A gas furnace heats with burners. A heat pump heats by running the refrigeration circuit in reverse, and it also cools. If the air conditioner is already a separate outdoor unit, the conversion replaces that cooling equipment and changes the indoor coil or the air handler. If you keep the furnace as backup, you are looking at dual fuel, not a full removal.
Say which of those you want. Removing the furnace raises questions the furnace quote does not: the gas line, the vent, the cabinet space, and a circuit for electric strips if the heat pump will be alone on the coldest mornings. We are not assigning that gas work to a trade on this page. The estimate should say what is included. Permits are a local building-department question. We do not invent a permit fee here.
TEP lists up to $720 for a qualifying high-efficiency heat pump with a quality installation, on tep.com/efficient-home-program as read October 15, 2026. The rules, and the participating-contractor requirement, are on heat pump cost. Do not subtract $720 from a gas-furnace replacement, and do not subtract it from a conversion that has not been confirmed as eligible. There is no Sabino Creek conversion price on this page.
Efficiency Arizona is the income-qualified state program, not this TEP line. On October 19, 2026, it listed a heat pump up to $8,000 and a household cap of $14,000, and it assigns its own contractor. Households above 150 percent of area median income are not eligible. Read who qualifies before you count on it. The program said significant changes were coming.
What has to be decided
No dollar column. TEP’s utility rebate is up to $720, on tep.com/efficient-home-program. Efficiency Arizona’s separate income-qualified state program listed a heat pump up to $8,000 on efficiencyarizona.com. Neither amount is subtracted here.
| Decision | What stays or goes | Why it matters |
|---|---|---|
| Keep the furnace | Gas furnace remains as the cold-weather heat | That is dual fuel. The furnace, flue, and gas line stay. |
| Remove the furnace | Heat pump and strips carry the winter | The cabinet, vent, and gas connection are part of the scope. The estimate should list them. |
| Cooling equipment | The old condenser and coil are replaced or matched | A heat pump is the cooling system too. A leftover mismatched coil is not a finished conversion. |
| TEP rebate | Only if the heat-pump job qualifies | Up to $720 on tep.com. Participating contractor required. Not automatic. |
Name, mobile phone, and ZIP are required. Street address can wait. We follow up the same business day by phone or email. That is a callback, not a promise of a repair the same day.