Does a Heat Pump Replace a Furnace?
Yes, a heat pump can replace a furnace as a home's primary heat source. For most southern New Hampshire homes, the most economical and reliable configuration is not a full replacement but a dual-fuel system: the heat pump handles the majority of the heating season at high efficiency, and the existing or new furnace serves as backup for the coldest days. The smart thermostat or built-in controls switch between them automatically.
At A.J. LeBlanc Heating, we install both full heat pump conversions and dual-fuel systems across NH. Here is how each configuration works and how to decide.
Heat pump as a full furnace replacement
A heat pump replaces the furnace entirely. The home runs on electricity for heating and cooling year-round, with electric resistance backup ("emergency heat" or "aux strips") inside the air handler for the coldest stretches.
Pros:
- Eliminates fossil fuel use for heating entirely
- Simpler system (one heat source instead of two)
- Eligible for NHSaves rebates
- Same equipment provides AC in summer
Cons:
- Aux heat (electric resistance) is expensive to operate, so the heat pump must be sized to handle most NH winter days alone
- Requires a home with adequate insulation and air sealing (the heat pump can keep up only if the home does not lose heat faster than the heat pump can deliver it at low outdoor temperatures)
- Higher electric bills if the home is leaky or aux heat runs frequently
Best fit:
Well-insulated NH homes, newer construction, homes where envelope improvements (air sealing, attic insulation) are part of the project, owners committed to electrification.
Dual-fuel: heat pump + furnace backup
The most common heat pump configuration in NH. A cold-climate heat pump pairs with the existing gas, propane, or oil furnace. A smart thermostat or built-in control automatically switches between them based on outdoor temperature:
- Above the balance point (typically 20 to 35°F, depending on local fuel and electricity rates): heat pump runs
- Below the balance point: furnace runs
Pros:
- Lowest year-round operating cost in most NH homes
- Reliable backup heat on the coldest nights
- Heat pump can be sized to the home's most-common heating load rather than peak load (smaller heat pump, lower upfront cost)
- Reuses existing furnace, avoiding the cost of removing and disposing of it
- Same equipment provides AC in summer
- NHSaves rebates apply to the heat pump portion
Cons:
- Two systems to maintain (annual heat pump service plus annual furnace service)
- Continues fossil fuel use, though dramatically reduced
- More electronics and controls than a single-source system
Best fit:
Most NH homes considering a heat pump for the first time. Particularly good when the existing furnace is still functional or relatively new.
How the balance point works
The balance point is the outdoor temperature at which the heat pump and furnace cost roughly the same per BTU of delivered heat. Above that temperature, the heat pump is cheaper to operate; below it, the furnace is cheaper.
The balance point depends on:
- Current electricity rate
- Current fuel rate (gas, propane, or oil)
- Heat pump's COP at various outdoor temperatures
- Furnace's AFUE rating
For NH homes at current rates:
- Heat pump + natural gas furnace: balance point typically 25 to 35°F
- Heat pump + propane furnace: balance point typically 15 to 25°F (propane is more expensive, so the heat pump wins down to lower temps)
- Heat pump + oil furnace: balance point typically 15 to 25°F (oil is similar to propane in NH economics)
Smart thermostats from Ecobee, Nest, and Honeywell Home can be programmed with the balance point during commissioning.
What dual-fuel actually does for your bills
NH homes that convert from a straight oil or propane furnace to dual-fuel typically see:
- Fossil fuel use drops 50 to 80 percent (the furnace runs only during the coldest stretches)
- Total heating cost drops 20 to 40 percent (electricity replaces some fuel but at lower cost per BTU)
- Summer cooling cost drops compared to running a separate AC (the heat pump is also the AC)
Specific savings depend on local rates, the heat pump's efficiency, and how well the balance point matches actual fuel pricing.
What replacement actually involves
For dual-fuel:
- Outdoor heat pump unit installed (existing or new line set)
- Indoor coil added to the existing furnace, or the existing coil replaced
- Smart thermostat with dual-fuel support
- Electrical work for the new outdoor unit
- Refrigerant charge and commissioning
- Permits and inspections
For full heat pump conversion:
- Remove and dispose of existing furnace
- Install outdoor heat pump unit and indoor air handler
- Install aux heat strips in the air handler
- Disconnect gas, propane, or oil line
- Smart thermostat with heat pump configuration
- Electrical work for the new outdoor unit and aux heat circuit
- Permits and inspections
Rebates and tax credits
The federal 25C Energy Efficient Home Improvement Credit ended for installations placed in service after December 31, 2025, and is not available for new installations in 2026.
- NHSaves utility rebates: vary by program; income-eligible households may qualify for substantially higher incentives. See nhsaves.com or ask us for current amounts.
Schedule a consultation
If you are considering whether a heat pump or dual-fuel system makes sense for your NH home, contact A.J. LeBlanc Heating. We will run the numbers for your specific home, current fuel rates, and the equipment options that fit. Learn more about heat pumps. Serving New Hampshire families since 1928.
Frequently Asked Questions
Can a heat pump fully replace my furnace?
Yes, in well-insulated homes with adequate envelope performance. For most NH homes, dual-fuel (heat pump + furnace backup) delivers lower operating cost and more reliable performance on the coldest days.
What is the balance point on a dual-fuel system?
The outdoor temperature at which the heat pump and furnace cost roughly the same per BTU. Above it, the heat pump runs; below it, the furnace runs. Typically 15 to 35°F in NH depending on rates and fuel type.
Do I have to remove my existing furnace?
Not in a dual-fuel install. The existing furnace stays in place as backup. In a full electrification conversion, yes.
Will my heating bill go up or down with a heat pump?
For most NH homes converting from oil or propane, total heating cost drops 20 to 40 percent with a dual-fuel system. Specific savings depend on rates.
How do I know what size heat pump I need?
A Manual J load calculation determines the home's actual heat loss at design temperature. We perform this for every heat pump install. Sizing the heat pump correctly is the single most important factor in long-term satisfaction.