Should you heat your home with electricity or gas? For decades, that was the debate. But what if we told you the smartest choice in 2025 might be both?
That’s the beauty of a dual-fuel system—a setup that blends the clean efficiency of a heat pump with the power of a traditional gas furnace when temperatures really drop.
It’s not just a clever compromise; it’s an energy-efficient strategy that’s gaining traction fast, especially with recent updates to federal programs like the Inflation Reduction Act (IRA).
Whether you’re living in a snowy suburb or a drafty older home, dual-fuel systems could offer the performance, flexibility, and savings you’re looking for. Let’s break it down.
What Is a Dual-Fuel System?
A dual-fuel system, also known as a hybrid heat system, combines two heating technologies:
- An electric heat pump (your high-efficiency everyday workhorse)
- A gas furnace (your heavyweight champ for freezing temps)
In moderate weather, the heat pump handles the job. When it gets really cold (below 35°F–40°F), the system automatically switches to the gas furnace. Thus, you get the best of both energy sources without having to manually do anything.
How A Dual-Fuel System Works
Think of it like cruise control for your home’s comfort.
- Mild to cool temperatures? Your heat pump steps in, efficiently transferring heat from the outside air into your home.
- Bitter cold snap? The furnace takes over, delivering high-powered heat when it’s most needed.
- Back to a sunny 50°? The system flips right back to the heat pump, so you’re not burning fuel when you don’t have to.
With the right thermostat and controls in place, this switch happens automatically based on the outdoor temperature or your programmed preferences.
Why Everyone is Talking About Dual-Fuel System Rebates
For a while, dual-fuel setups were the unsung heroes of HVAC. But recently, they’ve taken center stage, thanks to updates in IRA guidance and energy policy.
Originally, many rebate programs only favored fully electric heat pumps. But with growing pressure to balance clean energy goals with practical homeowner needs (especially in cold climates), dual-fuel is now eligible for many incentives, including:
- The HOMES Rebate Program
- The 25C Federal Tax Credit
- State & utility rebates in select regions
How It Fits into the HOMES & 25C Programs
Let’s zoom in:
HOMES Program
The HOMES rebate rewards homeowners based on energy savings. So if your dual-fuel system significantly reduces your home’s overall energy use (especially when paired with insulation, air sealing, or an energy audit), you could qualify for up to $8,000–$16,000 in performance-based rebates, depending on your income and state.
Bonus: HOMES doesn’t care whether your system is fully electric or hybrid—it’s about the total energy impact.
25C Tax Credit
This one’s more straightforward. The 25C credit covers 30% of the project cost (up to $2,000) for qualified heat pump installations. And yes, that includes the heat pump portion of a dual-fuel system, even if the gas furnace is existing or secondary.
At MyNewHeatPump, we help homeowners structure their projects to maximize rebates and credits and stack them legally and efficiently.
Benefits of Dual-Fuel Systems
✔ Energy Savings
Heat pumps use less energy in mild temps, so you avoid firing up your gas furnace when it’s not needed.
✔ Cold-Climate Performance
No need to worry if your heat pump will keep up on a frigid January night—your furnace has your back.
✔ Lower Emissions
Using your gas furnace only during extreme cold reduces your overall carbon footprint.
✔ Eligibility for Rebates & Credits
Thanks to updated policies, you’re no longer penalized for choosing a system that works best for your home.
✔ Peace of Mind
Dual-fuel systems offer reliable backup, so you’re covered even during polar vortex weather.
Potential Cons (And Workarounds)
❌ Higher Upfront Cost
Yes, installing a dual-fuel system can cost more than a standard heat pump. But federal and state incentives can help you bridge that gap, and MyNewHeatPump can help you get the most money available.
❌ Slightly More Complex Install
Because you’re combining two systems, installation takes more coordination. That’s why we match you with contractors who are trained for dual-fuel IRA installations.
❌ Needs Smart Thermostat Controls
To switch seamlessly between systems, you need a compatible thermostat setup. Our team handles this integration when planning your upgrade.
Who Benefits Most from Dual-Fuel?
Dual-fuel is especially ideal if you:
- Live in cold climates with regular sub-freezing temps
- Already have a gas furnace that you’re not ready to ditch
- Want to transition to cleaner energy without giving up comfort
- Are looking to qualify for IRA incentives without going fully electric
Why It Pays to Work with MyNewHeatPump
At MyNewHeatPump, we specialize in navigating the IRA maze for real-world homes. If a dual-fuel system makes the most sense for your space, your climate, and your budget, we’ll:
- Help you stack rebates and tax credits
- Find a qualified contractor in your area
- Manage all the paperwork, inspections, and approval timelines
- Help you access financing options for any costs not covered by rebates
- Track your project from start to finish, and get you paid faster
Final Thoughts: It’s Not Either/Or Anymore
Gone are the days of choosing between all-electric and sticking with fossil fuels. With a dual-fuel system, you can have efficient comfort, lower emissions, and full eligibility for IRA programs—all in one streamlined setup.
And with MyNewHeatPump in your corner, you don’t have to figure it out alone.
Ready to See If Dual-Fuel Is Right for Your Home?
Fill out our eligibility quiz to get started, and we’ll walk you through your options and next steps, so you can get the best system (and the best deal) possible.
