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

In Arizona (15.4¢/kWh via APS / Salt River Project (SRP)), a 2,000 sq ft home averages $418/year ($35/month) with a high-efficiency heat pump, $495/year with a natural gas furnace and central AC, and $976/year with electric baseboards.

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

At Arizona's natural gas rate of $1.55/therm, the economic break-even electricity price for a COP 3.1 heat pump is 17.8¢/kWh. Comparing this against Arizona's residential electricity rate of 15.4¢/kWh determines annual operating savings.

Arizona Heating & Cooling Cost Calculator (2026)

2,000 Sq Ft Heat Pump Bill

$35/mo

AZ Electricity / Gas Rate

15.4¢ / $1.55

15-Yr Savings vs Baseboard

+$4,770

Arizona Annual Heating & Cooling Bills by Home Size

In Arizona, a 2,000 sq ft home averages $418/year ($35/mo) using a cold-climate heat pump ($171/yr winter heating + $247/yr summer cooling), compared to $495/year with a natural gas furnace and $976/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	$209/yr ($17/mo)	$247/yr ($21/mo)	$488/yr ($41/mo)	+$585
1,500 Sq Ft	$314/yr ($26/mo)	$371/yr ($31/mo)	$732/yr ($61/mo)	+$2,670
2,000 Sq Ft	$418/yr ($35/mo)	$495/yr ($41/mo)	$976/yr ($81/mo)	+$4,770
2,500 Sq Ft	$523/yr ($44/mo)	$618/yr ($52/mo)	$1,219/yr ($102/mo)	+$6,840
3,000 Sq Ft	$627/yr ($52/mo)	$742/yr ($62/mo)	$1,463/yr ($122/mo)	+$8,940
3,500 Sq Ft	$732/yr ($61/mo)	$866/yr ($72/mo)	$1,707/yr ($142/mo)	+$11,025

Launch Interactive Arizona Calculator → View Arizona 2026 HVAC Rebates & Install Costs →

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Compare 3 Local Arizona HVAC Installer Quotes

Verify 2026 Federal 25C Tax Credit & APS / Salt River Project (SRP) rebate eligibility and compare turnkey contractor pricing for a 3.0-Ton system (2,000 sq ft).

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