Almost every homeowner replacing heat in Montgomery or Prince George's County asks the same thing: heat pump or gas furnace. The honest answer depends on your house, your rates and your electrical panel. Here is how the two actually differ and how to weigh them.
A furnace makes heat, a heat pump moves it
A gas furnace burns natural gas inside a sealed metal heat exchanger. Blower air passes over the outside of that exchanger, picks up the heat, and the combustion gases go out the flue. Efficiency is measured as AFUE, annual fuel utilization efficiency, which is the share of the fuel energy that ends up in your house instead of up the chimney. A mid efficiency furnace lands around 80 percent. A condensing furnace pulls extra heat out of the exhaust until water vapor condenses, reaches the mid nineties, and vents through PVC out a sidewall. No furnace can exceed 100 percent, because it is burning something.
A heat pump does not make heat, it moves heat. It is an air conditioner that can run in both directions. In summer it pulls heat out of your house and dumps it outside. In winter a reversing valve flips the refrigerant flow, so the same equipment pulls heat out of the outdoor air, even cold outdoor air, and releases it inside. Because it is relocating heat that already exists rather than creating any, a heat pump can deliver two to three units of heat for every unit of electricity it uses. That is why this comparison is never just about the efficiency number on the label.
What a Maryland winter actually asks of a heating system
Our winters are mild by heating equipment standards. Daytime and overnight temperatures here sit mostly in the 20s and 30s from December through February, and that is squarely inside the range where a modern variable speed heat pump does its best work. The reputation heat pumps carry for blowing lukewarm air and running up bills comes from equipment sold in the 1980s and 1990s: single stage units that lost capacity quickly once the outdoor temperature dropped below freezing. Current cold climate models hold usable capacity far lower than that and modulate their output instead of cycling on and off at full blast.
What we do get is the occasional single digit snap, usually a handful of days a winter. At those temperatures a heat pump still produces heat, but it may not produce enough to keep up with the load, so auxiliary heat engages to cover the gap. In an all electric house that auxiliary heat is a bank of electric resistance strips, and those are expensive to run. Used the way they were designed, for a few hours during the coldest stretch of the year, that is a reasonable tradeoff. Used wrong, because a thermostat was set up badly or an outdoor sensor failed, it becomes a January bill nobody expected.
The money question depends on your Pepco and Washington Gas rates
Here is where we will not give you a universal answer, because there is not one. Operating cost is a ratio between two moving numbers: what a therm of natural gas costs from Washington Gas, and what a kilowatt hour of electricity costs from Pepco or BGE. Both of those change. Gas rates move with commodity markets and with the delivery charges approved for each utility. Electric rates move with generation supply costs and with distribution charges. A comparison built on last winter numbers can flip within a year or two, and any contractor who tells you one fuel always wins is selling you something.
The way to compare honestly is to use your own bills. Find the all in cost per therm on a Washington Gas statement, delivery charges included, and the all in cost per kilowatt hour on a Pepco or BGE statement, again including delivery. Then compare the cost of delivered heat rather than the cost of fuel. A therm is roughly 100,000 BTU before efficiency losses, and a kilowatt hour is roughly 3,412 BTU before a heat pump multiplies it. Multiply the furnace side by its AFUE and the heat pump side by its seasonal coefficient of performance, and you get two numbers that mean something for your house.
What that exercise usually shows around here is that the two options are closer than people assume, and that the winner depends on the specific rate you are paying and how mild the winter turns out to be. It also surfaces something people forget: a heat pump replaces the air conditioner too. If your cooling equipment is the same age as your furnace, you are not comparing a furnace to a heat pump. You are comparing a furnace plus an air conditioner to one piece of equipment that does both jobs, and that changes the arithmetic on the installation side as well as the operating side.
An all electric house and a house with gas service are different problems
If your house has no gas service, the decision is close to made for you. Running a gas line, setting a meter and building a vent path into a house that never had them is a large project on its own. Meanwhile the thing you would be replacing is usually electric resistance heat: baseboards, a furnace with strip elements, or older through the wall units. A heat pump will almost always cost less to run than resistance heat in every month of the year, because of that two to three times multiplier. We see this pattern constantly in Greenbelt cooperative homes and in older Brentwood houses where the heat has always been electric.
If you already have gas service and a sound vent or chimney, the question is genuinely open. You have a fuel path that is already paid for and a piece of equipment, the furnace, that is simpler, cheaper to install, and largely indifferent to how cold it gets outside. A condensing furnace in the mid nineties AFUE paired with a correctly sized air conditioner is not an obsolete choice, and in a leaky, poorly insulated house with a high design heat loss it is often the more practical one. Worth saying plainly: insulation and air sealing move your winter bills more than the brand on the equipment does.
Dual fuel systems, and when they are worth the complexity
A dual fuel system is a heat pump paired with a gas furnace, sharing one duct system and one thermostat. The heat pump handles heating down to a set outdoor temperature, called the switchover point or the balance point. Below that temperature the controls shut the heat pump off and hand the job to the furnace. You get heat pump economics through the 30s and 40s, which is most of a Maryland heating season, and gas heat during the cold snaps, and you never run electric resistance strips at all. On paper it is the answer to the whole debate.
The catch is that a dual fuel system only pays off when the switchover point is set with your actual rates in mind rather than left at a factory default, and when somebody revisits that setting if rates move. It also means two pieces of heating equipment to maintain instead of one. Dual fuel makes the most sense in a house that already has gas service, already has ductwork in decent shape, and needs the furnace and the air conditioner replaced at the same time anyway. In that situation the added cost over a straight furnace and AC pair is modest.
Electrical capacity, and the incentives that lean one way
Older houses inside the Beltway routinely have 100 amp service, and plenty of 1920s to 1940s bungalows and 1950s ramblers are still on panels with no space left in them. A heat pump with electric auxiliary heat is a substantial electrical load, sometimes larger than what is actually available. Before anyone quotes you equipment, the service size, the panel capacity and the free breaker spaces need to be checked. Sometimes the answer is a heat pump with a smaller strip heat bank sized to a realistic balance point. Sometimes it is a dual fuel system that needs almost no electric backup. Sometimes it is a service upgrade first.
The incentive picture currently leans toward heat pumps, and it belongs in the comparison.The federal Section 25C credit ended for equipment placed in service after December 31, 2025. Pepco and BGE run residential rebate programs for qualifying heat pumps under the Maryland EmPOWER framework, and Home Comfort Air Services participates in both. Washington Gas runs its own programs on the high efficiency gas side. Amounts and rules change, so we check current eligibility against the exact model going into your house instead of quoting a figure from memory.
The short version
- Maryland winters sit mostly in the 20s and 30s, which is where modern heat pumps do their best work.
- Auxiliary heat during single digit snaps is normal. It is only expensive when it runs more than it should.
- Compare your own Washington Gas cost per therm against your Pepco or BGE cost per kilowatt hour. There is no universal winner.
- A heat pump replaces the air conditioner too, so compare it against a furnace plus an AC, not a furnace alone.
- Dual fuel fits a house that already has gas and needs both pieces replaced at once.
- Check service size and panel capacity before committing to an all electric system in an older house.