Should I Switch My Gas Furnace to an Electric Heat Pump?

When you’re facing a gas furnace replacement, consider the advantages of replacing your system with an energy-efficient electric heat pump. You may qualify for huge rebates from the federal government to replace a gas furnace with an electric heat pump. Find out about the rebates available and decide whether an electric heat pump is right for your home.

Asking whether you should switch out your gas furnace for an electric heat pump may sound like a weird question unless you’re aware of the HVAC “electrification” provisions in the 2022 Inflation Reduction Act (IRA).

In certain states, the IRA now provides generous rebates to low- and moderate-income households for converting a gas home furnace to an electric heat pump. The act will also provide financial help to convert your home’s wiring and electrical system to accommodate the new heat pump in participating states.

As of the end of 2025, these states have some or all of the HEEHRA rebates available:

• Arizona
  

• California
  

• Colorado
  

• District of Columbia
  

• Georgia
  

• Indiana
  

• Maine
  

• Michigan
  

• New Mexico
  

• New York
  

• North Carolina
  

• Rhode Island
  

• Wisconsin
  

Check with your state’s website for more information about HEEHRA rebates now available if you live in these states.

We will continue to update this article as more information about HEEHRA rebates become available.

Low-income households can get a 100 percent rebate (up to $8,000) to install a new heat pump to replace a gas furnace.

Moderate-income households can receive a 50 percent rebate (also up to $8000) for a new heat pump to replace a gas furnace.

So, if your gas furnace is more than 10 years old and you plan on replacing it soon, consider taking advantage of rebates and tax credits by replacing your gas furnace with an energy-efficient heat pump if you qualify and you're in a participating state.

If you decide to make that HVAC system switch, you can also get rebates for replacing your other gas appliances (dryer, water heater and stove) with energy-efficient electric versions. Consider going all-electric, all at once and you could begin saving up to $500 per year on energy bills while also helping the environment by lowering carbon emissions.

Advantages of Replacing a Gas Furnace with a Heat Pump

In addition to financial incentives provided by the IRA rebates, you’ll also realize these benefits when replacing a gas furnace with a new energy-efficient heat pump.

Lower Carbon Emissions

Replacing your gas furnace with an electric heat pump can typically cut the carbon footprint of your HVAC system in half. A heat pump efficiently uses electricity as its sole source of power while a furnace uses both electricity and natural gas (or LP gas) to heat your home. The carbon emissions from using fossil fuels to heat your home are much higher than the emissions caused by using electricity.

Collectively, our country could cut carbon emissions by more than 100 million metric tons if everyone converted gas furnaces to heat pumps.

Energy Bill Savings

Typically, you can save more than $400 per year on energy bills by replacing a gas furnace with a heat pump. A heat pump is more energy efficient than a gas furnace because it uses expansion properties of refrigerant to heat your home instead of burning fuel to heat air.

If you install a heat pump and go all-electric in your home, you can kiss that monthly gas bill good-bye for good.

Less Health Risks

Because there’s no combustion involved with a heat pump, the unit is inherently safer than a gas furnace. Although built-in safeguards in furnaces help keep the risk of fire and carbon monoxide poisoning low, safety devices aren’t fool-proof. Accidents still happen.

According to the National Fire Protection Association, “heating equipment is a leading cause of fires in U.S. homes.” About 12 percent of heating equipment fires are caused by central heat systems.

You can reduce the risk of accidents by replacing your gas furnace with a heat pump.

How Do I Qualify for a Heat Pump Rebate?

The 2022 IRA provides heat pump rebates for low- and medium-income families in participating states.

How to Qualify for the 100 Percent Low-Income Heat Pump Rebate

According to the IRA, a low-income household qualifying for a 100 percent heat pump rebate up to $8,000 earns “less than 80 percent of the area median income.”

An easy way to find the median income for your area is to use the Fannie Mae Area Median Income Lookup Tool. For example, a household in a Chicago area earning less than $85,460 (80 % of $105,700 median income) would qualify for 100% of heat pump replacement costs up to $8000.

These are general income guidelines defined in the 2022 IRA bill. States will administer the 2022 IRA heat pump rebates that will begin in 2023, so you’ll need to work with your HVAC expert when replacing your gas furnace to determine the exact heat pump rebate that you qualify for (based on your household income).

How to Qualify for the 50 Percent Moderate-Income Heat Pump Rebate

A medium-income household as defined by the 2022 IRA is a one whose income “is not less than 80 percent and not greater than 150 percent of the area median income.”

Use the general guidelines described above to see if you’re considered a medium-income household and qualify for 50% of heat pump replacement costs up to $8,000.

I’m Ready--What Do I Do Now?

If you're in a participating state, check your state's website for information on getting HEEHRA rebates.

Modifying My Home’s Wiring When Installing a Heat Pump

You’ll very likely need to have an installer or electrician modify wiring and your home’s circuit breakers when replacing a gas furnace with a heat pump.

The good news is that the IRA provides these additional rebates for revising your home’s electrical system when replacing a gas furnace with a heat pump:

• Up to $4,000 for an electrical load service center (breaker box) upgrade.
• Up to $2,500 for electrical wiring upgrades.

As with the heat pump rebate, low-income households can get rebates up to the above limits to cover 100 percent of electrical system modifications. Moderate-income families can get rebates up to the above limits to cover 50 percent of electrical revisions.

The maximum amount of rebates allowed for an electrification project by the Inflation Reduction Act is $14,000.

When to replace your furnace with a heat pump

Deciding when to replace a furnace with a heat pump depends on several factors, primarily the energy efficiency and heating requirements of your home. The average lifespan of a gas furnace is 15 years. If your existing furnace is older, inefficient, or prone to frequent breakdowns, and you want to reduce utility costs and lower your carbon footprint, transitioning to a heat pump could be a wise choice. Heat pumps are particularly beneficial in moderate to mild climates. A heat pump works by efficiently extracting heat from one area and moving it to another. This makes a heat pump an ideal choice for replacing both a gas or electric furnace to warm your home in the winter, and an air conditioner for cooling your home in the summer.

Additionally, if you’re interested in renewable energy sources and maximizing year-round comfort, you may find the versatility and long-term cost savings of a high-efficiency heat pump system compelling reasons to make the switch from a traditional furnace system. However, it's crucial to consult with HVAC professionals to assess the specific needs of the property and ensure a seamless and appropriate transition.

How Can I Replace My Furnace with a Heat Pump?

Schedule an appointment with a Sears Home Services heating and cooling expert to replace an old heat pump with a new one.

Our Sears HVAC experts are knowledgeable about all rebates and tax credits that you can get when replacing your heating and cooling system. We’ll explain your options, so you can choose the HVAC unit that’s right for your house and budget.

Sears Home Services Can Help with Heat Pump Repair and Maintenance

When it comes to ensuring the smooth operation and longevity of your HVAC systems, Sears Home Services stands ready to provide top-notch service and expertise. With our specialized knowledge and experience in heat pump repair and maintenance, as well as proficiency in central air conditioning, furnace, and mini-split system repairs and maintenance, we are your one-stop solution for all HVAC needs. Our team of skilled technicians is committed to delivering exceptional service, addressing any issues promptly, and keeping your systems running efficiently.

At Sears Home Services, we understand that your HVAC system play a vital role in maintaining comfort and indoor air quality. That's why we strive to offer reliable and cost-effective solutions to enhance the performance of your systems and save you from unnecessary expenses. Whether it's a minor repair, routine maintenance, or a complete system overhaul, our professionals are equipped with the latest tools and techniques to handle every aspect of HVAC servicing.

Don't let HVAC problems disrupt your comfort and productivity. Reach out to us today and experience the unparalleled expertise and customer-centric approach that sets us apart.

Trust Sears Home Services for all your heat pump repair and maintenance, central air conditioning, furnace, and mini-split system needs. Let us be your trusted partner in keeping your HVAC systems running at their best, so you can enjoy a comfortable and pleasant environment year-round.