The cost of gas-fueled furnaces varies based on the local price of gas, while the cost of a heat pump varies depending on local electricity costs. The efficiency of the furnace being replaced can have an effect on the total cost, as well.
Heat pumps typically offer greater efficiency than furnaces, although those concerned about environmental factors need to consider the efficiency of the power plants generating the electricity used. In regions where gas furnaces and boilers are rare, the cost of fuel is likely high enough to consider investing in a heat pump.
In addition, heat pumps typically provide air cooling as well. While a central air conditioner is likely more efficient than a heat pump, the upfront cost of installing and maintaining two systems may be prohibitively expensive.
In especially cold regions, heat pumps may have trouble generating the heat required to keep a home consistently warm. In addition to being less comfortable, this can also lead to an inefficient operation, eroding the potential savings. Gas- and oil-fueled furnaces and boilers, on the other hand, provide more predictable output, making them the preferred option in many buildings. Heat pumps typically must be installed outdoors, making them unacceptable in places that lack sufficient land.