Gas Furnace vs. Heat Pump vs. Dual Fuel: What’s the Difference?

Trane XC80 Installed

There are several different ways to heat your home. Here in the Atlanta area, most people select one of three different options: gas furnaces, heat pumps, or dual fuel heating systems.

All three have their pros and cons. Let's have a look at the differences.

Gas furnaces are efficient, effective, and popular.

If you use natural gas or propane to heat your home in winter, you have a gas furnace. Yes, you might also be using gas as part of a dual fuel system, but we'll get to that in a moment.

During warmer months, you typically only use natural gas for your stove or water heater. In winter, you consume more natural gas because you're also using your furnace. The higher you set your thermostat, the more natural gas you use.

A gas furnace's efficiency is expressed as its percentage AFUE, or annual fuel utilization ratio. A standard efficiency furnace provides 80% AFUE. This means that 80% of the energy used by the furnace will heat your home. The other 20% is expelled as exhaust.

Many newer models offer more than 80% AFUE. For example, a 95% AFUE furnace only expels 5% of its energy as exhaust!

Here's a what a freshly installed gas furnace looks like. And yes, this one's our handiwork:

Trane S9 Furnace Installed

Many people like gas furnaces because:

  • Natural gas prices are relatively low at the moment, making gas furnaces cost-effective at high usage levels.
  • During the coldest weeks of winter, gas furnaces use less energy than other fuel sources.
  • The heat produced by gas furnaces just feels really hot and toasty compared to the alternatives.
  • Gas lines are everywhere in our area, and many homes are connected to them during construction. If you've already got the gas hookup, why not use it?

For all of these reasons, gas furnaces are popular in our area - they're the most common type of heating system in metro Atlanta!

Still, gas furnaces aren't all roses and smiley faces. They have their downsides, too:

  • The "hot heat" produced by gas furnaces might satisfy your thermostat setting too quickly, leaving hot and cold spots throughout your home. This problem is often made worse by the fact that many HVAC contractors install oversized furnaces.
  • If you get dry skin in winter, the scorching heat from your gas furnace doesn't make things any better.
    At cool - but not cold - outdoor temperatures, they're less efficient than some electric heat pumps.
  • Natural gas simply provides more power than you need when outdoor temperatures are in the 40 to 60-degree range.
  • Since natural gas contains carbon monoxide (CO), your safety depends on proper HVAC installation protocol and regular inspection of all furnace components. Basically, natural gas carries the risk of a CO leak. Electric heat pumps don't.

Heat pumps heat the same way air conditioners cool, except in reverse.

An air conditioner removes heat from your home and deposits it outdoors. A heat pump heater, on the other hand, removes heat from the outdoors and deposits it inside your home.

A heat pump system looks a lot like an air conditioner (outdoor unit) and furnace (indoor unit) combination. However, the indoor part of a heat pump system doesn't contain a furnace. It's called the air handler, and it contains a coil and heat strips.

There aren't any gas lines running to or from it. There's no heat exchanger, and no combustion takes place inside of it.

The air handler simply moves air over a coil full of hot refrigerant. No burners. No flames. As the air passes over the coil, it gets warmer. A fan inside the air handler blows the warm air into your home.

Heat pumps are common, but less popular than gas furnaces because of:

  • Efficiency: Heat pumps are less efficient during peak winter. Many of them struggle to provide heat when outdoor temperatures dip into the 30s.
  • Heat strips: To continue heating your home when there's a big heating load, electric heat strips turn on to supplement the heat pump. These heat strips are like a giant toaster inside your air handler. They keep your home warm when it's cold outside, but it costs a lot of money to use them.
  • Heat quality: In general, the air from a heat pump isn't as hot as what you get from a gas furnace. It's still warming your home, but it "blows cooler." Some people don't care for that.

The bottom line? Heat pump heaters usually rely on heat strips during really cold weather. Compared to a gas furnace, heat strip heating is extremely inefficient.

If you use heat strips during much of the winter, you're bound to have high electric bills.

That being said, there are several things to like about heat pumps:

  • They're getting more efficient all the time. While a 15-year-old heat pump that resorts to heat strips in sub 40-degree temperatures is definitely a poor performer, many newer heat pumps reliably heat your home even as outdoor temperatures dip below freezing.
  • Heat pumps don't dry your skin out as much. Since the heat they produce isn't as intense as heat produced by a gas furnace, you may be more comfortable in your home. You might not need that whole-house humidifier you've been thinking about.
  • They're more efficient than natural gas at cooler - but not cold - temperatures. If it's in the 40s outside, there's no point in using combustion heat if you don't have to! Heat pumps are actually quite efficient on milder winter days.
  • Since heat pumps don't use combustion, they don't produce CO. It's just one fewer source of carbon monoxide leakage to worry about.

Dual fuel heating: the best of both worlds

By now, you're probably thinking, "Hey, what if I could use a heat pump when it was cool outside but switch to natural gas when it got really cold?"

Well, we've got good news. You can! It's called a dual fuel heating system.

The idea behind dual fuel is simple. Heat strips are expensive, so it's better to use natural gas when it's really cold outside. At the same time, natural gas isn't all that efficient when outdoor temperatures are in the 40s or 50s. Therefore, use a heat pump for cool weather and a gas furnace for cold weather.

In theory, dual fuel is the most efficient way to heat your home. Georgia Power sure thinks it is - they even offer a rebate to qualified homeowners who switch to dual fuel from an electric heat pump.

In reality, the dual fuel efficiency question is… complicated.

And it depends heavily on your situation. For instance:

  • If you don't already have gas lines, you'll have to pay to have them hooked up. This could negate the savings from a dual fuel upgrade or render the efficiency gains negligible from a cost perspective.
  • If you've got a working gas furnace, "upgrading" to dual fuel might actually cost more. While natural gas prices are still low, some people question whether a heat pump is sufficiently cost effective at milder temperatures to be worth the upgrade. It's usually not much more expensive to switch to dual fuel, but you'll want to consider current gas prices when weighing your options.
  • If you don't use a lot of heat during the winter - and you currently have a heat pump - a new heat pump is probably more cost effective. For heat pump owners who bust out the blankets and pajama pants while keeping the thermostat at 62 degrees, there may be little to gain from getting the gas lines hooked up and going the dual fuel route. If you've already got a heat pump, a new, more efficient one might serve you just fine.

In other words, some situations call for dual fuel. Others don't. It all depends on your future outlook for cost and efficiency, not to mention your comfort levels.

Given the current price of natural gas (it's low), switching to dual fuel is more of a comfort decision than an energy savings/cost decision. Many people prefer dual fuel because it gives them that "hot heat" in peak winter while not drying their skin out during the shoulder seasons. With dual fuel, they're just more comfortable indoors.

Regardless of heater type, regular maintenance is key.

When your heating equipment isn't properly maintained, it can fail. Sometimes, it fails when you need it most - think mid-January.

All sorts of things can cause your furnace or heat pump to quit. That's why it's important to have your equipment inspected by an HVAC pro before the heating season. A thorough analysis can reveal problems before they become serious (and before they lead to equipment failure).

Wondering what a heating season inspection should cover? Feel free to download our inspection checklist.

Whether you've got a gas furnace or heat pump, you want the system to work - and work well - all through the winter. A comprehensive inspection can get you there.

And you'll keep warm when it matters most.