# Heat pump vs. gas furnace and AC on Austin Energy rates (TX)

> **Quick answer** (updated 2026-11-10): As of November 2026, for a typical 1,800 sq ft gas-heated home on Austin Energy electricity rates in Texas that needs a new furnace and AC: It depends on your quotes. A heat pump saves about $250 a year to run, so it comes out ahead over 15 years if its quote is no more than $3,700 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: $250 less
- Break-even quote gap: the heat pump wins over 15 years if its quote is no more than $3,700 above the like-for-like quote
- Interactive calculator (change size, insulation, fuel, prices, ZIP): https://meterwise.app/tx/austin-energy/heat-pump-vs-furnace/
- Machine-readable data: https://meterwise.app/data/v1/utilities/tx/austin-energy.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 | $11,190 | $8,760–$13,620 | – | $810 | $23,400 |
| Heat pump (replaces both) | $11,190 | $7,780–$14,600 | – | $570 | $19,700 |
| High-efficiency cold-climate heat pump | $14,600 | $10,700–$19,460 | – | $430 | $21,100 |

## Inputs

- Electricity: Residential tariff for Austin Energy, effective 2025-05-01, from the U.S. Utility Rate Database, applied tier by tier to the extra kWh. Typical-bill price 13.0¢/kWh, -19% vs. the Texas average of 16.0¢/kWh.
- Weather: Austin Great Hills, 1,904 heating and 2,746 cooling degree days a year (NOAA 1991-2020 normals).
- Gas: $2.02/therm (Texas winter average, EIA); propane $3.15/gallon; heating oil $6.15/gallon.
- Homes in this utility's Texas area heat with electricity 55%, gas 41%, propane 3% (U.S. Census Bureau ACS 2019-2023).
- Installed prices: published study ranges, scaled for home size and Texas HVAC installer wages (BLS).
- Rebates: not yet checked in Texas, so not included.

## Common questions

**Is a heat pump worth it for Austin Energy customers?**
As of November 2026, for a typical 1,800 sq ft gas-heated home on Austin Energy electricity rates in Texas that needs a new furnace and AC: It depends on your quotes. A heat pump saves about $250 a year to run, so it comes out ahead over 15 years if its quote is no more than $3,700 above the quote for a new furnace and AC.

**How much does a heat pump cost to run on Austin Energy's rates?**
About $570 a year for heating and cooling with the Heat pump (replaces both) option, against $810 for New gas furnace + new AC.

**What electricity price does this use?**
Electricity: Residential tariff for Austin Energy, effective 2025-05-01, from the U.S. Utility Rate Database, applied tier by tier to the extra kWh.

## 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 Texas utilities

- [Bailey County Elec Coop Assn](https://meterwise.app/tx/bailey-county-elec-coop-assn/heat-pump-vs-furnace/index.md)
- [Bandera Electric Coop, Inc](https://meterwise.app/tx/bandera-electric-coop-inc/heat-pump-vs-furnace/index.md)
- [Bartlett Electric Coop, Inc](https://meterwise.app/tx/bartlett-electric-coop-inc/heat-pump-vs-furnace/index.md)
- [Big Country Electric Coop, Inc](https://meterwise.app/tx/big-country-electric-coop-inc/heat-pump-vs-furnace/index.md)
- [Bluebonnet Electric Coop, Inc](https://meterwise.app/tx/bluebonnet-electric-coop-inc/heat-pump-vs-furnace/index.md)
- [Bowie-Cass Electric Coop, Inc](https://meterwise.app/tx/bowie-cass-electric-coop-inc/heat-pump-vs-furnace/index.md)
- [Central Texas Elec Coop, Inc](https://meterwise.app/tx/central-texas-elec-coop-inc/heat-pump-vs-furnace/index.md)
- [Concho Valley Elec Coop Inc](https://meterwise.app/tx/concho-valley-elec-coop-inc/heat-pump-vs-furnace/index.md)
- [Cooke County Elec Coop Assn](https://meterwise.app/tx/cooke-county-elec-coop-assn/heat-pump-vs-furnace/index.md)
- [Comanche County Elec Coop Assn](https://meterwise.app/tx/comanche-county-elec-coop-assn/heat-pump-vs-furnace/index.md)
- [Deep East Texas Elec Coop Inc](https://meterwise.app/tx/deep-east-texas-elec-coop-inc/heat-pump-vs-furnace/index.md)
- [Denton County Elec Coop, Inc](https://meterwise.app/tx/denton-county-elec-coop-inc/heat-pump-vs-furnace/index.md)
- [All Texas utilities](https://meterwise.app/tx/index.md)

## Cite this page

MeterWise, "Heat pump vs. gas furnace and AC on Austin Energy rates (TX)", updated 2026-11-10, https://meterwise.app/tx/austin-energy/heat-pump-vs-furnace/. Data licensed CC BY 4.0.