How much does it cost to heat and cool a 2,000 sq ft home in Alabama?

In Alabama (16.2¢/kWh via Alabama Power / TVA), a 2,000 sq ft home averages $485/year ($40/month) with a high-efficiency heat pump, $572/year with a natural gas furnace and central AC, and $1,315/year with electric baseboards.

Are heat pumps cheaper to run than gas furnaces in Alabama?

At Alabama's natural gas rate of $1.65/therm, the economic break-even electricity price for a COP 3.1 heat pump is 19.0¢/kWh. Comparing this against Alabama's residential electricity rate of 16.2¢/kWh determines annual operating savings.

Alabama Heating & Cooling Cost Calculator (2026)

2,000 Sq Ft Heat Pump Bill

$40/mo

AL Electricity / Gas Rate

16.2¢ / $1.65

15-Yr Savings vs Baseboard

+$8,850

Alabama Annual Heating & Cooling Bills by Home Size

In Alabama, a 2,000 sq ft home averages $485/year ($40/mo) using a cold-climate heat pump ($341/yr winter heating + $144/yr summer cooling), compared to $572/year with a natural gas furnace and $1,315/year with electric baseboards.

Home Size	Heat Pump (COP 3.1)	Gas Furnace + AC	Baseboard + Window AC	15-Yr Heat Pump Savings
1,000 Sq Ft	$242/yr ($20/mo)	$286/yr ($24/mo)	$658/yr ($55/mo)	+$2,640
1,500 Sq Ft	$363/yr ($30/mo)	$429/yr ($36/mo)	$987/yr ($82/mo)	+$5,760
2,000 Sq Ft	$485/yr ($40/mo)	$572/yr ($48/mo)	$1,315/yr ($110/mo)	+$8,850
2,500 Sq Ft	$606/yr ($51/mo)	$714/yr ($60/mo)	$1,644/yr ($137/mo)	+$11,970
3,000 Sq Ft	$727/yr ($61/mo)	$857/yr ($71/mo)	$1,973/yr ($164/mo)	+$15,090
3,500 Sq Ft	$848/yr ($71/mo)	$1,000/yr ($83/mo)	$2,302/yr ($192/mo)	+$18,210

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