Heating Your Home 101

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What Is a Furnace and How Does It Work?

What Is a Furnace and How Does It Work?
11 mins

Class 1 of 5


Single-Stage, Two-Stage and Modulating Furnaces

Single-Stage, Two-Stage and Modulating Furnaces
6 mins

Class 2 of 5


What's an AFUE Rating?

What's an AFUE Rating?
4 mins

Class 3 of 5


Heat Pump vs. Furnace: Which System Is Right For You?

Heat Pump vs. Furnace: Which System Is Right For You?
10 mins

Class 4 of 5


How Much Does a New Furnace Replacement Cost in 2024?

How Much Does a New Furnace Replacement Cost in 2024?
9 mins

Class 5 of 5

Heat Pump vs. Furnace: Which System Is Right For You?

We look at the pros and cons of furnaces and heat pumps. If you’re a homeowner trying to make a decision to buy/replace one or the other, we examine the factors that might come into that decision.

Heat Pump vs. Furnace: Which System Is Right For You?

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Bryan Carnahan


July 8th, 2021

Both heat pumps and furnaces can heat your home, but they do it in very different ways. When it comes to heating your home, you have options.

Unless you’re an HVAC pro, understanding how to choose the right heating system can feel overwhelming. Not to worry. Here at Fire & Ice, our experts have hundreds of years’ experience in the HVAC industry. By leveraging that experience, we hope to answer questions as thoroughly as possible.

In this article, we’ll present information to help you make the right decision. Or if you’re not ready to make a major purchase, you’ll at least have an understanding of heat pumps and furnaces.

We’ll break this down by discussing various topics:

  • What Is a Heat Pump?
  • What Is a Furnace?
  • What Is a Dual Fuel System?
  • Variable-Speed Fans
  • If You’re Looking to Replace Your Furnace or Heat Pump
  • Why You Might Not Want a Heat Pump
  • Which Will Last Longer: Electric or Gas?
  • What’s the Best Option for Ohioans?
  • What Will a New Heat Pump or Furnace Cost Me?
  • Next Steps

Ready to find out which system might be right for you?

What is a Heat Pump?

In the summer, a heat pump is an AC. That’s it: an air conditioner with a reversing valve that automatically switches the unit from producing heat to producing cold.

In the winter, your heat pump is a furnace.

When it’s cold, the unit’s reversing valve switches automatically, which means the heat pump squeezes the heat out of the outside air and transfers it to the inside of your home.

Related material: How Much Does a Heat Pump Cost to Replace in 2021?

If it’s an all-electric HVAC system, the heat pump’s warmth can be complemented by heat strips inside the furnace. Heat strips are wire elements in your air handler that are heated by electricity, which in turn heat the air that flows over them.

The heat is pushed throughout the ductwork by an air handler or a furnace’s blower, and cool air is sucked into the air handler through return ducts to be warmed.

What Is a Furnace?

Two major types of furnaces provide warmth during the winter months: gas and electric.

Probably the most common and cost-efficient due to the low cost of natural gas, gas furnaces need to have a gas line run into the home to fuel the system.

A gas furnace is a combustion appliance. You have a gas line (with a gas valve), an igniter, and different systems for capturing, separating, and spreading heat through your home.

Related material: How Much Does a New Furnace Replacement Cost in 2021?

The heat exchanger is one of the core components that allows the unit to extract heat for your home. Some high-efficiency gas furnaces even have two heat exchangers, which allows them to extract more heat with less byproduct.

Regardless of how many heat exchangers you have, the byproducts of combustion will be vented out of a chimney flue. In a high-efficiency gas furnace, the exhaust will need to travel out of the PVC pipe.

Electric furnaces are the main alternative to gas-based systems. They use electric power to generate heat and derive their warmth through heat strips.

It’s basically like a toaster oven inside your electric furnace. These strips have an electric charge to them, air blows through them, and that heats the house.

What Is a Dual Fuel Heating System?

A dual fuel heating system includes both a heat pump and a furnace working in tandem. Dual fuel systems blend the best features of a gas furnace together with a heat pump. As a common example, the heat pump will be powered by electricity, and provide both cool and warmth. Providing an additional level of warmth would be the furnace, which could be powered by a combustible fuel: natural gas, propane, or even oil.

If you have a heat pump paired with a propane furnace, most of the time you can just use the gas furnace for heat - if the propane is cheap. But if propane is expensive, you can use both of them. The heat pump would be the primary source of heating, and the propane furnace is the emergency source of heat once the outside temperature dips below 40 degrees or so.

A dual fuel heating system.

Variable-Speed Fans

There are three types of fans:

  • Single-stage
  • Two-stage
  • Variable-speed

Basic furnaces have a single-stage fan (also known as a blower)., meaning it’s either “on” or “off.” It either works at 100% or zero.

Two-stage motors will usually have a 100% setting, then another that’s lower (about 70% power). This provides additional control and comfort. They’re a nice middle ground between low-end and high-end efficiency and the initial cost and will save you on energy costs compared to a single-stage.

Think of it like gas mileage. It’s more efficient to drive at slower speeds than higher speeds, and slamming the pedal can produce long-term wear and tear on your car. The benefits of having a second, slower stage is somewhat similar in terms of efficiency and system usage.

Variable-speed units can have hundreds of individual speed settings. This offers a very granular level of control over your heating and cooling.

The same goes for heat pumps. They also come with the option of three types of fans: single-stage, two-stage, and variable-speed.

A variable-speed air conditioner can have up to 700 distinct compressor settings that correspond to varying levels of airflow. Variable-speed air conditioners are going to run the most efficiently, and will generally be the quietest as well, since they’re often operating as low as 40% of their maximum power capacity.

You’re also going to save the most on energy costs and have the greatest degree of control over the temperature in your home.

The primary downside is the initial cost. The systems don’t come cheap, even though they largely make up that cost in the long run.

If You’re Looking to Replace Your Furnace or Heat Pump

If you’re wondering about whether to replace your furnace or invest in a heat pump, consider that if your system is all-electric, you have little choice. You probably have to replace them both, because the indoor and outdoor units on electric must rate.

Rating means the settings on the furnace fan need to match the available settings on your air conditioner, or the AC won’t function efficiently. This is also referred to as “equipment matching.” If they are mismatched, they probably won’t work well together because they’re not communicating well.

The blower motor in the furnace is what provides airflow for the entire system, including air conditioning. This motor needs to be able to match the options in the air conditioner for the two to work well together. So if you have an air conditioner with hundreds of speeds (variable-speed) and a blower motor that can only turn on or off (single-stage), you’re wasting the vast majority of your air conditioner’s potential.

On a gas system, you may never have to replace them both, because they are mutually exclusive. But on an all-electric system, 99% of the time you replace them together. The indoor coil and the outside condensing unit must be similar and must also rate on the AHRI (Air Conditioning, Heating & Refrigeration Institute) for the warranty to cover them.

What this boils down to is that you need to understand your options, and how those relate to price. If you have a variable-speed air conditioner and aren’t prepared to replace it as well, you’ll need a compatible furnace, which both limits your options and puts you squarely in a higher (initial) price category.

Conversely, if you’re looking to upgrade to a variable-speed furnace, but your full system supports only single-stage, you’ll be either sacrificing efficiency, or you won’t be able to upgrade to the variable-speed unless you replace the entire system.

Why You Might Not Want to Buy a Heat Pump

A heat pump has dual purposes. It heats and cools. Why wouldn’t you want one? Two main reasons:

  • The initial cost of a heat pump is going to be higher than a comparable air conditioner.
  • The efficiency of a heat pump’s heating is going to suffer in colder climates. Here in Columbus, Ohio, for example, pairing it with an electric furnace is almost a necessity.

That’s not to say heat pumps aren’t good solutions. When paired with furnaces properly, they can provide extremely efficient cooling and heating. But the context matters.

If you live in Central Ohio, and we have a nice, mild winter, heat pumps will work pretty well. If we have bitter cold, the heat pump will struggle. It depends on the weather, and it depends on the type of heat pump. If it’s a single-stage, low-efficiency system - with a rating of 14 SEER, 16 SEER - it’s not very efficient in the winter.

(SEER stands for Seasonal Energy Efficiency Ratio. It’s calculated by the ratio of cooling produced by an air conditioner, divided by its energy usage in watt-hours. This ratio is calculated over the length of a typical cooling season. SEER ratings in modern air conditioners range from about 13 to 22. The higher the number, the greater the efficiency.)

If it’s single-stage and paired with an electric furnace, the heat strips in the furnace are going to have to come on when it’s near 40 degrees outside, which is not very efficient at all. The electric bills will skyrocket.

In the southern or southwestern United States, all-electric systems are much more popular due to the lower need for high-powered heating. You’ll find many more heat pumps there.

The low cost of gas makes an air conditioner coupled with a gas furnace system the best choice for the majority of customers we work with here in Central Ohio.

A furnace.

Which Will Last Longer: Electric or Gas?

Electric systems have to work harder than a gas system, so they will tend to have a shorter life. In the summer, the heat pump is working as an AC. In the winter, it’s providing heat. Any machine that has to work more tends to have a shorter lifespan.

We will always say, if it’s installed properly, the expected lifespan of your unit is 15-20 years. The big caveat to that is you need to have regular maintenance and change your filters, and you don’t push the units to ridiculous levels.

What’s a ridiculous level? It means in the summer you set your thermostat at 65 degrees, and in the winter, you like it at 78 degrees. That’s making your HVAC work too hard. But if your thermostat is set at 70 degrees year-round, then you shouldn’t have as many maintenance issues, and the units will last longer.

What’s the Best Option for Ohioans?

Furnaces are preferable over heat pumps in this part of the country, because we do get colder weather. Even the most efficient, multiple-stage heat pumps have their limits. Once the temperature dips to 40 degrees Fahrenheit or lower, the heat pump will struggle to produce heat. You’re going to need emergency heat from the furnace.

A heat pump, depending on its efficiency or type, can run when it’s 40, 30, 20 degrees outside. When it gets to the point where the heat pump is telling itself it needs to defrost and there's still a call for heat, something has to take over. That’s when the heat strips take over.

What Will a New Heat Pump or Furnace Cost Me?

The cost for replacing a gas or electric furnace ranges between $3,000 and $6,500. For an electric system, where you have to replace a heat pump, it can be anywhere between $4,900 and $12,500. Replacing both at the same time would save greatly on labor costs, but would obviously raise the price. At Fire & Ice, all of our estimates include the cost of equipment, labor, and any additional fees.

While it’s often the right choice to replace only your furnace, you can usually save money by pairing a furnace installation with an air conditioner installation.

Installing both at once generally reduces labor costs significantly compared to installing each separately. The savings can be thousands of dollars depending on the system being installed.

This also ensures that your equipment matches well, and synchronizes things such as warranties and maintenance.

If you’re close to replacement age for both your air conditioner/heat pump and furnace, this is probably your best bet. However, if only one requires replacing, half installations (furnace or AC only) are also common.

A good HVAC contractor should be able to walk you through each factor that affects the cost of your heat pump replacement. They should also proactively identify potential issues and recommendations that will affect the price of your system.

But above all, a good HVAC contractor will follow local building codes and manufacturer specifications to properly install your system.

Several factors can affect the price of an installation, such as the size of your home, filters and other indoor air quality products, and any modifications that are needed to be made during installation. There is no one-size-fits-all solution when it comes to HVAC systems, and these factors are taken into consideration when determining the cost.

Contractors must follow several key processes to ensure your system’s efficiency, comfort, safety, and life expectancy.

Failure to comply with any of the necessary processes required by local codes, the manufacturer, and industry standards can only lead to high energy bills, discomfort, and a drastically shortened life expectancy of the equipment.

It’s also important to note that many HVAC contractors don’t include labor or other fees in their estimates. As a result, you could end up paying more than you planned to.

We recommend always checking that your contractor’s estimate includes these additional costs.

Next Steps

The HVAC installation process is the single most important step for the safety and life expectancy of your system. It’s the difference between a long, efficient life and sub-par performance.

While you search for the best contractor for you, we encourage you to check out our HVAC contractor checklist below. We created this free, downloadable checklist based on HVAC industry best practices.

HVAC Contractor Checklist

And if you’re ready to speak with a sales representative, we’d love to help you find the best heat pump or furnace for you.

At Fire & Ice, we take the time to understand your needs and comfort concerns. This helps us recommend equipment that can customize your HVAC system to fit your preferences and lifestyle.

If you live in Central Ohio, click the “Schedule Estimate” button below to schedule your free, in-home estimate. We look forward to talking to you.

Meanwhile, here’s some related articles we hope you will find informative:

The Complete Guide to Home Furnaces

Heat Pumps 101: The Ultimate List of Heat Pump FAQS

HVAC Financing: A Complete Buyer’s Guide

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