Yes, your Tucson Electric Power (TEP) bill will go up in winter when a heat pump replaces a gas furnace, but your Southwest Gas bill will fall by about the same heating load. A heat pump with an 8.5 HSPF2 rating costs less to run than an 80% AFUE gas furnace whenever your price per kWh is below your price per therm divided by 9.4.
How do you compare gas therms and electric kWh?
Put both fuels in the same unit: useful heat delivered into your home. The U.S. Department of Energy describes 80 to 82 percent AFUE as the range for medium-efficiency gas furnaces, so an 80% furnace turns 80 of every 100 units of gas energy into room heat.
One therm holds 100,000 BTU, so an 80% furnace delivers 80,000 BTU of heat per therm. A heat pump rated 8.5 HSPF2 delivers roughly 8.5 BTU per watt-hour over a season, which is about 8,500 BTU per kWh.
| Measure | 80% AFUE gas furnace | 8.5 HSPF2 heat pump |
|---|---|---|
| Fuel unit you pay for | Therm (Southwest Gas) | kWh (TEP) |
| Useful heat per unit | About 80,000 BTU | About 8,500 BTU (seasonal) |
| Units for 80,000 BTU | 1 therm | About 9.4 kWh |
The Department of Energy defines HSPF as a heat pump's efficiency over a full heating season and treats ratings above 8.0 HSPF as high-efficiency, so 8.5 sits in that group.
What is the break-even price between gas and a heat pump?
Heating the same space takes 1 therm in the furnace or about 9.4 kWh in the heat pump. Take the all-in price per therm from your latest Southwest Gas bill and divide it by 9.4. If your all-in TEP price per kWh is below that result, the heat pump is cheaper to run. If it is above, the furnace is cheaper.
Use the full bill amounts, including adjustments and taxes, divided by the therms or kWh you used. Fixed monthly charges stay on both accounts, so they do not change this comparison much.
Will my electric bill rise even if the heat pump is cheaper to run?
Yes. The heat pump moves your winter heating onto your electric account, so the TEP total climbs even when the household total falls. Your gas usage drops sharply, though if you keep a gas water heater or range, you still get a Southwest Gas bill with its fixed charges.
TEP says the effect of its proposed rate change varies with usage and is likely to be lower in cooler months than in hot weather. As of October 2026, check the rate that applies to your account before you run the numbers.
What changes the real cost of running a heat pump?
An HSPF2 number is a seasonal average, not a promise for your house. Your actual cost moves with these factors:
- Outdoor temperature on the coldest nights
- Your indoor thermostat setpoint
- Defrost cycles
- Duct leakage and duct losses
- Airflow across the coil
- Installation quality
- Whether the equipment capacity matches your home
Leaky ducts waste heat from either system. TEP's Efficient Home Program also includes duct sealing and HVAC tune-up rebates, which are worth asking about at the same visit. A regular AC and heat pump tune-up before the heating season helps keep airflow and defrost operation on track.
What TEP rebates apply when you switch to a heat pump?
TEP states that its Efficient Home Program offers rebates for purchasing and installing certified air-conditioning and heat-pump equipment. The listed amounts are:
- Up to $720 for a high-efficiency heat-pump quality installation.
- Up to $100 per ton for a qualifying mini-split heat pump or air conditioner.
You must use a participating Efficient Home Program contractor, and participating trade allies deduct the rebate from your final project cost. TEP describes the rebate as applying when an older working or non-working air-conditioning unit is retired. A conversion that removes only a gas furnace may not qualify, so confirm with TEP or the participating contractor before you commit. Our TEP rebates page keeps the details together.
Income-eligible households may also qualify for Efficiency Arizona rebates that cover a percentage of project costs, up to $14,000 per household depending on income. TEP lists heat pumps among the eligible electric-appliance upgrades.
When should you switch to a heat pump?
Early October is a good time to decide, with returning snowbirds opening up homes and nights starting to cool. Your furnace and your cooling system both see use this month, so you can judge what you have before the first cold snap. Start in this order:
- Pull your last Southwest Gas and TEP bills and run the 9.4 kWh-per-therm check.
- Ask for a written load calculation so the heat pump capacity matches your home's heat loss.
- Ask the contractor whether the job qualifies for the TEP rebate and whether they participate in the program.
- Compare the replacement quote against your current equipment's age and repair history.
If your existing system is aging, read about AC replacement in Tucson, since a heat pump replaces both heating and cooling in one unit. If you already own a heat pump that is struggling, see heat pump repair before you replace it.
Free referral help is available if you want a licensed company to look at your home. Call (520) 303-1924 or send a request and you will be connected with a licensed local heating and air company. This is a free referral service, not a contractor.