Heat Pump Payback in Dearborn, MI
Will a heat pump pay off in Dearborn, MI?
Dearborn is a place where a heat pump genuinely costs more to operate than the alternative. Swap a failed furnace and AC for a heat pump rather than buying like-for-like, and the extra cost here runs $5,500. Running costs here land $300 a year higher than the furnace it replaces, so that premium is never recovered. There's no spin on that: Dearborn's numbers say wait.
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The climate behind Dearborn's payback figure
5000 heating degree days pile up here every year, so Dearborn has a cold winter that leans hard on heating equipment; the cooling side runs to 928 cooling degree days, where summers add a moderate cooling load. The 99% winter design temperature here, the cold snap equipment must be sized for, not the seasonal average, is 1.9°F, and the coldest daily reading in the 2024 station record was -2.9°F. That puts the seasonal coefficient of performance at 2.75 for the recommended cold-climate unit. A cold-climate unit is the right call in Dearborn, below 25°F design temperature, a standard heat pump leans hard on electric-resistance backup, which erases most of the savings. Source: NOAA station Detroit Metro Wayne County Ai, 8.3 miles from Dearborn, the closest one on record.
The yearly running costs in Dearborn
A 2000-square-foot house here would pull roughly 4,604 heating kilowatt-hours annually on top of cooling, totalling about $1,118 a year on electricity. That compares with roughly 52 Mcf a year of gas at Dearborn's $10.92 per-Mcf rate, about $818 a year with the old AC included, against a local electricity rate of 20.72¢/kWh. With running costs higher every year, there is no payback at any purchase price; over 15 years, against a like-for-like replacement, a household here would end $10,000 behind.
What would change Dearborn's answer
The heat pump would become the cheaper option in Dearborn if electricity fell to 13.6¢/kWh (from 20.72¢) or gas rose above $16.68 per Mcf (from $10.92). At today's prices a cheaper quote cannot rescue the gas comparison in Dearborn, since there is no yearly saving to recover it from.
Electric resistance heat in Dearborn, compared
Plenty of homes in Dearborn heat with electricity alone, no gas line involved. Compared with baseboard or electric-furnace resistance heat, the numbers shift in the heat pump’s favor. Switching saves about $1,755 a year here, a heat pump moving heat rather than generating it needs far less electricity than resistance coils, so the extra $10,000 spent up front comes back in about 5.7 years.
Dearborn against the rest of the country
Ranked against the other 3206 cities covered, Dearborn comes in at 691 for heating severity, 1 would be the coldest place in the dataset, and 307 by population, where 1 is largest. That's the coldest third of the dataset, where climate does most of the work behind this figure.
What to do with this number in Dearborn
About 106,377 people live in Dearborn, Michigan, 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.
Get quotes from local HVAC contractors before deciding.
More on how this number was built
Every constant behind this page, the 2.75 seasonal COP, the degree-day corrections, the equipment costs, is documented in the methodology guide. At a 1.9°F design temperature, Dearborn sits in cold-climate territory; the guide to that class of unit explains why.