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. $3,500 is what East 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. 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.
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, against a record low of -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 its running cost near $802 a year, against 17.03¢ 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 $5,303 behind.
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 $8,000 spent going electric in roughly 5.8 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 for 25,768 people 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.