Heat pump vs gas heating cost in Minnesota

$79 a year more to heat a typical Minnesota home with a heat pump than with a gas furnace.

A typical home here burns about 711 therms of gas a year for heat, about $1,209 at the national average of $1.70/therm. A heat pump would use about 7,380 kWh instead, $1,288 at 17.45¢/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 Minnesota compares

Ranked by yearly saving against gas, Minnesota is 35th of 51. At U.S. average figures a heat pump saves $27 a year. Minnesota has the 31st cheapest residential electricity of the 50 states and DC, near the middle, at 17.45¢/kWh, 5% below the U.S. average of 18.31¢.

Minnesota is a cold-climate state, with an estimated 7,900 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 $671 a year, against heating oil it saves $1,673 a year, and against electric baseboard heat it saves $1,803 a year.

Heating now	Now, per year	Heat pump	Difference
Natural gas furnace	$1,209	$1,288	−$79
Propane furnace	$1,958	$1,287	$671
Oil furnace	$2,959	$1,287	$1,673
Electric baseboard	$3,091	$1,288	$1,803

Three of its four neighbors do better against gas: Iowa, North Dakota and South Dakota, led by North Dakota at $241 a year saved.

State	Electricity	Saving vs gas a year
North Dakota	13.41¢	$241
South Dakota	15.37¢	$70
Iowa	15.99¢	$24
Minnesota	17.45¢	−$79
Wisconsin	19.06¢	−$180

More for Minnesota

EV charging cost in Minnesota vs gas: an EV saves $1,113 a year on fuel.
Solar payback in Minnesota: a typical system pays back in 13.7 years.

What these numbers assume

A heating load estimated from about 7,900 heating degree days a year: 711 therms of gas, 777 gallons of propane, 545 gallons of oil or 17,712 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.