How HeatPumpPayback Calculates Your City's Number
Start from the house, not the climate
Every estimate models the same reference house: 2,000 square feet, with a heat-loss coefficient of 0.3 Btu/hr per square foot per °F of indoor-outdoor temperature difference, typical for an existing US home rather than a new build. That fixes how much heat the house loses at any given outdoor temperature, before climate enters the calculation. Your own house will differ, which is the main reason to treat each page as an estimate.
Degree days, corrected
Annual heating demand comes from heating degree days (base 65°F). Minneapolis, MN logs 6,022 a year, Phoenix, AZ just 1,212. Raw degree-day totals overstate real heating, because a house gains free heat from people, appliances and sunlight, so the model applies a 0.6 correction on the heating side and 0.9 on cooling, where those same internal gains add to the load instead of offsetting it.
Sizing off the cold snap, not the average day
Equipment is sized against the 99% winter design temperature, the temperature a city stays above on 99% of days (here, the 1st percentile of the station's daily readings). That figure sets the system size and, through the efficiency curve, how well it runs; the cold-climate units guide covers what changes below 25°F.
What is actually being replaced
The existing furnace is modelled at 80% AFUE (older, non-condensing) and the existing central AC at SEER 10. The new heat pump is priced at 15.2 SEER2, a step above the 14.3 SEER2 federal minimum for split-system heat pumps. SEER2 is measured under a tougher test than the older SEER rating, so comparing the two slightly understates the new unit's cooling advantage (the efficiency ratings guide explains the difference).
The decision-relevant cost is incremental. A whole-home ducted heat pump is priced at about $13,000 installed, plus $2,500 where a cold-climate unit is called for, against a like-for-like replacement furnace at about $4,500 and a new central AC at about $5,500. Most people replace heating equipment when it fails, and at that moment the fair comparison is the extra cost of going electric, not the full price. Installed prices vary widely by region, house and contractor, so your quotes are the number that matters.
No federal tax credit is assumed
Until the end of 2025, Section 25C of the tax code credited 30% of a qualifying heat pump's cost, up to $2,000 a year. Public Law 119-21, signed July 4, 2025, ended that credit for equipment placed in service after December 31, 2025, so the figures on this site include no federal credit. State and utility rebates are not included either, because they vary by location and change often; where you qualify for one, your payback is shorter than the page shows. The tax credit guide shows how much the end of the credit moved the numbers.
Payback and the 15-year view
Payback is the extra cost divided by the yearly running-cost saving. Every page also reports a 15-year net position, because a payback that finishes after the equipment would need replacing anyway is not a real saving, as the guide to where a heat pump never pays back explains.
Where the raw numbers come from
Climate: heating and cooling degree days, design temperature and the lowest reading are calculated from calendar-year 2024 daily data in NOAA's Global Surface Summary of the Day, at the station nearest each city (every city in the dataset has one within 100 miles). One year of data is not a 30-year climate normal, so an unusually mild or cold 2024 at a station shifts that city's figures. Electricity: EIA Electric Power Monthly, Table 5.6.B, average residential price by state. Natural gas: EIA Natural Gas Navigator, average residential price by state (2025 annual). State averages hide differences between utilities, so check your own bill's rate against the one shown on your city's page. Homes with no gas service should use the electric-resistance comparison.