The household
A single-family home in Phoenix, AZ, roughly 2,000 square feet, sized for a 3.5-ton system to handle the desert cooling load. The home's existing system is an electric-resistance furnace (used only a handful of weeks a year) paired with a 14.3 SEER2 AC condenser that's carrying the real workload most of the year. Arizona Public Service's residential rate is about 15.23¢/kWh.
The systems
The comparison is a 3.5-ton standard ducted heat pump (15.2 SEER2 / 8.1 HSPF2, installed around $6,650) against replacing the electric furnace and AC in kind (installed around $6,100). Phoenix's 935 heating degree days are the lowest of any city in this set — heating is a minor cost either way — while its 4,607 cooling degree days are the highest, making the heat pump's cooling-mode efficiency the deciding factor.
The 10-year math
Cooling dominates both sides of this table. Heating costs barely register by comparison, for either system.
| Cost category | Standard Heat Pump | Electric Furnace + AC |
|---|---|---|
| Equipment + install | $6,650 | $6,100 |
| Heating energy (10 yr) | $5,277 | $12,020 |
| Cooling energy (10 yr) | $23,265 | $24,729 |
| Maintenance (10 yr) | $1,750 | $1,500 |
| 10-year total | $36,942 | $44,349 |
A 15.2 SEER2 heat pump against a 14.3 SEER2 AC condenser sounds like a small gap. Multiplied by 4,607 cooling degree days a year for a decade, it's worth more than $1,400 a year in Phoenix.
The verdict
The heat pump saves an estimated $7,407 over 10 years, almost entirely on the cooling line — $23,265 versus $24,729 over 10 years — plus a real edge on the electric-resistance heating that still gets used during Phoenix's brief, mild winters. This is a useful reminder that heat pumps aren't just a cold-climate story: in hot climates, the same equipment that heats efficiently also cools more efficiently than a standard AC condenser, and that's most of the win here.
What could change this
Arizona's summer electricity demand makes time-of-use and demand-based rate plans common — a plan with cheap overnight or shoulder-season rates could improve the heat pump's economics further, since much of Phoenix's cooling load can be pre-cooled or shifted. APS and SRP occasionally run efficiency rebates (see the Incentives page) that would widen this gap. There's little scenario here that favors the electric furnace and AC — the case is structurally lopsided toward the heat pump.
Run it with your own numbers
These figures use representative home sizing and each state's EIA-reported energy prices as of August 2026 — see the methodology page for the full model. To see how your actual square footage, equipment, and utility rate change the outcome, run the Heat Pump vs. Traditional HVAC calculator with your own ZIP code.