Heat Pump Payback in East Chicago, IN
Is a heat pump worth it in East Chicago?
Here in East Chicago, the honest answer is that a heat pump raises your annual running cost. $5,500 is what East Chicago would pay extra to go electric rather than replace the furnace and AC with the same again. The heat pump would cost about $120 more a year to run than the furnace it replaces, a premium with no payback. There's no spin on that: East Chicago's numbers say wait.
Not the city you meant?
This runs the same numbers for 3206 US cities, not just East Chicago. Look one up here.
The climate behind East Chicago's payback figure
East Chicago has a real but manageable winter, 4836 heating degree days a year against a 65°F base, and summers are hot enough that cooling matters as much as heating, at 1011 cooling degree days. The 99% winter design temperature here, the cold snap equipment must be sized for, not the seasonal average, is -0.4°F, and the coldest daily reading in the 2024 station record was -9.4°F. That puts the seasonal coefficient of performance at 2.69 for the recommended cold-climate unit. Below the 25°F line where a standard machine starts leaning on resistance backup, East Chicago sits firmly in cold-climate territory, so that's the class of unit priced here. Source: NOAA station Gary/Chicago Airport, 2.8 miles from East Chicago, the closest one on record.
What it actually costs to run, year to year
Modelled on a typical 2000-square-foot house, the heat pump draws about 4,552 kWh a year to keep it warm, plus cooling, for a combined electric bill near $922 a year. East Chicago's gas rate of $11.49 per Mcf, applied to the 50 Mcf a year the furnace burns, puts the current furnace-and-AC running cost near $802 a year, against 17.03¢ per kWh for electricity. 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 $7,303 behind.
The break-even point in East Chicago
The heat pump would become the cheaper option in East Chicago if electricity fell to 14.1¢/kWh (from 17.03¢) or gas rose above $13.88 per Mcf (from $11.49). At today's prices a cheaper quote cannot rescue the gas comparison in East Chicago, since there is no yearly saving to recover it from.
The other scenario: no gas furnace to begin with
Gas isn't universal in East Chicago, many houses run on electric heat already. Compared with baseboard or electric-furnace resistance heat, the numbers shift in the heat pump’s favor. The saving here runs about $1,386 a year, which recovers the extra $10,000 spent going electric in roughly 7.2 years.
East Chicago against the rest of the country
Ranked against the other 3206 cities covered, East Chicago comes in at 935 for heating severity, 1 would be the coldest place in the dataset, and 1556 by population, where 1 is largest. That's the coldest third of the dataset, where climate does most of the work behind this figure.
Next step if you live in East Chicago
About 25,768 people live in East Chicago, Indiana, 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.
Line up a few local HVAC quotes before you decide.
Where East Chicago's figure comes from
Nothing above is a black box: the methodology guide shows the full arithmetic behind East Chicago's 2.69 seasonal COP and payback figure. East Chicago's -0.4°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.