Comparative Energy Use of Residential Furnaces and Heat Pumps

Research Report A1602


Steven Nadel


This paper explores the question of whether we should be encouraging or discouraging natural gas use in residential space-heating and water-heating applications based on relative source energy use. Our analysis finds that electric heat pumps generally use less energy in warm states and have moderately positive economics in these states if a heat pump can replace both the furnace and a central air conditioner. Moderately cold states can save energy if electricity comes from the highest-efficiency power plants, but life cycle costs for gas furnaces in existing homes will be lower than for heat pumps. In cold states, further development of cold-temperature electric heat pumps and gas-fired heat pumps will be useful.