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Natural gas furnaces and heat pumps - the whole story

Higher energy costs have made homebuyers more attentive to the energy decisions builders make. In an effort to please potential buyers by keeping their energy costs down, you may be tempted to install a heat pump as a supplement to a natural gas furnace. Before making a purchase, and potentially setting yourself up for unhappy customers and callbacks, be sure you know all the facts. Here are some important points to consider.

The higher delivery temperatures of natural gas furnaces makes them much more comfortable.

The number one factor builders should consider before installing heat pumps is comfort. Many heating contractors and builders have learned first-hand that customers are often not happy with heat pumps because of their lower comfort level. The reason is that heat pumps deliver air at a cool 95 degrees. Because it’s lower than body temperature, the air feels cool — a problem which cannot be resolved by turning up the thermostat. In contrast, a natural gas furnace delivers air at a much more comfortable 120 degrees.

Natural gas furnace versus electric heat pump

Using a furnace alone, without a heat pump, will deliver more comfortable air and cost less to operate. The colder the winter, the more you'll save with a natural gas furnace.


Estimated annual operating costs*

$560 -

$555 -

$550 -

$545 -

$540 -

$535 -

$530 -



*Estimated using three-year average natural gas costs of .96 per therm and electric costs of .08 Kwh. Furnace efficiency is 94 percent Annual Fuel Utilization Efficiency and heat pump data calculated with a Heating Seasonal Performance Factor of 9.
**Base cost includes a furnace with a central air conditioner. The additional cost for the heat pump is based on dealer quotes ranging from $1,000 to $1,600.

For Minnesotans, operating a heat pump will likely cost more than using a furnace alone.

There can be some short-term energy savings from a heat pump and rebates can help offset first costs. However, as the chart above indicates, annually it’s likely a homeowner will pay more for using a heat pump. The biggest variable is weather. According to manufacturers, heat pumps operate optimally at approximately 45-50 degrees. As it gets cooler, the efficiency of the heat pump declines. When the temperature drops below 20 degrees, heat pumps have a difficult time producing heat. In Minnesota, that leaves a relatively few number of days for effective operation.

When comparing costs to benefits, builders should add between $1,000 and $1,600 for heat pump equipment costs and factor in a manufacturer warranty period of 5 to 10 years compared to 20 years for a furnace. It is highly likely that instead of enjoying a payback, the total equipment and operating costs for a heat pump will cost significantly more than using a furnace alone.

Electric prices are expected to rise. Also keep in mind that electric utilities nationwide are projecting significantly increased costs in the near future. Electric generation has not kept pace with the demand and now the industry needs to build infrastructure. Great River Energy, the wholesale provider to area co-ops, and Xcel Energy have both reported expected increases. Local cooperatives have announced projected increases of as much as 20 percent in the next five years. Higher electric costs would make heat pumps even less attractive.

Natural gas is a better choice for the environment.

Clean-burning natural gas is a much better environmental choice than electricity. Electricity is a secondary fuel which means it must be produced from another energy source such as coal, uranium, natural gas or oil. As a result, the delivery of natural gas is 90 percent efficient, compared to only 27 percent for electricity.

Usage and installation issues for heat pumps are drawbacks.

A major disadvantage with heat pumps is that when there is a 2 degree differential between the room temperature and thermostat, both the furnace and heat pump will operate, reducing potential heat pump energy savings. This greatly reduces the effectiveness of programmable thermostats, a key energy saving tool.

Additionally, to operate effectively, the heat pump must be installed above the snow line. This can make them awkward to install and can create an aesthetic issue.

Natural gas furnaces are a great choice for value, comfort and convenience.

Overall, using a natural gas furnace without a heat pump, is the most economical and comfortable choice. Choosing high-efficiency air conditioners and natural gas furnaces with multiple fan speeds are an even better choice.

If you have additional heating questions or would like to discuss equipment options, contact your CenterPoint Energy trade ally representative.

Send message to:
Telephone: Trade Ally Representatives:
612-321-4484 or toll free: (1-800-234-5800, ext. 4484)

New Construction Hotline:
612-321-5123 or toll free: (1-800-342-4166)

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