MeterMath

Heat pump Michigan

Heat pump vs gas heating cost in Michigan

$411 a year more to heat a typical Michigan home with a heat pump than with a gas furnace.

A typical home here burns about 594 therms of gas a year for heat, about $1,010 at the national average of $1.70/therm. A heat pump would use about 6,166 kWh instead, $1,421 at 23.05¢/kWh. Electricity would have to fall to 16.4¢/kWh, or gas rise in price, before the heat pump became the cheaper way to heat.

Prices updated October 2026 from EIA, AAA and BLS data.

How you heat now
therms/yr
 
$/therm
 
¢/kWh
 
Efficiency, upfront cost and rebates
%
Older furnaces 78 to 80, new 90 to 97.
 
$
Heat pumps also replace your AC.
$
State, utility or HEAR rebates.

How Michigan compares

Ranked by yearly saving against gas, Michigan is 45th of 51. At U.S. average figures a heat pump saves $27 a year. Michigan has the 39th cheapest residential electricity of the 50 states and DC, near the middle, at 23.05¢/kWh, 26% above the U.S. average of 18.31¢.

Michigan is a cold-climate state, with an estimated 6,600 heating degree days a year, so the calculator uses a lower seasonal COP of 2.4. Cold-climate heat pumps rated for low temperatures can do better.

Against propane the heat pump saves $216 a year, against heating oil it saves $1,054 a year, and against electric baseboard heat it saves $1,990 a year.

Heating nowNow, per yearHeat pumpDifference
Natural gas furnace$1,010$1,421−$411
Propane furnace$1,638$1,422$216
Oil furnace$2,476$1,422$1,054
Electric baseboard$3,411$1,421$1,990

Every neighboring state does better against gas, led by Indiana at $107 a year saved.

StateElectricitySaving vs gas a year
Indiana16.73¢$107
Ohio19.45¢−$15
Wisconsin19.06¢−$180
Michigan23.05¢−$411

More for Michigan

What these numbers assume

  • A heating load estimated from about 6,600 heating degree days a year: 594 therms of gas, 650 gallons of propane, 456 gallons of oil or 14,798 kWh of baseboard heat.
  • Natural gas at $1.70/therm, the U.S. city average for September 2026. Gas prices vary a lot by state and utility, so enter the price per therm from your bill.
  • Propane at $2.52 and heating oil at $5.43 a gallon, EIA forecasts for winter 2026–27.
  • Furnaces 85% efficient (oil 80%), and a heat pump with a seasonal COP of 2.4.
  • No federal tax credit: Section 25C ended for equipment placed in service after December 31, 2025.

Change any of them in the calculator above to match your own bills. The formulas are on the main heat pump calculator.

Sources

  • Electricity price: EIA Electric Power Monthly, Table 5.6.A (July 2026 data).
  • Natural gas: BLS U.S. city average, September 2026.
  • Propane and heating oil: EIA Short-Term Energy Outlook winter forecast, October 2026.
  • Heating degree days: MeterMath rounded estimate for the state.
  • Tax credit status: Public Law 119-21.