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MassHVAC

Heat Pump Operating Cost Calculator

By MassHVAC Editorial Team Reviewed by MassHVAC Editorial Team Last updated

Annual heating cost

Current fuel vs heat pump

What this calculator uses for its math

  • Annual heating load: ~50 MMBtu per 1,000 sqft in IECC 5A MA, adjusted for insulation (poor +35%, good −22%).
  • Current system efficiency: oil boiler 83%, gas furnace 85% (95%+ for condensing), propane 85%, electric resistance 100%.
  • Heat pump COP: 2.6 cold-climate seasonal average — centered estimate from NEEP-monitored 2024–2025 cohort of HPQPL-listed equipment installed in Massachusetts. Top-tier Mitsubishi Hyper-Heat / Daikin LV typically run 2.8–2.9; basic-tier HPQPL minimums closer to 2.4.
  • Fuel prices: 2026 MA average — oil $3.80/gal, natural gas $1.75/therm, propane $3.20/gal.
  • Standard electricity rates by sponsor: Eversource $0.32/kWh, National Grid $0.30, Unitil $0.31, Cape Light Compact $0.28, MLP avg $0.18. Bundled supply + delivery, 2026-Q1 published tariffs.
  • Opt-in Heat Pump Rate by sponsor: Eversource $0.23/kWh, National Grid $0.22, Unitil $0.27, Cape Light Compact $0.25, MLP avg $0.16. Time-of-use schedule blended over a typical heat pump load shape; applied when the "Heat Pump Rate" toggle is on (default).

Why the Heat Pump Rate matters for the comparison

At Massachusetts's standard residential rates (Eversource $0.32/kWh, National Grid $0.30), a cold-climate heat pump at COP 2.6 costs roughly $39/MMBtu of heat delivered. Oil at $3.80/gal in an 83% efficient boiler is roughly $33/MMBtu. By that math, heat pump operating cost is comparable to (or modestly higher than) oil — which is what surprised some early MA homeowners who switched without enrolling in the discounted rate.

At the opt-in Heat Pump Rate (Eversource $0.23/kWh, National Grid $0.22), the same heat pump runs roughly $26–28/MMBtu — meaningfully below oil. The 25–30% rate discount is what turns the operating-cost comparison from "comparable to oil" into "meaningfully cheaper than oil." Enrollment is post-install and is typically handled by your Mass Save HPIN installer or directly through Eversource/National Grid customer service. There's no upfront cost to enroll; you just commit to using a time-of-use rate schedule that fits how heat pumps naturally run.

Why MLP residents see lower heat pump bills

Massachusetts municipal light plant (MLP) electricity rates run roughly $0.18/kWh vs $0.30–$0.32/kWh for investor-owned utility customers. The math: a heat pump consuming 7,000 kWh/year costs about $1,260 on MLP rates vs $2,100 on Eversource. Same equipment, same home — $840/year less to operate, every year, for the equipment's full lifetime.

The catch is that MLP customers are not eligible for Mass Save rebates (they don't pay into the Energy Efficiency Charge that funds the program). Their alternative path: the MLP Zero-Interest Energy Efficiency Loan (0% APR up to $25,000) and any MLP-specific rebate program their local utility offers.

Operating cost FAQ

What's my current annual heating cost in MA?
Typical MA single-family homes spend $2,500–$4,000 per year on oil ($3.80/gal), $1,500–$2,400 on natural gas ($1.75/therm), or $2,800–$4,500 on propane. Electric resistance is the most expensive at $4,000+ in homes that have it as primary heat.
How much does a heat pump actually cost to run?
A cold-climate heat pump in a typical 2,000 sqft MA home runs roughly $2,500–$3,500/year on the standard residential electric rate (Eversource $0.32/kWh, National Grid $0.30/kWh). On the opt-in residential Heat Pump Rate (~$0.22–0.23/kWh blended) the same home runs $1,700–$2,400/year — a $700–$1,100 swing that matters for the comparison vs oil or gas. MLP residents pay materially less either way ($0.18/kWh average).
What is the Heat Pump Rate and should I enroll?
Eversource MA and National Grid MA both offer an opt-in Residential Heat Pump Rate — a time-of-use schedule designed specifically for heat-pump households. Off-peak hours (overnight and early morning, when most cold-climate heat pumps do their heaviest runtime) are priced materially below the standard R-1 rate; on-peak hours are priced higher to balance. For homes with electric heat as primary, the blended bill almost always lands lower than standard R-1. Enroll after the heat pump is installed — your installer or Mass Save sponsor can walk you through the application. Note that homes still using a furnace or boiler for primary heat should NOT enroll, since the on-peak premium will hit your other appliance load harder than the off-peak discount benefits the smaller cooling load.
Why might the calculator show a heat pump costing more than my current fuel?
Two scenarios. First: if you compare a heat pump at the standard residential rate ($0.32/kWh Eversource) against oil at $3.80/gal, the cost-per-MMBtu of heat is roughly comparable — neither is dramatically cheaper. The savings story for oil-to-heat-pump conversion in MA depends on (a) enrolling in the Heat Pump Rate (which the toggle in this calculator models), and (b) the rebate-funded install cost being recovered over the equipment's 15–20 year lifespan. Second: gas at $1.75/therm with a 95% condensing furnace is genuinely the cheapest-per-MMBtu fuel option in MA today; for gas-furnace homes, the heat-pump conversion case is primarily about electrification, future-proofing, and access to AC, not pure operating-cost savings.
Why does the heat pump's COP matter?
COP (Coefficient of Performance) is the ratio of heat delivered to electricity consumed. A COP of 2.6 means 2.6 BTU of heat per BTU of electricity input. Current HPQPL-listed cold-climate heat pumps in MA monitored installations averaged seasonal COP 2.55–2.75 in NEEP field data (the 2024–2025 cohort) — we use 2.6 as the centered estimate. Top-tier Mitsubishi Hyper-Heat and Daikin LV installs trend higher; older HSPF2-minimum equipment trends lower. Geothermal averages 4.5 year-round.
What about the install cost on top of the operating cost?
This calculator shows operating cost only. For the full cost-after-rebate-after-financing picture including install cost + Mass Save rebate + HEAT Loan monthly payment, use the main rebate calculator. The two work together: operating-cost savings repay the install cost over the equipment's lifetime.

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Run the install cost numbers too

The Cost Calculator combines install cost, Mass Save rebate, HEAT Loan payment, and 20-year savings into a single picture.

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