What Are The Average Heat Pump Running Costs – 2024

Introduction – The Heat Pump Is The Most Efficient Way To Heat A House

[Update: 1/20/2024, we updated the section on calculating costs with the latest electricity rates]

Heat pumps are one of the most efficient ways to heat and cool a house and are a recurring theme on ShrinkThatFootprint. They can be coupled with solar thermal heating for even greater efficiency.

Below we provide a fairly average value for the annual heat pump running cost (most of it expended in winter), and also a step-by-step method to calculate the cost. We estimate the figures for the US and the UK. To make the story short, it will cost between $345 – $1862 to use a heat pump per year. To understand where you home might land, take a look at our analysis below. In a separate article we ask a more useful question regarding whether heat pumps really save money.

The compressor unit of a heat pump is mounted outside the house

The basic principle behind a heat pump is that it extracts heat from one medium (air, water, or ground) and transfers it to another (air, water, or underfloor heating system). The most common is the air source heat pump. Heat pumps are, therefore, an alternative to traditional gas or oil boilers.

Many homeowners turn to heat pumps as an alternative to traditional heating systems, especially in areas where natural gas is unavailable or too expensive.

Heat pumps extract heat from the air outside (or the ground) and then transfer that heat into your home, which can significantly lower heating costs. However, they are more expensive than a standard oil or gas boiler system. Several types of heat pumps are on the market today, including air-source and ground-source units.

Required Cost Of Heating Depends On Climate

Not surprisingly, the cost of heating varies according to the climate with colder places requiring more BTU of heat per square foot. Here we break down the US into three regions and give example states of each.

Climate TypeBTU of heat Per Square Foot
Cold (Minnesota, North Dakota, Maine, Alaska)50
Moderate (New York, Virginia, Oregon)35-40
Warm (Florida, Texas, Southern California)20-30

Basically the cold places need about 2-3 times more energy than warm places to maintain comfortable temperatures all year around.

Required Cost Also Depends On Efficiency

We have discussed the Coefficient of Performance (COP) that measures efficiency, primarily used for heat pumps and not directly applicable to other types of heating systems like natural gas furnaces, electric baseboard heaters, and oil furnaces. Nevertheless if we put these on equal footing the COP for the different heating systems looks like this. Heat pumps come up on top.

Heating SystemApproximate COP
Heat Pump2.0 – 4.0
Natural Gas Furnace0.8 – 0.98
Electric Baseboard1.0
Oil Furnace0.8 – 0.9

This is not enough to determine costs. Even though both electric baseboard and efficient gas furnaces have COP near 1, the cost will depend on the fuel source. For baseboard, that unit is the kWh and for natural gas it’ll be in BTUs of cubic feet of gas.

Head-to-Head Comparison to Heat Pump vs Other Heating Costs

We’ve covered that before here – we show that a head-to-head comparison of 15 different heating systems that heat pumps beat natural gas furnace, electric baseboard, and oil furnace on a cost basis.

The location of that test was in Maine, one of the colder places in the continental US. Bear in mind that energy prices have gone up, mostly due to natural gas and oil prices rising after Russia cut off natural gas supplies to Europe and OPEC lowered production inexplicably, ostensibly due to reduced demand (which is nonsense).

Cold Climate – Heat Pump Running Cost

Heating SystemAnnual Cost (Cold Climate)
Heat Pump$1,862
Natural Gas Furnace$2,536
Electric Baseboard$5,118
Oil Furnace$5,302

Warm Climate – Heat Pump Running Cost

Heating SystemAnnual Cost (Warmer Climate)
Heat Pump$345
Natural Gas Furnace$470
Electric Baseboard$949
Oil Furnace$983

The true cost of running a heat pump in the United States depends on several factors, including the size and efficiency of the unit, local electricity prices, and the climate. Looking at the Maine numbers, it’s not hard to square that with an average heat pump annual cost of around $600 to $2,000. However, this can vary significantly depending on these factors. For example, a highly efficient unit in a mild climate may only cost around $300 per year, while a less efficient unit in a cold climate could cost upwards of $3,000 per year.

In addition, using the heat pump for both heating and cooling can also increase operating costs. Ultimately, it is important to consider these variables when choosing a heat pump for your home or business. Seek out energy-efficient models and consult with experts on the best options for your specific location and needs. By being informed and strategic about your heat pump selection, you can save money on energy costs in the long run.

Heat Pump Vs Electric Heat Cost: 2-3 Times Cheaper

Looking at the table provided, we see a clear difference in the costs of operating a heat pump compared to an electric baseboard heating system. In both cold and warm climates, heat pumps appear to be a significantly more cost-effective option for heating a home.

For example, in a cold climate, the annual cost of operating a heat pump is $1,862, compared to a significantly higher cost of $5,118 for an electric baseboard system. Similarly, in a warm climate, a heat pump costs $345 annually, while an electric baseboard system costs $949.

This suggests that, despite potential differences in upfront costs or installation, a heat pump might offer more economic efficiency over time, or about 2 to 3 times cheaper than electric heat.

It’s worth noting that a heat pump functions by transferring heat from the outside environment to the inside, making it more efficient, particularly in mild climates. Meanwhile, an electric baseboard heater generates heat directly from electricity which is very inefficient.

Factors Determining Heat Pump Running Costs

Heat pump technology offers an energy-efficient solution when it comes to heating and cooling your home. However, heat pump running costs can vary significantly depending on a few factors.

First, the size and layout of your home will determine how much energy the heat pump needs to use to maintain a comfortable temperature.

Second, depending on where you live, the cost of electricity may fluctuate seasonally or over time.

Third, proper maintenance ensures that your heat pump continues to run efficiently and doesn’t require expensive repairs.

In other words, you can manage heat pump running costs by choosing the right system for your home’s needs and keeping up with routine maintenance. Heat pumps are a cost-effective option for heating and cooling your home compared to traditional HVAC systems.

Below, let’s go through a very concrete implementation of these ideas and calculate the heat pump running costs for your home.

Step-By-Step To Calculate Your Heat Pump Running Costs

The easiest way is to ask an energy expert to estimate for you what are the running costs for a heat pump. But if you want to cross check the numbers, you can calculate it yourself too.

To calculate your specific heat pump running costs, you will need to know three numbers.

Step 1: You will need to know the amount of heat you need over the year. Ask your utility company, or a neighbor, for what electric baseboard heating would cost equivalently. Let’s consider a cold scenario: heating costs 27,000 kWh over the year, and a warm scenario: heating costs 5,000 kWh over the year.

For the former one would report $3510 total and for the latter $11500. The range of 5,000-27,000 kWh is pretty standard so you can use that if you’re not sure. As you do your research, you will sometimes find numbers given in BTUs. It’s totally possible to convert BTUs to kWhs by dividing BTUs by 3412 to get the kWh. Conversely, it’s possible to convert kWhs to BTUs by multiplying kWhs by 3412. For the cold climate a house would use 92 MBTU (million BTUs) that is equivalent to 27,000 kWh, and the warm climate would use 17 MBTU.

Step 2: You will need to know the HSPF rating of your heat pump. HSPF stands for Heating Seasonal Performance Factor, and it is a measure of the efficiency of a heat pump. It is the ratio of the total space heating provided by the heat pump over a normal heating season, divided by the total energy consumed by the heat pump over the same period. The higher the HSPF rating, the more efficient the heat pump is. From that, you can calculate the COP, which is the coefficient of performance.

The COP is simply 0.29 times the HSPF. So if you’re heat pump has HSPF 10, then the COP is 2.9. To us, the COP is super easy to understand. The COP tells you how much equivalent kWh of heat is moved into the home per kWh of electricity used by the heat pump. So if you need 27,000 kWh of heat (as above), then it will cost 9310 kWh for the heat pump to move it; similarly 1724 kWh of heat is needed for the warm climate version above.

Step 3: You need to know the cost of electricity. Prices increased from 2022-2023 but became stabilized as inflation subsided.

Prices are given by dollars per kWh. The average price of electricity in the US as of 2024 is $0.17 per kWh, in comparison to a few years ago when it was $0.13 per kWh over the entire US. To get the cost, you multiply the electricity required from Step 2 by the cost of electricity per kWh. For the numbers we just used, it’s 9310 kWh x $0.20 per kWh, or $1862 in the cold climate, and 1724 kWh x $0.20 per kWh = $345 in the warm climate.

You’re done! We just calculated the heat pump (with HSPF of 10) running costs for a fairly typical house with cold winters (that needs 27,000 kWh of heat), at the electricity price of $0.20 per kWh. Most of that you will be paying during the winter months from November to March.

Heat Pumps Work Well in Low Temperatures – Invention Of Cold Climate Heat Pumps

We’ve already covered this at ShrinkThatFootprint before. Before the early 2000s, heat pumps were associated with mild climates because they became inefficient in cold climates.

The severe winters of Alaska, the Midwest (Minnesota, North Dakota), and the Northeast of the USA (New England) meant that the heat pumps became poor at pumping heat at the lowest temperatures (for example less than 0 Celsius or 32 Fahrenheit).

With the development of “Cold Climate Heat Pumps”, that lower limit has been pushed down to less than -13 F meaning that most of the time, the heat pump is excellent.

How Much Do Heat Pumps Cost To Run In The UK In 2023

The cost to run a heat pump in the UK varies depending on several factors, including the size and efficiency of the unit, the cost of electricity, and the climate. UK houses tend to be smaller, but the electricity rates have become higher. In the past, on average, homeowners expected to pay around £500-700 per year to operate their heat pump.

In the most up-to-date situation of 2022, we can estimate from official data that the average UK house heating needs about 24,000 kWh of heat. A heat pump with HSPF of 10 would therefore need 8,275 kWh of electricity to provide this amount of heat.

The cost of electricity is $0.41 per kWh (or £0.34 per kWh in pence Sterling). The cost would be $3,393 (£2,808 as of Dec 2022). This represents double the amount for our US figures and the difference is mostly coming from the much higher electricity costs although heating requirements are about 10% lower in the UK.

How Much Do Heat Pumps Cost To Run In Australia In 2023

For Australia, averaging all factors, heat pump running costs are $451 to $1418. This is a big range so we’ll explain it for you to make an informed decision on whats the right number for you. We take our figures from Victoria’s Sustainability site. In Australia, heat pumps are known as “reverse-cycle air conditioners”, which is entirely accurate. A refrigerant that is cycled from outside to inside repeatedly expands and contracts to expel or absorb heat indoors. The Victoria analysis considers a Melbourne climate and advises adjustments of the following form:

To estimate the running cost for a cold climate, such as Ballarat, multiply these figures by 1.5. For a warm climate, such as Mildura, multiply these figures by 0.8.

Sustainability Victoria

Figures are given in Australian dollars.

Heat Pump TypeEnergy Star RatingHouse SizeAnnual Cost (AU$)
Multi-split reverse-cycle air conditioner2.5100m² (1076 sq ft)$451
Ducted reverse-cycle air conditioner (unzoned)2.0100m² (1076 sq ft)$902
Multi-split reverse-cycle air conditioner2.5160m² (1722 sq ft)$722
Ducted reverse-cycle air conditioner (unzoned)2.0160m² (1722 sq ft)$1308
Multi-split reverse-cycle air conditioner2.5220m² (2368 sq ft)$993
Ducted reverse-cycle air conditioner (unzoned)2.0220m² (2368 sq ft)$1418
Heat Pump Running Costs In Australia

The Benefits Of Using A Heat Pump

To heat and cool your home are numerous. They help lower your energy costs compared to traditional radiative heating systems and are also more energy-efficient, and require less maintenance. However, a few things to consider when determining how much it will cost to run a heat pump in the UK.

One important factor is the size of the unit itself, as larger units may require more electricity to operate effectively. Additionally, seasonal variations in the cost of electricity can impact overall running costs. Finally, proper maintenance is key for ensuring that your heat pump continues to run efficiently and doesn’t require expensive repairs over time.

Overall, investing in a high-efficiency heat pump for your home can effectively save money and reduce your carbon footprint. Whether you live in an area where natural gas is unavailable or simply want to lower your energy bills, a heat pump can be a smart choice for heating and cooling your home.

Do Heat Pumps Use A Lot Of Energy?

As with any heating system, a heat pump’s energy usage depends on several factors. The size and efficiency of the unit, the climate and weather patterns in the area, and how well the heat pump is maintained all affect its energy usage. However, heat pumps generally tend to be much more energy efficient than electrical heating, natural gas or oil heating on an amount-of-heat-per-kWh-used basis.

Heat pumps transfer heat from one area to another rather than generating it through burning fuel. This allows them to use significantly less energy and can lower homeowners’ electricity bills. A heat pump can provide cost-effective heating while reducing your carbon footprint with proper maintenance and usage.

Ultimately, whether or not heat pumps use a lot of energy is highly variable and dependent on individual circumstances. But overall, they are a savvy choice for cost-conscious, environmentally-conscious individuals looking for an efficient heating solution.

Tips For Reducing The Cost Of Running A Heat Pump 

If you have a heat pump in your home, you may be looking for ways to lower your energy bills. Here are five tips for reducing the cost of running your heat pump: 

1) Make sure the heat pump is properly sized for the space. A unit that is too small will have to work harder to heat or cool the space, leading to higher energy costs. 

2) Keep the area around the outdoor unit clear, allowing room to circulate air properly. 

3) Schedule regular maintenance with a qualified technician to ensure optimal performance and efficiency. 

4) Close off rooms that aren’t being used and adjust the thermostat when no one is home. 

5) Invest in insulation and weatherproofing to minimize the loss of heated or cooled air from your house.

By following these tips, you can keep your energy bills low while staying comfortable in your home.


In conclusion, a heat pump may be the right choice if you are looking for an energy-efficient way to heat and cool your home. There are many benefits to using this type of heating system, including lower energy costs, reduced maintenance requirements, and improved environmental sustainability. However, some factors can impact the cost of running a heat pump, such as unit size and seasonal variations in electricity prices. With proper maintenance and careful use, however, a heat pump can help you save money on your heating bills while reducing your carbon footprint at the same time.

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