Heat pump vs. gas furnace in Ann Arbor, MI
Here in Ann Arbor, the honest answer is that a heat pump raises your annual running cost. $3,500 is what Ann Arbor would pay extra to go electric rather than replace the furnace and AC with the same again, once the $2,000 federal credit is applied. Unfortunately the electric bill outweighs the gas bill it replaces by about $405 a year here, so the extra spend stays unrecovered. That's Ann Arbor's own climate and rates talking, not a hedge or a caveat.
How cold Ann Arbor actually gets
5472 heating degree days pile up here every year, so Ann Arbor has a cold winter that leans hard on heating equipment; the cooling side runs to 605 cooling degree days, where summers add a moderate cooling load. Sizing runs off the design temperature, not the average day: -2°F here (record low -7.1°F), which works out to a seasonal COP of 2.65 for the cold-climate class of unit this climate calls for. Ann Arbor needs the cold-climate class of unit: past a 25°F design temperature a standard heat pump falls back on resistance backup often enough to eat the savings. Climate figures trace to the nearest NOAA station, ANN ARBOR MUNICIPAL ARPT, 3.7 miles from Ann Arbor.
Ann Arbor's running-cost comparison, in dollars
A 2000-square-foot house here would pull roughly 5,229 heating kilowatt-hours annually on top of cooling, totalling about $1,190 a year on electricity. The gas furnace it replaces burns roughly 57 Mcf a year at 10.92 per Mcf here, for a running cost near $785 a year (electricity here runs 20.72¢/kWh). Priced as a standalone purchase rather than against a like-for-like replacement, equipment payback runs past the 15-year equipment life, for a 15-year net position $9,582 behind.
Electric resistance heat in Ann Arbor, compared
Gas isn't universal in Ann Arbor — many houses run on electric heat already. Against electric-resistance heat — baseboard or an electric furnace, both 100% efficient but still just resistance — the case for switching gets stronger here. The saving here runs about $1,843 a year, which recovers the extra $8,000 spent going electric in roughly 4.3 years.
Where Ann Arbor ranks in this dataset
Ann Arbor lands at position 389 out of 3206 cities on heating severity (coldest is 1), and 239 out of 3206 by population size (biggest is 1). That's the coldest third of the dataset, where climate does most of the work behind this figure.
Deciding what's next in Ann Arbor, MI
Ann Arbor, Michigan is home to about 122,925 people, and the figures above are the same ones a local HVAC contractor uses to size and quote a system — this site doesn't guess where a real quote would land, it just tells you whether it's worth asking for one. In Ann Arbor, nothing is lost by holding off until the current equipment genuinely fails.
Ask a local HVAC contractor for a quote before committing either way.
Where Ann Arbor's figure comes from
The methodology guide walks through exactly how Ann Arbor's 2.65 seasonal COP and the rest of this page's numbers get built. Ann Arbor's -2°F design temperature is below the 25°F line, which is why a cold-climate unit is the right call here — see what that changes in the cold-climate unit guide.