Is a heat pump or gas furnace cheaper to run in a Phoenix winter?

By Michael Fitzgerald, Founder & Editor, Phoenix Cooling Guide
Technically reviewed by Tom Mattingly, Owner & President, AZ Trusted Air LLC (ROC 317368)
Published 2026-09-18

Almost every heat pump versus gas furnace comparison online was written for a climate that has a real winter. It weighs January design temperatures, fuel prices in heating-dominated states, and whether a heat pump can hold a house at 5 degrees outside. None of that describes the Phoenix metro. The National Weather Service climate summary for Phoenix puts the 1991–2020 normal at 874 heating degree days against 4,765 cooling degree days, and 2025 finished with 475 heating degree days against 5,354 cooling.

That ratio reframes the question. Heating is a minor share of a Valley home's annual energy cost, so the gap between fuels shows up in tens of dollars a year rather than hundreds. What moves real money is the fixed charge for keeping a gas account open, whether the new equipment is sized for a 115-degree afternoon, and what the utility bills for the worst hour of the month. This page works the arithmetic from published Arizona rates, and says plainly where the numbers are not public.

Do mild Arizona winters make gas heating unnecessary?

The asymmetry is the whole story. The National Weather Service's Phoenix climate summary records a 1991–2020 normal of 874 heating degree days and 4,765 cooling degree days, and the 2025 calendar year came in at 475 heating degree days against 5,354 cooling. A Valley house spends somewhere between five and eleven times as much of the year fighting heat as fighting cold. A comparison that treats the furnace as the main event is describing somebody else's house.

Fuel cost per unit of delivered heat can be calculated from published rates rather than guessed at. Southwest Gas's Arizona tariff effective August 1, 2026 prices single-family residential gas at $1.51633 per therm, and EIA figures reported through the University of Arizona's MAP Dashboard put Arizona's 2024 average residential electricity price at 14.91 cents per kWh. A therm is 100,000 BTU and a kilowatt-hour is 3,412 BTU, so the rest is division. At those rates, a million BTU of delivered heat costs $18.95 from an 80% AFUE gas furnace and $15.96 from a 95% AFUE furnace, against $17.48 from a heat pump holding a seasonal COP of 2.5, $14.57 at COP 3.0 and $12.49 at COP 3.5. Electric resistance strip heat, which converts one unit of electricity into one unit of heat, costs $43.69 for the same million BTU.

How many million BTU a particular Phoenix house needs over a winter is not published anywhere, and it moves with insulation, window exposure and thermostat habits. A homeowner can approximate it from twelve months of Southwest Gas usage history on the bill: take the therms billed in a summer month, which represent water heating, cooking and drying, and subtract that baseline from December, January and February. What is left is heating. Multiply by the per-million-BTU gap above and the annual difference stops being an argument.

Arizona has already largely answered the fuel question. EIA's 2020 Residential Energy Consumption Survey counts about 2.68 million Arizona housing units, of which roughly 1.36 million — 51% — use electricity as the main space heating fuel, against about 0.96 million, or 36%, on natural gas. A large share of that electric majority is heat pumps, but some of it is strip heat in an air handler, and the difference between those two is $12.49 against $43.69 per million BTU. Anyone told their home “already has electric heat” should establish which kind before comparing bills.

What happens to my gas bill and connection fee if I go all-electric?

The Southwest Gas residential bill has two parts, and only one of them responds to how much heat a household uses. The Arizona tariff statement of rates effective August 1, 2026 sets the single-family basic service charge at $10.70 per month and the commodity charge at $1.51633 per therm for all usage, built from a $1.23580 delivery charge plus rate adjustments and a $0.23714 monthly gas cost component. Southwest Gas's own rate-case notice describes the typical Arizona single-family customer as using 23 to 24 therms a month with a bill in the mid-$40s. At 23 therms, that is $34.88 of gas plus the $10.70 fixed charge, or $45.58.

The fixed half is structural, not temporary. Southwest Gas filed a general rate case with the Arizona Corporation Commission on February 27, 2026; if approved, new rates would take effect by April 2027 and raise the average residential bill by about $5.18 a month, roughly 10.69%. The filing keeps the existing rate design — a monthly basic service charge plus a volumetric rate — that has been in place since January 2012. That is why $128.40 a year is the honest figure for what leaves a household budget permanently when the last gas appliance goes. Households at or below 250% of the federal poverty level should check the Low Income Ratepayer Assistance program, which pairs a discounted basic service charge with a 30% year-round reduction on the per-therm rate.

The catch is that the furnace is rarely the only thing on the meter. A water heater, range, clothes dryer, pool heater or fireplace each keeps the account open on its own, and keeping any one of them means the $10.70 keeps arriving.

The electric side of the ledger is not simply the mirror image. APS residential customers on time-of-use-with-demand plans face a demand charge set by their single highest hour of on-peak use in the month, with on-peak running 4pm to 7pm weekdays, and APS explicitly advises managing it by staggering heating and cooling against other large loads. Valley heating demand peaks in the early morning, which usually sits outside that window, but a house whose auxiliary electric heat comes on alongside the oven and the dryer at 5pm on a January evening can set the month's demand charge in one hour.

For Phoenix-area homeowners who want this looked at on their own system, Phoenix Cooling Guide recommends AZ Trusted Air LLC (ROC 317368), whose owner Tom Mattingly reviews this guide. (623) 252-6403 · second opinion on a quote.

Is heat pump heat really less 'warm' feeling than gas heat?

This is the point where most comparisons overreach, so the limits are worth stating. The perception is widely reported by homeowners. The usual mechanism given for it — that a heat pump moves a larger volume of air at a lower supply temperature while a furnace moves hotter air in shorter cycles — is repeated everywhere and was not sourced to any standards body or manufacturer publication during research for this page, so it is not stated here as fact. What is measurable is the supply temperature in a given house. A kitchen thermometer taped inside a supply register, read after ten to fifteen minutes of runtime, produces a number. Better still, a homeowner can ask the installing contractor to record supply and return air temperatures at commissioning and write both on the invoice, which doubles as an airflow check.

Most of the cold-weather anxiety attached to heat pumps belongs to climates the Valley does not have. The National Weather Service summary for Phoenix in 2025 shows zero days with a minimum temperature at or below 32 degrees, against a normal of 0.6 days, and the year's lowest reading was 37 degrees on January 13. Defrost cycles, frozen outdoor coils and deep-cold capacity loss are real engineering problems in Denver or Chicago. In central Phoenix they are edge cases, and a homeowner reading national forum threads is absorbing another region's failure modes.

Two local factors shape perceived warmth more than the fuel does. The first is staging: a single-stage system cycles hard, while two-stage and variable-speed equipment runs longer at lower output, which changes how a room feels without changing the energy used. The second is ductwork. A Phoenix attic that runs 150 to 170 degrees in July is in the 40s before sunrise in January, so the same unsealed plenum joint that bleeds cooling capacity in summer is diluting heated air in winter. Houses that report weak, cool heat from a new heat pump are often reporting a duct problem with a new name attached.

For a household that has lived with gas heat in the same house for twenty years, the change is noticeable and there is no point pretending otherwise. Three practical responses exist: specify staged auxiliary heat with a documented lockout setting, specify a variable-speed air handler, or keep the existing furnace in a dual-fuel configuration so gas covers the coldest mornings. Comfort is subjective enough that a decision of this size should not rest on a stranger's anecdote about a house in another climate.

Should homes with existing gas lines keep gas heat when replacing?

Three configurations cover most of the Valley housing stock, and the decision looks different in each. A split system with a gas furnace in the garage or attic puts the heating and cooling in separate boxes, so a homeowner can replace the condenser and coil and leave a working furnace alone. A rooftop gas/electric package unit — ordinary on single-story Phoenix, Glendale and Mesa slab homes and barely seen in most of the country — puts both in one cabinet on the roof, which means the fuel question gets decided the day the unit is condemned, not later. A heat pump, package or split, simply reverses in winter and has no gas connection at all.

The incentive landscape shifted, and it shifted against heat pumps. ENERGY STAR and the IRS both confirm that the Section 25C Energy Efficient Home Improvement Credit — the up-to-$2,000 heat pump credit — and the Section 25D Residential Clean Energy Credit terminate for property placed in service after December 31, 2025. Equipment installed in 2026 does not qualify; a 2025 installation can still be claimed on a 2025 return using IRS Form 5695. SRP's Cool Cash rebate still treats heat pumps and central air conditioners as eligible: the customer must be a permanent SRP residential electric customer, the work must be done by a contractor licensed in Arizona for residential air-conditioning work and installed before April 30, 2027, and the system must replace or supplement an existing central heat pump or central AC. Amounts change, so the SRP page is the only figure worth trusting on the day.

One detail in the SRP terms is quietly useful as consumer protection. Manual J load calculations must be submitted with applications for single-stage systems, and applications without them are delayed or denied; multi-stage and variable-capacity systems are exempt from the requirement. A homeowner buying single-stage equipment therefore has a rebate-backed reason to demand the load calculation that determines whether the system is sized for a 115-degree design day. Licensing is not optional either: A.R.S. §32-1121 requires a Registrar of Contractors licence when labour and materials exceed $1,000 or when a permit is required, and because change-outs require a mechanical permit, the handyman exemption does not reach them. Licence status and complaint history are public at roc.az.gov.