Should Chicago switch to a heat pump?
Here in Chicago, the honest answer is that a heat pump raises your annual running cost. $3,500 is what Chicago 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. Running costs here land $234 a year HIGHER than the furnace it replaces, so that premium is never recovered. There's no spin on that: Chicago's numbers say wait.
The climate behind Chicago's payback figure
Degree days tell the story here: Chicago racks up 4454 heating degree days each year (base 65°F), and summers add a moderate cooling load, with 920 cooling degree days on the cooling side. The 99% winter design temperature here — the cold snap equipment must be sized for, not the seasonal average — is -5.1°F, against a record low of -9°F. That puts the seasonal coefficient of performance at 2.58 for the recommended cold-climate unit. A cold-climate unit is the right call in Chicago — below 25°F design temperature, a standard heat pump leans hard on electric-resistance backup, which erases most of the savings. Climate figures trace to the nearest NOAA station, NORTHERLY ISLAND, 4.1 miles from Chicago.
The month-to-month numbers for Chicago
Electricity use for heating alone comes out to about 4,371 kWh a year on the 2000-square-foot reference house; folding in cooling puts the electric bill near $983 a year. Chicago's gas rate of 11.25 per Mcf, applied to the 46 Mcf a year the furnace burns, puts its running cost near $749 a year, against 19.06¢ per kWh for electricity. Looked at as a full purchase rather than an incremental one, payback here is longer than the 15-year equipment life, leaving the 15-year total $7,004 behind.
The other scenario: no gas furnace to begin with
Not every home in Chicago has gas service. Swap the comparison to resistance heat instead of gas, and Chicago's answer improves. Switching saves about $1,394 a year here — a heat pump moving heat rather than generating it needs far less electricity than resistance coils — so the extra $8,000 spent up front comes back in about 5.7 years.
Where Chicago ranks in this dataset
Among 3206 cities, Chicago's winter puts it at rank 1218 for severity, while its size puts it at rank 3 for population — 1 in both cases being the extreme. That's the middle third for winter severity among the cities covered here.
Deciding what's next in Chicago, IL
About 2,721,308 people live in Chicago, Illinois, and every number on this page is what a contractor would actually work from when quoting a system here — the point isn't to replace that quote, it's to tell you whether to bother asking for one. Here, there's no cost penalty to waiting until your current furnace or AC actually needs replacing.
Ask a local HVAC contractor for a quote before committing either way.
Reading further on this page's numbers
Every constant behind this page — the 2.58 seasonal COP, the degree-day corrections, the equipment costs — is documented in the methodology guide. At a -5.1°F design temperature, Chicago sits in cold-climate territory; the guide to that class of unit explains why.