Heat Pump vs. Gas Furnace in Iowa: Which Heats Cheaper?

A heat pump delivers 2–3 units of heat per unit of electricity in mild-to-cold weather; a 95% furnace delivers 0.95 units of heat per unit of gas. Which is cheaper depends on the outdoor temperature (heat pump efficiency falls as it gets colder) and the ratio of your electric to gas rates. In practice there's a crossover temperature — the economic balance point — above which the heat pump wins and below which gas does. A dual-fuel setup automates that switch.

• Heat pump alone, undersized backup: the failure mode is the polar vortex week — expensive electric resistance backup running flat-out, or a cold house.
• Furnace alone: no summer role — you still need an AC, and you give up the shoulder-season efficiency a heat pump would bank.
• Dual-fuel, badly configured: a wrong balance point silently runs the expensive fuel. Setup competence matters as much as equipment.

Dual-fuel (heat pump + gas furnace): homes with existing gas service replacing both heating and cooling at once — the flexible, hedged choice. Cold-climate heat pump alone: all-electric homes, additions, or homeowners prioritizing electrification who accept auxiliary heat on the coldest days. Furnace + AC: still a sound, lower-upfront-cost choice, especially when replacing only one failed component in an otherwise working pair.

Incentive reality for 2026: the federal 25C credit is gone for new installs; MidAmerican Energy rebates for qualifying heat pumps remain active — verify current terms before counting on them.