For two consecutive years, Americans have chosen heat pumps over gas furnaces — and the margin is widening. Heat pump sales topped 4 million units in the U.S. in 2023 C.E., outpacing gas furnace shipments for the first time on record. Then it happened again in 2024 C.E. What looked like a milestone is beginning to look like a trend.
The numbers
- Heat pump sales: More than 4 million units sold in 2023 C.E., according to data from the Air-Conditioning, Heating and Refrigeration Institute — the first year heat pumps outsold gas furnaces in recorded U.S. history.
- Gas furnace decline: Gas furnace shipments fell to roughly 3.7 million units in 2023 C.E. and continued declining in 2024 C.E., extending a multi-year downward trend as electrification incentives gained traction.
- Federal incentives: The Inflation Reduction Act of 2022 C.E. created a tax credit of up to $2,000 per household for heat pump installations, dramatically cutting the upfront cost that had slowed adoption for years.
Why heat pumps matter for emissions
Home heating accounts for roughly 10% of U.S. greenhouse gas emissions. Gas furnaces burn natural gas directly, releasing carbon dioxide and — in systems with leaks — methane, a greenhouse gas many times more potent than CO₂ over a short time horizon.
Heat pumps work on a different principle entirely. Rather than burning fuel, they move heat — pulling warmth from outdoor air, the ground, or water — into the home. In mild climates, a heat pump can deliver three to four units of warmth for every unit of electricity it consumes. Modern cold-climate models perform well even below freezing.
That efficiency advantage compounds over time. As the U.S. electrical grid adds more renewable generation, every heat pump installed gets a little cleaner — automatically, without the homeowner lifting a finger. A gas furnace, by contrast, will burn fossil fuel for its entire 15-to-20-year lifespan. The International Energy Agency has identified heat pumps as one of the highest-impact technologies available for cutting building emissions globally.
The policy engine behind the shift
This milestone didn’t happen by accident. The Inflation Reduction Act, signed in August 2022 C.E., created both the $2,000 tax credit and additional rebates under the High-Efficiency Electric Home Rebate Act program. Several states stacked their own incentives on top — Massachusetts, New York, Colorado, and California all launched rebate programs that brought heat pump costs into closer competition with gas alternatives.
Manufacturers responded. Carrier, Daikin, Lennox, and Bosch all expanded their U.S. heat pump lineups, with some announcing domestic manufacturing investments — a signal that industry is betting on electrification as the direction of the market.
The pattern echoes other clean energy shifts. Solar panels, electric vehicles, and LED lighting all followed similar arcs: years of incremental improvement, a policy catalyst, then a tipping point that surprised even optimistic forecasters. Rocky Mountain Institute research suggests the heat pump market may now be crossing that same threshold.
Who’s benefiting — and who still faces barriers
Adoption has been strongest in the Sun Belt, particularly the Southeast, where mild winters made heat pumps an easy sell long before the current surge. Colder northern states are catching up, but more slowly.
Low-income households face the steepest obstacles. Even with incentives, upfront installation costs can run $5,000 to $15,000 depending on the home, existing ductwork, and region. The federal rebate program was specifically designed to help lower-income families — offering up to $8,000 for a qualifying installation — but many states have been slow to launch it, meaning the money isn’t yet reaching the people who need it most.
Renters face a separate problem: landlords control heating systems and have little financial incentive to upgrade when tenants pay the utility bills. Energy efficiency researchers argue that closing this “split incentive” gap requires dedicated renter-protection policies beyond current federal law.
Environmental justice advocates have also noted that communities near gas infrastructure — often lower-income communities of color — have disproportionately borne the health costs of fossil fuel combustion. A well-executed heat pump transition could deliver real health benefits to these communities, but only if the rollout reaches them. That remains an open question.
What a growing gap means
Natural gas still heats roughly half of all U.S. homes. The installed base of gas furnaces numbers in the tens of millions, and most will stay in service for years or decades. A fully electric heating system, if it arrives, will take generations to build — not years.
The pace also depends on policy stability. Some of the incentive programs driving adoption face political uncertainty. The electrical grid build-out needed to support mass electrification is itself a multi-decade project with its own financing and permitting challenges.
Still, two consecutive years of heat pumps outselling gas furnaces is a different kind of signal than one. Markets that cross this kind of threshold rarely reverse. The economics are working. The technology has matured. And for a growing number of American households — from Georgia to Minnesota — the question is shifting from whether to go electric, to when.
Read more
For more on this story, see: Grist
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