# Heat pump vs. gas furnace and AC on Otter Tail Power rates (MN)

> **Quick answer** (updated 2026-11-10): As of November 2026, for a typical 1,800 sq ft gas-heated home on Otter Tail Power electricity rates in Minnesota that needs a new furnace and AC: It depends on your quotes. A high-efficiency cold-climate heat pump saves about $190 a year to run, so it comes out ahead over 15 years if its quote is no more than $2,900 above the quote for a new furnace and AC.

- Verdict: **depends on quotes**
- Heat pump yearly running cost vs. a new gas furnace and AC: $190 less
- Break-even quote gap: the heat pump wins over 15 years if its quote is no more than $2,900 above the like-for-like quote
- Interactive calculator (change size, insulation, fuel, prices, ZIP): https://meterwise.app/mn/otter-tail-power/heat-pump-vs-furnace/
- Machine-readable data: https://meterwise.app/data/v1/utilities/mn/otter-tail-power.json

## Typical home: costs by option

1,800 sq ft, average insulation, heating with gas, furnace and AC both need replacing.

| Option | Installed (typical) | Installed range | Rebates | Energy per year | 15-year total |
|---|---|---|---|---|---|
| New gas furnace + new AC | $12,950 | $10,130–$15,760 | – | $1,060 | $28,900 |
| Heat pump (replaces both) | $12,950 | $9,010–$16,890 | – | $1,370 | $33,500 |
| High-efficiency cold-climate heat pump | $16,890 | $12,390–$22,520 | – | $870 | $30,000 |

## Inputs

- Electricity: Otter Tail Power's average residential price in MN (EIA), $0.113/kWh; the winter price of extra kWh is estimated at $0.097/kWh. Enter your own rate for a closer answer. Typical-bill price 11.3¢/kWh, -30% vs. the Minnesota average of 16.3¢/kWh.
- Weather: Ottertail, 9,147 heating and 416 cooling degree days a year (NOAA 1991-2020 normals).
- Gas: $1.04/therm (Minnesota winter average, EIA); propane $2.02/gallon; heating oil $5.84/gallon.
- Homes in this utility's Minnesota area heat with gas 37%, propane 28%, electricity 26%, other 6%, heating oil 4% (U.S. Census Bureau ACS 2019-2023).
- Installed prices: published study ranges, scaled for home size and Minnesota HVAC installer wages (BLS).
- Rebates: not yet checked in Minnesota, so not included.

## Common questions

**Is a heat pump worth it for Otter Tail Power customers?**
As of November 2026, for a typical 1,800 sq ft gas-heated home on Otter Tail Power electricity rates in Minnesota that needs a new furnace and AC: It depends on your quotes. A high-efficiency cold-climate heat pump saves about $190 a year to run, so it comes out ahead over 15 years if its quote is no more than $2,900 above the quote for a new furnace and AC.

**How much does a heat pump cost to run on Otter Tail Power's rates?**
About $870 a year for heating and cooling with the High-efficiency cold-climate heat pump option, against $1,060 for New gas furnace + new AC.

**What electricity price does this use?**
Electricity: Otter Tail Power's average residential price in MN (EIA), $0.113/kWh; the winter price of extra kWh is estimated at $0.097/kWh. Enter your own rate for a closer answer.

## Method

Heating and cooling need from local weather, floor area and insulation; each option's efficiency (heat pumps lose
efficiency in the cold and use backup heat in cold months) turns that into kWh and fuel; electricity is priced
through the utility's tariff; installed costs come from published ranges. Full method: https://meterwise.app/about/index.md

Estimates for a typical home, not a quote or financial advice.

## Other Minnesota utilities

- [Connexus Energy](https://meterwise.app/mn/connexus-energy/heat-pump-vs-furnace/index.md)
- [Beltrami Electric Coop, Inc](https://meterwise.app/mn/beltrami-electric-coop-inc/heat-pump-vs-furnace/index.md)
- [BENCO Electric Cooperative](https://meterwise.app/mn/benco-electric-cooperative/heat-pump-vs-furnace/index.md)
- [Crow Wing Cooperative Power & Light Comp](https://meterwise.app/mn/crow-wing-cooperative-power-and-light-comp/heat-pump-vs-furnace/index.md)
- [East Central Energy](https://meterwise.app/mn/east-central-energy/heat-pump-vs-furnace/index.md)
- [Federated Rural Electric Assn](https://meterwise.app/mn/federated-rural-electric-assn/heat-pump-vs-furnace/index.md)
- [Freeborn Mower Electric Cooperative](https://meterwise.app/mn/freeborn-mower-electric-cooperative/heat-pump-vs-furnace/index.md)
- [Heartland Power Coop](https://meterwise.app/mn/heartland-power-coop/heat-pump-vs-furnace/index.md)
- [Itasca-Mantrap Co-op Electrical Assn](https://meterwise.app/mn/itasca-mantrap-co-op-electrical-assn/heat-pump-vs-furnace/index.md)
- [Lake Country Power](https://meterwise.app/mn/lake-country-power/heat-pump-vs-furnace/index.md)
- [Mille Lacs Energy Cooperative](https://meterwise.app/mn/mille-lacs-energy-cooperative/heat-pump-vs-furnace/index.md)
- [ALLETE, Inc.](https://meterwise.app/mn/allete-inc/heat-pump-vs-furnace/index.md)
- [All Minnesota utilities](https://meterwise.app/mn/index.md)

## Cite this page

MeterWise, "Heat pump vs. gas furnace and AC on Otter Tail Power rates (MN)", updated 2026-11-10, https://meterwise.app/mn/otter-tail-power/heat-pump-vs-furnace/. Data licensed CC BY 4.0.