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

In Tennessee (13.5¢/kWh via TVA / NES / MLGW), a 2,000 sq ft home averages $484/year ($40/month) with a high-efficiency heat pump, $571/year with a natural gas furnace and central AC, and $1,379/year with electric baseboards.

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

At Tennessee's natural gas rate of $1.38/therm, the economic break-even electricity price for a COP 3.1 heat pump is 15.9¢/kWh. Comparing this against Tennessee's residential electricity rate of 13.5¢/kWh determines annual operating savings.

Tennessee Heating & Cooling Cost Calculator (2026)

2,000 Sq Ft Heat Pump Bill

$40/mo

TN Electricity / Gas Rate

13.5¢ / $1.38

15-Yr Savings vs Baseboard

+$9,825

Tennessee Annual Heating & Cooling Bills by Home Size

In Tennessee, a 2,000 sq ft home averages $484/year ($40/mo) using a cold-climate heat pump ($391/yr winter heating + $92/yr summer cooling), compared to $571/year with a natural gas furnace and $1,379/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)	$285/yr ($24/mo)	$690/yr ($58/mo)	+$3,120
1,500 Sq Ft	$363/yr ($30/mo)	$428/yr ($36/mo)	$1,034/yr ($86/mo)	+$6,465
2,000 Sq Ft	$484/yr ($40/mo)	$571/yr ($48/mo)	$1,379/yr ($115/mo)	+$9,825
2,500 Sq Ft	$605/yr ($50/mo)	$713/yr ($59/mo)	$1,724/yr ($144/mo)	+$13,185
3,000 Sq Ft	$725/yr ($60/mo)	$856/yr ($71/mo)	$2,069/yr ($172/mo)	+$16,560
3,500 Sq Ft	$846/yr ($71/mo)	$999/yr ($83/mo)	$2,414/yr ($201/mo)	+$19,920