For most North County homes, a heat pump can handle all of the heating you need, because winters here are mild (December lows average about 41°F in Fallbrook). It also replaces your air conditioner. A gas furnace can still cost less to run where natural gas is available, because SDG&E electricity is expensive. In rural areas on propane, a heat pump usually compares much better. The best time to switch is when your AC is due for replacement anyway.
Fallbrook Heating & Air installs and repairs both heat pumps and furnaces, including 80% and 96% efficient gas furnaces, so we don't have a reason to push you one way. Here's how we'd talk it through at your kitchen table.
What's the difference between a heat pump and a furnace?
A furnace makes heat by burning natural gas or propane, then a blower pushes that warm air through your ducts. A heat pump doesn't burn anything. It's an air conditioner that can run in reverse, moving heat from the outdoor air into your home in winter and out of your home in summer.
That last point matters in North County. Almost every home here already has central air. A heat pump is a central AC with the ability to heat as well, so one outdoor unit does both jobs. With a furnace, you have two systems: the furnace for heat and a separate AC condenser for cooling.
Does a heat pump work in our climate?
Yes. Fallbrook averages about 41°F lows and 67°F highs in December, and coastal towns are milder still. Modern heat pumps are built to heat comfortably well below those temperatures. Inland valleys get colder mornings than the coast, but North County rarely sees the long freezes that make heat pumps work hard.
Heat pump efficiency is rated in HSPF2 for heating and SEER2 for cooling. Since 2023, new split heat pumps sold in California must meet at least 14.3 SEER2 and 7.5 HSPF2 under national federal standards. Higher ratings mean lower running costs for the same comfort.
Which is cheaper to run with SDG&E rates?
It depends on your fuel. SDG&E's electricity prices are high, so a heat pump doesn't automatically beat a natural-gas furnace on monthly cost. Compared with propane or electric baseboard and wall heaters, a heat pump usually comes out well ahead. Your rate plan and any solar change the math.
Here's the mechanics. A furnace turns fuel into heat: a 96% efficient furnace turns about 96% of the fuel's energy into heat in your house, and an 80% furnace about 80%. A heat pump moves heat rather than making it, so it delivers more heat energy than the electricity it uses. Whether that beats gas comes down to the price of a unit of electricity versus a unit of gas or propane where you live.
We don't promise savings figures, because your bill depends on your rate plan, your house and how you heat it. If you have rooftop solar, ask your solar provider how extra winter electricity use affects your bill. We're happy to walk through your own SDG&E bills with you.
| Factor | Heat pump | Gas or propane furnace (with AC) |
|---|---|---|
| Heating method | Moves heat from outdoor air using electricity | Burns natural gas or propane |
| Cooling | Built in; it's also your AC | Needs a separate AC condenser |
| Fit for our winters | Good; mild lows are easy work | Good; strong, fast heat on cold mornings |
| Running cost | Depends on SDG&E rates; usually better than propane or electric resistance heat | Natural gas is often competitive; propane is usually pricier |
| Combustion safety | No flame, no carbon monoxide from the unit | Needs proper venting, plus CO alarms in the home |
| Minimum efficiency (new, federal) | 14.3 SEER2 / 7.5 HSPF2 (split systems) | Furnace AFUE varies; we install 80% and 96% models |
| Best fit | AC due for replacement; propane or electric-only homes; homes wanting one system | Recent AC still in good shape; natural gas at the street |
What if my home uses propane?
Many rural homes in Fallbrook, De Luz and Rainbow aren't on natural gas mains and heat with propane. For those homes, a heat pump is often the strongest option, because propane usually costs more per unit of heat than natural gas, and there's no tank to schedule fills for.
We install and service natural gas and propane furnaces, and if you'd rather keep your furnace as a backup, we also install dual-fuel systems that pair it with a heat pump. Our Rainbow, De Luz and Pala Mesa page covers rural homes in more detail.
What is a dual-fuel system, and when does it make sense?
A dual-fuel system pairs a heat pump with a furnace. The heat pump cools in summer and heats on most winter days; the furnace takes over on the coldest mornings or when gas is cheaper to run. It suits homes with a newer furnace that still has life in it, or owners who want flame-based backup heat.
When your AC fails but your furnace is only a few years old, replacing the AC with a heat pump and keeping the furnace can give you the best of both without replacing equipment that still works.
When does a furnace still win?
A furnace still makes sense when you have natural gas at the street, your AC is fairly new and working well, and you want the lowest up-front cost to replace a failed heater. Replacing a furnace alone usually costs less than replacing both the AC and furnace with a heat pump system.
- Your AC is recent and in good shape, and the furnace is the part that failed.
- You're on natural gas and your running costs are reasonable.
- You want strong, fast heat on cold inland mornings.
If you go with a furnace, the choice is usually between 80% and 96% efficient. A 96% furnace wastes less fuel and vents through PVC pipe, but in a mild climate where the furnace runs fewer hours, the extra cost takes longer to pay back. See our furnace installation page for the trade-offs.
When does a heat pump win?
A heat pump usually wins when your AC is old or failing, you heat with propane or electric resistance, or you want one efficient system for both heating and cooling. Because it replaces the AC too, the extra cost over a new AC alone is what you're really comparing against a new furnace.
Learn more about installation and repair on our heat pump page, and see the efficiency rules in our SEER2 requirements guide.
Are there rebates for heat pumps in 2026?
Fewer than before. The federal 25C tax credit ended for equipment placed in service after December 31, 2025. TECH Clean California's single-family incentives have been closed to new reservations since November 14, 2025, and the HEEHRA rebate is fully reserved and no longer accepting new reservations. SDG&E lists any current offers on its rebates page.
Programs change, so we'll check current eligibility with you. Our rebates guide shows what we last confirmed and when.
Does the 2025 Energy Code require a heat pump?
No. California's 2025 Energy Code, in effect since January 1, 2026, does not require a heat pump when you replace the AC or furnace in an existing home. A proposed provision that would have pushed heat pumps for AC replacements was dropped. Either choice still needs a permit and, for most changeouts, duct sealing with third-party verification.
Frequently asked questions
Is a heat pump worth it in Southern California?
Often, yes. North County winters are mild, with December lows around 41°F in Fallbrook, which is easy territory for a modern heat pump. A heat pump also replaces your AC, so it makes most sense when the AC is due for replacement anyway. Whether it saves money depends on your fuel and SDG&E electricity costs.
Is a heat pump cheaper to run than a gas furnace with SDG&E rates?
It depends. SDG&E electricity prices are high, so a heat pump doesn't automatically beat a natural-gas furnace on running cost. Against propane or electric resistance heat, a heat pump usually compares much better. Your rate plan, any solar, and how much you heat all change the answer.
Does California require a heat pump when I replace my furnace?
No. California's 2025 Energy Code does not require a heat pump when you replace the AC or furnace in an existing home. A proposed provision that would have pushed heat pumps for AC replacements was dropped. You can choose a furnace, a heat pump, or a dual-fuel combination of both.
What is a dual-fuel system?
A dual-fuel system pairs a heat pump with a gas or propane furnace. The heat pump handles cooling and most heating, and the furnace takes over on the coldest mornings or when it's cheaper to run. It can suit homes that already have a good furnace or want gas backup.