Heat pump cost in Tennessee
Estimated yearly heating and cooling cost for a 2,000 sq ft Tennessee home: $1,317 with a heat pump, $940 with gas heat and AC. 13.87¢ electricity makes the heat pump about $377 a year dearer to run in Tennessee.
What it costs to install
National guides price a 2,000 sq ft air-source heat pump at $10,000–$20,000+ installed; we don't have Tennessee-specific figures. The tier we'd quote first here (mixed climate) is 16–17 SEER2 / 8–9 HSPF2, at $8,000–$15,000+.
Source: HomeGuide, “How much does a heat pump cost?” (2026).
Operating cost vs gas
| Heat pump heat, 7.5 / 9.5 HSPF2 | $1,099 / $868 |
| Heat pump cooling, 14.3 SEER2 | $217 |
| Furnace, 95% / 80% AFUE | $723 / $858 |
| AC at 14.3 SEER2 (Southeast min) | $217 |
| Heat pump vs furnace + AC | $1,317 vs $940 |
Running cost penalty: $377 a year. The case for a heat pump here rests on replacing two systems with one.
13.87¢/kWh (EIA, July 2026 YTD); gas $1.16/therm (EIA 2025, $11.84/Mcf at 1,025 Btu/ft³). Energy only; estimates.
FAQ
What does a heat pump cost installed in Tennessee?
National estimate: $10,000–$20,000+ for 2,000 sq ft. Local bids decide it.
What's the break-even power price in Tennessee?
About 9.1¢/kWh for a 7.5 HSPF2 heat pump against a 95% furnace at $1.16/therm; prices would need to fall about 4.8¢ from Tennessee's 13.87¢ average. A 9.5 HSPF2 unit would heat for $868 a year.
Can I still claim 25C for a heat pump?
The 25C credit ended with 2025: it applied to qualifying heat pumps placed in service through December 31, 2025 (30%, max $2,000 a year), and 2025 claims required a Qualified Manufacturer Identification Number. Nothing federal applies to a 2026 install. Source: IRS: Energy Efficient Home Improvement Credit.
Tennessee climate
NOAA's 1991–2020 record: 3,753 HDD and 1,416 CDD for Tennessee. That means both seasons matter, which suits a heat pump that replaces furnace and AC at once. Jan's implied mean, roughly 38°F (degree-day approximation), is within what most modern heat pumps handle with little backup heat.
Heating and cooling loads are comparable; have a Manual J check both, and consider a variable-speed unit.
Monthly comparison
| Month | HDD | CDD | Heat pump | Furnace + AC |
|---|---|---|---|---|
| Jan | 839 | 2 | $246 | $162 |
| Feb | 650 | 1 | $190 | $125 |
| Mar | 493 | 13 | $146 | $97 |
| Apr | 219 | 20 | $67 | $45 |
| May | 71 | 125 | $40 | $33 |
| Jun | 2 | 280 | $44 | $44 |
| Jul | 0 | 391 | $60 | $60 |
| Aug | 0 | 358 | $55 | $55 |
| Sep | 24 | 188 | $36 | $33 |
| Oct | 209 | 35 | $67 | $46 |
| Nov | 500 | 1 | $147 | $96 |
| Dec | 746 | 1 | $219 | $144 |
Nearby states
| State | Heat pump | Furnace + AC | Break-even |
|---|---|---|---|
| Arkansas | $1,241 | $1,331 | 14.9¢ |
| Georgia | $1,207 | $1,221 | 15.6¢ |
| Mississippi | $1,133 | $1,015 | 12.8¢ |
| Alabama | $1,289 | $1,114 | 13.4¢ |
| North Carolina | $1,303 | $1,123 | 12.4¢ |
| Missouri | $1,664 | $1,421 | 11.5¢ |
| Kentucky | $1,519 | $1,189 | 10.7¢ |
| Virginia | $1,724 | $1,349 | 12.7¢ |
| Tennessee | $1,317 | $940 | 9.1¢ |
See also: AC running cost in Tennessee · heat pump vs gas furnace calculator · heat pump cost by state
Sources: EIA electricity and natural gas prices, NOAA nClimDiv, U.S. DOE regional standards. Model: 2,000 sq ft, average insulation; methodology.