to note that once you are going below freezing temperatures with a heat pump you absolutely need a drain pan heater. Quite a few brands do not include them from the factory, and would need to be added. Not doing that can cause your heat pump to crack. We have seen units split into two pieces because of a big block of ice pulled the coil apart.
Note for Oil: LP & Natural Gas furnaces are close to 100% efficiency but oil furnaces are closer to 85% at best. This does change the math a bit from above, making a heat pump make more sense potentially down to 10 degrees.
Do you only have electric baseboard?
You are the prime candidate for a heat pump. This is the reason Electric Cars have heat pumps. Electric is the only source of heat, and they want to be able to deliver heat as efficiently as possible without taking away the battery’s charge.
As long as the heat pump is running with a COP of 1.0 you are going to be at same efficiency as electric baseboard, and in most cases a heat pump will at least get that… However, as it gets colder and colder out the heat pump will have to go through a defrost cycle more and more often which is a time when the unit is not producing heat. Each unit will hit a point where it cannot keep up, so it’s best to check with each product to see how it will act at various temperatures to determine a proper cutoff point.
So, a heat pump doesn’t make sense?
Well, it depends. If you have Natural Gas you could still have points where it may be better. For example, at our office we have a solar array that is producing electricity. If you produce excess electricity that you can utilize for heating this may be a good option for mild times of the year.
With solar, however, in the winter the days are shorter, and the angle of the sun is less ideal. For example, our office produces 4-5MWh of energy in the summer months and 1-2MWh of energy in the winter. Part of it is the angle of our panels, but production does definitely dip in the winter.
If you have Propane or Oil a heat pump is a great option for mild weather.