New electric furnace + new AC
- Installed
- $9,400$6,800–$12,200
- Energy per year
- $1,130Baseline
- 15-year total
- $26,400
- Payback
- Baseline
Heat pump or new furnace and AC? For City of Huntsville customers
For City of Huntsville customers in Alabama, on the utility's current tariff, local weather.
Quick answer · updated
As of November 2026, for a typical 1,800 sq ft electrically heated home on City of Huntsville electricity rates in Alabama that needs a new furnace and AC: A heat pump comes out ahead here even with a high quote: about $9,000 less than a new furnace and AC over 15 years at typical prices, and $660 a year less to run.
Electricity
12.6¢/kWh
-23% vs. Alabama average
Heating fuel
Electric
Most homes here heat with electricity (74%)
Climate
2,831
heating degree days · Huntsville Intnl AP 72323
Rebates
Not checked
not yet researched in Alabama
Our estimate for this home
A heat pump comes out ahead
A heat pump comes out ahead here even with a high quote: about $9,000 less than a new furnace and AC over 15 years at typical prices, and $660 a year less to run.
Total cost over 15 years
Installed cost plus energy, year by year. Hover or tap the chart to compare.
- New electric furnace + new AC
- Heat pump (replaces both)
- High-efficiency cold-climate heat pump
Show as a table
| Option | Installed cost (typical, range, after rebates) | Energy cost per year | 15-year total | Payback vs. like-for-like |
|---|---|---|---|---|
| New electric furnace + new AC | $9,400 $6,800–$12,200 |
$1,130 |
$26,400 | Baseline |
| Heat pump (replaces both) Lowest 15-year cost | $10,300 $7,200–$13,500 |
$470 saves $660/yr |
$17,300 | 1.4 years |
| High-efficiency cold-climate heat pump | $13,500 $9,900–$17,900 |
$360 saves $770/yr |
$18,900 | 5.3 years |
What this is based on
- Electricity: Schedule RS - Residential tariff for City of Huntsville, effective 2026-02-01, from the U.S. Utility Rate Database, applied tier by tier to the extra kWh.
- Weather: Huntsville Intnl AP 72323 (2,831 heating and 2,107 cooling degree days a year, 1991-2020).
- Heating fuel prices (EIA): gas $1.67/therm (Alabama, average of the last five winter months); propane $3.59/gallon (Alabama average this heating season); heating oil $6.15/gallon (U.S. average this heating season).
- Homes in City of Huntsville's Alabama area heat with electricity 74%, gas 21%, propane 4% (U.S. Census Bureau, American Community Survey 2019-2023). The calculator starts with electricity; pick yours above.
- Alabama HVAC installer wages are 21% below the U.S. median (BLS), so installed prices are scaled by 0.90.
- Energy use for heating and cooling:
- New electric furnace + new AC: 10,131 kWh a year for heating and cooling
- Heat pump (replaces both): 4,280 kWh a year for heating and cooling
- High-efficiency cold-climate heat pump: 3,327 kWh a year for heating and cooling
Rebates
- We haven't checked heat pump rebates in Alabama yet, so these numbers leave them out. Utility and state programs can take thousands off a heat pump: ask City of Huntsville and your contractor what's available. Each dollar of rebate adds a dollar to the quote gap a heat pump can carry.
How City of Huntsville's rates change the answer
City of Huntsville's electricity price for a typical home is 23% below the Alabama average ($0.126 vs. $0.165 per kWh). A heat pump moves your heating from gas, propane or oil to electricity, so the electricity price is the biggest single factor: calculators that use a state average can get the answer wrong for your utility. At these prices, a heat pump is cheaper to run than an electric furnace for a typical home here.
Common questions
Is a heat pump worth it for City of Huntsville customers?
A heat pump comes out ahead here even with a high quote: about $9,000 less than a new furnace and AC over 15 years at typical prices, and $660 a year less to run. This is for a typical 1,800 sq ft home with average insulation that heats with electricity and needs both a new furnace and AC; change the details in the calculator above for your home.
How much does a heat pump cost to run on City of Huntsville's rates?
About $470 a year for heating and cooling with a heat pump (4,280 kWh), compared with about $1,130 a year for a new furnace and AC, for a typical 1,800 sq ft home with weather like Huntsville Intnl AP's.
How much does a heat pump cost to install in Alabama?
Our typical installed price for a heat pump in Alabama is about $10,316 (range $7,176 to $13,455), against about $9,419 for a new furnace and AC. Prices are published study ranges scaled for home size and Alabama installer wages; rebates in Alabama have not been checked yet, so they are not included. Always compare real quotes.
What electricity price does this use?
Electricity: Schedule RS - Residential tariff for City of Huntsville, effective 2026-02-01, from the U.S. Utility Rate Database, applied tier by tier to the extra kWh.
How we calculate this
Heating and cooling need
Your home's yearly heating and cooling need comes from 1991-2020 NOAA climate normals for the nearest weather station, scaled by floor area and insulation level. If you know last winter's gas use, compare it with the therms in the energy-use list above.
Heating fuels
Choose the fuel your furnace burns: gas, propane, heating oil or electricity. Gas uses the state's average residential price over the last five winter months; propane and heating oil use the U.S. Energy Information Administration's weekly residential prices for this heating season (state, regional or U.S. average, as available), converted by heat content (91,500 Btu per gallon of propane, 138,500 per gallon of oil). An electric furnace is priced through the same electricity rates as the heat pump. The starting fuel is the most common furnace fuel in the utility's area (U.S. Census Bureau, American Community Survey).
Equipment efficiency
New gas or propane furnace 95% AFUE, new oil furnace 85%, electric furnace 100%; new AC SEER2 13.4; standard heat pump SEER2 15.2 / HSPF2 7.8; high-efficiency cold-climate heat pump SEER2 21.5 / HSPF2 10.6. Heat pump efficiency falls as it gets colder, and in cold months part of the heat comes from backup electric strips (or your old furnace, if you keep it). Existing equipment is assumed to be 15-20 years old: an 80% gas or propane furnace, a 78% oil furnace or a SEER2 9.5 AC.
Installed costs
Installed prices vary a lot, so we show a typical price and a range for a home of about 1,800 sq ft with existing ductwork, scaled for larger or smaller homes: furnace and AC together $9,000–$14,000; furnace alone $3,800–$7,000; AC alone $4,500–$9,000; standard heat pump $8,000–$15,000; high-efficiency cold-climate heat pump $11,000–$20,000; electrical panel upgrade, if needed, $1,500–$4,000. These are national figures drawn from published studies and program data (NESCAUM / Energy Solutions, Heat Pumps in the Northeast and Mid-Atlantic: Costs and Market Trends (October 2024); Rewiring America, Upfront cost of home electrification (March 2024); EIA, Updated Buildings Sector Appliance and Equipment Costs and Efficiencies (2023)). The most useful number here is how much more a heat pump can cost than a like-for-like quote and still come out ahead: get quotes for both and compare.
Labor and rebates
Half of each installed price is treated as labor and scaled by the state's median HVAC installer wage relative to the U.S. median (U.S. Bureau of Labor Statistics). Listed rebates are subtracted when the box is ticked; per-ton rebates assume about one ton of capacity per 600 sq ft. Rebates change often and have eligibility rules, so confirm with the program before you buy.
Not included
Financing, maintenance (similar for all options), local town rebates, and changes in energy prices over time.