Heat Pump Payback in Hillsborough, CA
Hillsborough, CA: the heat pump payback math
Hillsborough 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 $3,000. The heat pump would cost about $30 more a year to run than the furnace it replaces, a premium with no payback. That's Hillsborough's own climate and rates talking, not a hedge or a caveat.
Checking a different city
This runs the same numbers for 3206 US cities, not just Hillsborough. Look one up here.
How cold Hillsborough actually gets
2665 heating degree days pile up here every year, so Hillsborough has a mild winter by US standards; the cooling side runs to 90 cooling degree days, where summers rarely ask much of an air conditioner. The 99% winter design temperature here, the cold snap equipment must be sized for, not the seasonal average, is 39.9°F, and the coldest daily reading in the 2024 station record was 35.1°F. That puts the seasonal coefficient of performance at 3.39 for the recommended standard unit. Hillsborough's winters don't get cold enough to need the cold-climate premium, a standard unit holds up fine. Source: NOAA station San Francisco International A, 4.4 miles from Hillsborough, the closest one on record.
Hillsborough's running-cost comparison, in dollars
Electricity use for heating alone comes out to about 1,991 kWh a year on the 2000-square-foot reference house; folding in cooling puts the electric bill near $679 a year. The gas furnace it replaces burns roughly 28 Mcf a year at $22.01 per Mcf here, for a running cost near $649 a year including the old AC (electricity here runs 32.83¢/kWh). Because the heat pump costs more to run here, the gap only widens with time: $3,443 behind after 15 years compared with replacing the furnace and AC like-for-like.
What would change Hillsborough's answer
For the verdict in Hillsborough to flip, electricity would need to drop to about 31.3¢/kWh from 32.83¢, or gas climb past $23.07 per Mcf from $22.01. A utility offering a lower heat pump rate can change this. Until then, no quote price makes a heat pump pay back against gas in Hillsborough; the case for one here rests on comfort, cooling, or replacing electric heat instead.
The other scenario: no gas furnace to begin with
Gas isn't universal in Hillsborough, many houses run on electric heat already. Against electric-resistance heat, baseboard or an electric furnace, both 100% efficient but still just resistance, the case for switching gets stronger here. The saving here runs about $1,575 a year, which recovers the extra $7,500 spent going electric in roughly 4.8 years.
How Hillsborough compares nationally
Hillsborough lands at position 2063 out of 3206 cities on heating severity (coldest is 1), and 2952 out of 3206 by population size (biggest is 1). That's the middle third for winter severity among the cities covered here.
Next step if you live in Hillsborough
Hillsborough, California is home to about 11,171 people, and the figures above are the same ones a local HVAC contractor uses to size and quote a system, this site doesn't guess where a real quote would land, it just tells you whether it's worth asking for one. In Hillsborough, nothing is lost by holding off until the current equipment genuinely fails.
Get quotes from local HVAC contractors before deciding.
Reading further on this page's numbers
The methodology guide walks through exactly how Hillsborough's 3.39 seasonal COP and the rest of this page's numbers get built. Hillsborough is one of the cities where running costs land higher every year, not just slower to pay back, the guide to where this happens lays out why.