Heat Pumps vs Gas Furnaces: How to Choose for Your Sacramento Home

Suppose you are planning a new heating and cooling system or replacing an older unit. In that case, a common question is whether to keep a traditional gas furnace and air conditioner or switch to an all electric heat pump.

Our technicians at Fox Family Heating and Air Conditioning install and service both gas furnaces and heat pumps every day. We identify where each option excels and which homes benefit most, so this comparison focuses on the details that matter for your decision.

How Gas Furnaces and Heat Pumps Work

A gas or gas-electric system uses natural gas or sometimes propane to create heat. Burners heat a metal heat exchanger, and the blower pushes warm air through your ductwork. In the summer, a separate outdoor air conditioning unit uses electricity and refrigerant to move heat out of the home.

A heat pump looks a lot like a standard air conditioner outside, but it can run in both directions. In cooling mode it works like an air conditioner and moves heat out of your home. In heating mode, it reverses the refrigeration cycle and moves heat from the outdoor air into your home. Modern heat pumps use advanced compressors and refrigerants so they can keep extracting heat from the air even when outdoor temperatures drop well below what older models could handle.

Heat Pump Advantages

The heat pumps we install in 2025 are very different from the basic systems that gave the technology a mixed reputation years ago.

• High efficiency: Heat pumps move heat instead of creating it. Their performance is measured by COP (coefficient of performance) and HSPF or the newer HSPF2 rating. A COP of 3 means the system delivers three units of heat for every unit of electricity it uses. Many systems in our climate have HSPF2 ratings around 8 to 9, and since the outdoor unit is usually the largest electrical load in the home, that level of efficiency can noticeably reduce bills.
• All-electric comfort: A conventional heat pump paired with a modern air handler gives you both heating and cooling from the same outdoor unit and indoor coil. There is no combustion in the home, and there is no gas line to the air handler, which fits well with an all-electric house plan.
• Rebates and credits: As of 2025, many Sacramento area homeowners can still qualify for federal tax credits and local utility rebates on qualifying high efficiency heat pumps. SMUD and PG&E frequently offer incentives for equipment that reduces overall energy use.
• Comfort features: Many systems include inverter-driven compressors and variable-speed indoor blowers, which allow longer, quieter run times instead of short blasts of hot or cold air. That steadier operation can improve both comfort and humidity control during our long cooling season.
• Lower emissions: Because a heat pump uses electricity to move heat instead of burning fuel, total carbon emissions are usually lower.

Heat pumps are most efficient when outdoor temperatures stay in the moderate range. As the temperature drops, the system has to work harder to pull heat from the air. On older equipment, that is where electric heat strips had to run often and winter bills would spike. Modern cold climate models are designed to reduce how often those strips run, but this is still an important factor in operating costs.

Gas Furnace Advantages

Gas furnaces remain a solid option in Sacramento area homes.

• Strong heat output: A gas furnace produces high-temperature supply air, often in the 110 to 130 degree range. On the rare nights when the Sacramento Valley drops close to freezing, a gas furnace can recover the house temperature quickly and keep up even in older homes.
• High AFUE ratings: Gas furnace efficiency is measured by AFUE, or annual fuel utilization efficiency. New non-condensing furnaces commonly start around 80 percent AFUE, while condensing models can reach 95 to 98 percent AFUE, which cuts heating waste significantly compared to older equipment.
• Lower winter operating cost in some situations: Where natural gas rates are favorable, and electricity is expensive, the cost per unit of heat from a high-efficiency furnace can be lower than from a heat pump on the coldest nights.
• Proven reliability: Furnace technology has been refined over many decades, and a quality furnace can provide many years of dependable service when installed and maintained correctly.
• Electric panel flexibility: Some older homes in Rancho Cordova and Sacramento still have limited electrical service. A gas furnace uses relatively little electricity compared to a large heat pump, which can avoid or postpone the need for a panel upgrade.

The right furnace still needs careful sizing, proper ductwork, and good airflow. When those pieces are in place, a gas system can be an efficient and reliable part of a gas-electric setup.

Why Sacramento Climate Favors Heat Pumps

The Sacramento Valley climate is an important reason heat pumps have become more attractive. Summers are long, hot, and dry, with many days in the upper 90s. Winters are comparatively mild, and the coldest overnight temperatures usually arrive in December and January.

For that pattern, a heat pump spends most of the year working in its ideal temperature range. During cool fall evenings, winter days, and early spring, outdoor temperatures are often in the 40 to 60 degree range. Under those conditions, a modern heat pump operates with a strong COP and moves existing heat instead of relying on electric resistance heat.

The first real cold snap in the Sacramento area often arrives in late November. On those nights, a gas furnace can feel very strong, but so can a properly selected heat pump, especially if it is a cold climate model. For homes served by SMUD, where electricity rates and incentives support efficient electric equipment, heat pumps can be especially cost-effective. For homes on PG&E gas and electric, the balance between gas and electric pricing plays a bigger role in the decision.

Operating Costs and Break-Even Temperatures

Which system is cheaper to run depends on several factors, including insulation levels, duct condition, thermostat settings, and utility rates. One useful concept is the break-even temperature. This is the outdoor temperature at which the cost per unit of heat from the heat pump equals the cost per unit of heat from the gas furnace.

Above the break-even temperature, the heat pump is usually the lower-cost option because it delivers several units of heat for each unit of electricity it uses. Below that temperature, the furnace may become more economical, especially if the heat pump has to rely heavily on strip heat or if electric rates are high.

As a general example for Sacramento area homes, a modern heat pump with an HSPF2 rating around 9 and a furnace with an AFUE around 95 percent might have a break-even point somewhere in the mid-30-degree range. Actual break-even temperatures still vary based on current SMUD or PG&E rates and how the system is installed.

Your outdoor unit also runs in both seasons if you have a heat pump. In cooling mode, efficiency is measured with SEER2 rather than the older SEER rating. As of 2025, minimum standards in our region require 14.3 SEER2 on new split systems, and many of the heat pumps we install exceed that level, which can lower both cooling and heating bills compared to an older air conditioner and furnace.

Dual Fuel Systems: A Hybrid Option

For some homes, the ideal setup is a dual fuel or hybrid system that pairs a heat pump outdoor unit with a gas furnace indoors instead of an electric air handler.

In mild weather, the system runs in heat pump mode and uses electricity efficiently to warm the home. When the outdoor temperature drops near or below the calculated break-even temperature, the controls switch over to gas heat so the furnace can handle the coldest hours.

Dual fuel systems can fit homeowners who want the efficiency benefits of a heat pump most of the year but prefer the feel of gas heat during rare cold snaps or have limited electrical capacity. Our technicians regularly design these systems in Rancho Cordova and surrounding Sacramento Valley communities and can review whether this option makes sense for your home.

Questions to Consider Before You Decide

Every home and family is different. Before committing to a new heat pump or gas furnace, it helps to think through a few key questions:

• Do you already have natural gas service to the home, or would this be a new gas line run and meter?
• Are you served by SMUD, PG&E, or another utility, and how do your current gas and electric rates compare?
• How long do you plan to stay in the home, and are you planning future projects like solar or a panel upgrade?
• How well insulated is the house, and have you had the ducts checked for leaks?
• Do you prefer the steady, moderate temperature that a heat pump provides, or the hotter supply air of a furnace on cold mornings, and how important is lowering your carbon footprint compared to lowering your bill?

Working through these questions with a trusted advisor can clarify which system lines up best with your goals. At Fox Family Heating and Air Conditioning, our goal is to help you find the option that fits your budget, your comfort needs, and the way you use your home.

Fox Family Can Help You Compare Options

If you are trying to choose between a heat pump and a gas furnace for your Rancho Cordova or Sacramento home, you do not have to figure it out alone. Our technicians can perform a proper load calculation, review your current utility bills, and show you side-by-side operating cost comparisons for different equipment options.

During an in-home visit, we can walk through your existing system, evaluate your ductwork, and explain where a heat pump, a high-efficiency furnace, or a dual fuel system might make the most sense. We also outline available 2025 rebates and tax credits so you can see the true net cost of each option.

If you would like help comparing systems or scheduling a replacement estimate, call us at 916-877-1577 or book a visit online. Our team is based in Rancho Cordova and understands how Sacramento Valley weather, SMUD and PG&E rate structures, and local building codes affect your comfort.

Fox Family Heating and Air Conditioning serves Rancho Cordova, Sacramento, and Northern California. If you need help choosing between a heat pump and a gas furnace, give us a call!