Heat pump vs gas furnace in Minneapolis, MN: costs, comfort, and how to compare quotes

If you live in Minneapolis and you're comparing a heat pump vs a gas furnace, you are asking two questions at once:

• Will it keep my house warm during cold snaps?
• Will it lower my total cost over the next 10 to 15 years?

This guide gives you a clear way to decide using your rates, your house, and your quote details. If you want the math fast, open the Heat Pump vs Furnace tool and plug in your numbers as you read.

One-minute setup (do this first)

• Open the Heat Pump vs Furnace tool.
• Grab your electric price (cents per kWh) from your last bill. Use the all-in number you pay, not only the supply charge.
• Grab your gas price (dollars per therm) from your last bill. Use the all-in number you pay.
• Decide which choice you are pricing:
  • full heat pump (no furnace), or
  • dual-fuel (heat pump + gas furnace backup).

If you want the big-picture roadmap (envelope first, HVAC second, solar later), read the heating and cooling upgrade hub after this.

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Quick answer for Minneapolis homeowners

Most Minneapolis decisions land in one of these buckets.

A full heat pump often makes sense when:

• you need AC anyway, and you are replacing both heating and cooling equipment,
• your house is reasonably tight (or you are planning air sealing and insulation soon),
• you are open to slightly different feel from supply air (steady heat instead of hot blasts),
• you have electric rates that make the operating cost competitive for your situation.

A high-efficiency gas furnace often makes sense when:

• your gas rate is low relative to your electric rate,
• you want the hottest supply air on the coldest nights,
• you have older ductwork that struggles with the higher airflow a heat pump can need,
• you are not replacing AC right now and you want the smallest project.

Dual-fuel often makes sense when:

• you want heat pump comfort and shoulder-season savings,
• you want gas backup during cold snaps,
• you want a clear lockout plan (heat pump above X degrees, gas below X degrees) based on your rates.

If you already have a working furnace and you are not in an emergency, do not skip the lowest-cost comfort moves first. Insulation before a heat pump is the short version.

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Why Minneapolis is different (and why location matters)

Minneapolis has a long heating season and real cold snaps. That changes two parts of the decision:

• Capacity at low outdoor temperatures. Heat pumps lose capacity as it gets colder, and their efficiency drops. Cold-climate models are built for this, but model choice and sizing matter.
• Fuel-price sensitivity. In many Minneapolis homes, gas is a strong baseline. Your answer depends on your $/kWh, your $/therm, and how your heat pump performs during the coldest weeks.

If you want a cold-climate heat pump, look for equipment designed for low-temp performance. ENERGY STAR has a plain-English overview of air-source heat pumps and how they work: ENERGY STAR air-source heat pumps overview

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What you are comparing (plain English)

A gas furnace burns gas to make hot air, then pushes it through ducts. It is simple and powerful during cold snaps. A high-efficiency unit (90%+ AFUE) turns more of the fuel into usable heat.

A heat pump moves heat from outside to inside. It is the same hardware family as an AC, but it can run in reverse. In mild weather, it can be cheaper to run than gas. In deep cold, it can still heat, but the math depends on rates and the heat pump's cold-weather efficiency.

Dual-fuel uses a heat pump when it is economical or comfortable, then switches to gas at a chosen temperature. In Minneapolis, this is a common buyer-intent path because it reduces risk. It also adds control and installation complexity, so the installer matters.

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A simple comparison table (what changes between options)

Use this to frame quotes and trade-offs before you do the math.

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The math that decides most Minneapolis cases

You do not need perfect math. You need a check that tells you which direction the decision points.

Here is the clean way to compare operating cost: cost per unit of delivered heat.

Gas furnace cost per delivered heat (rule of thumb)

• 1 therm is about 100,000 BTU.
• 1,000,000 BTU is 10 therms.

So a planning formula for cost per 1,000,000 BTU of delivered heat is:

Gas cost per MMBtu delivered = ($/therm) * 10 / AFUE

Example (illustrative):

• Gas: $1.20/therm (all-in)
• Furnace: 95% AFUE

Gas cost per delivered MMBtu = 1.20 * 10 / 0.95 = about $12.60

Heat pump cost per delivered heat (rule of thumb)

A heat pump's efficiency is often described as COP (coefficient of performance). COP changes with outdoor temperature.

Rule of thumb:

• 1 kWh is about 3,412 BTU of electric energy.
• A heat pump delivers COP times that amount as heat.

A planning formula for cost per 1,000,000 BTU of delivered heat is:

Heat pump cost per MMBtu delivered = ($/kWh) * 293 / COP

Example (illustrative):

• Electricity: $0.18/kWh (all-in)
• COP:
  • 3.0 in mild weather,
  • 2.0 in cold weather,
  • 1.6 in deep cold.

Heat pump cost per delivered MMBtu:

• COP 3.0: 0.18 * 293 / 3.0 = about $17.60
• COP 2.0: 0.18 * 293 / 2.0 = about $26.40
• COP 1.6: 0.18 * 293 / 1.6 = about $33.00

The lesson is not the exact number. It is this: when gas is cheap and electricity is expensive, gas wins more often in Minneapolis winters. When electricity is cheaper (or your heat pump stays efficient at low temps), the answer moves.

If you want a fast break-even check, solve for the COP where both costs match:

Break-even COP = (293 * $/kWh * AFUE) / (10 * $/therm)

You can run this inside the Heat Pump vs Furnace tool without doing spreadsheet work.

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How to choose a dual-fuel lockout temperature (without guessing)

If you are leaning dual-fuel, you need a lockout plan you can explain in one sentence.

Start with economics:

• Pick a winter $/kWh and $/therm from your bills.
• Estimate the break-even COP with the formula above (or the tool).
• Ask the HVAC contractor for a performance chart (COP and capacity) for the exact heat pump model at different outdoor temperatures.

Then add comfort and risk:

• Many people prefer gas backup during the coldest stretch because supply air feels hotter and defrost cycles are less noticeable.
• If you have electric resistance backup (heat strips), check your panel and wiring capacity before you assume you can rely on them.

Dual-fuel only works well if the controls are configured correctly. If you want a deeper walkthrough, see Dual-fuel heat pump + furnace.

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Minneapolis quote checklist (what to ask before you sign)

This is the buyer-intent part. Use it with every contractor quote.

1) Load and sizing

• Will you do a Manual J load calculation? If not, what is your sizing method?
• If you are doing envelope work soon (air sealing or insulation), will you size for the tighter house you are building toward?

2) Cold-weather performance

• What is the exact outdoor unit model number?
• What is its rated capacity at low temperatures (not only at 47F)?
• What is your plan for backup heat during deep cold or defrost?

3) Ductwork and airflow (this is where comfort is won)

• Will you measure static pressure and airflow?
• Are my return paths good enough for higher heat pump airflow?
• Will you fix duct leaks or duct balance issues as part of the job?

If you suspect duct issues now, read Duct sealing payback (and quote checklist) before you buy new equipment.

4) Controls and commissioning

• Who sets the thermostat and lockout configuration?
• Will you verify refrigerant charge and airflow after installation?
• If it is dual-fuel, how will you confirm it is switching at the right time?

5) Paperwork and incentives

• Will you pull permits if required?
• Will you provide AHRI numbers and documentation for any rebates or tax credits?

Federal credits and utility rebates change. Start your research with the ENERGY STAR federal tax credits hub.

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The mistake that makes both options look worse

If your house is drafty or under-insulated, you can spend five figures and still feel disappointed.

In Minneapolis, the highest-return comfort moves are often:

• attic air sealing,
• attic insulation top-up,
• duct sealing if ducts run through attic or crawlspace,
• fixing return airflow for problem rooms.

If you want the short version and a plan, start with the insulation upgrade hub and the Insulation and Air Sealing ROI tool.

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FAQ

Will a heat pump keep my house warm in Minneapolis?

Yes, a properly sized cold-climate heat pump can heat in cold weather. Comfort depends on sizing, duct airflow, and backup strategy. If a contractor cannot explain the plan for cold snaps and defrost, keep shopping.

Is dual-fuel worth the extra cost?

It can be. Dual-fuel often trades higher upfront cost for lower risk and better comfort during the coldest stretch. The win is clearer when your gas rate is favorable and your electric rate is high.

Do I need a panel upgrade for a heat pump?

Not always. If you keep gas backup (dual-fuel), you often avoid big electric resistance backup loads. If you plan electric heat strips or an all-electric house, check panel capacity early. This is why Panel upgrade checklist exists.

What is the best time to replace HVAC in Minneapolis?

Spring and fall are often calmer, and you can compare options without pressure. Emergency replacements in January limit your choices and increase the chance you accept a rushed scope.

How many quotes should I get?

Get at least three. The goal is not only price; it is finding the contractor who measures airflow, sizes correctly, and can explain the controls.

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Next steps

• Open the Heat Pump vs Furnace tool and compare gas, full heat pump, and dual-fuel with your rates.
• If you want the do-this-first sequence, read the heating and cooling upgrade hub.
• Turn your choice into a plan with My Plan.