Heat Pump Payback in Lebanon, IN
Should Lebanon switch to a heat pump?
Lebanon is a place where a heat pump genuinely costs more to operate than the alternative. $5,500 is what Lebanon would pay extra to go electric rather than replace the furnace and AC with the same again. Running costs here land $180 a year higher than the furnace it replaces, so that premium is never recovered. That's Lebanon's own climate and rates talking, not a hedge or a caveat.
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Lebanon is one of 3206 cities covered here, each run through the same model. Search another below.
Lebanon's weather, in the numbers that matter
4894 heating degree days pile up here every year, so Lebanon has a real but manageable winter; the cooling side runs to 779 cooling degree days, where summers add a moderate cooling load. Sizing runs off the design temperature, not the average day: -5.8°F here (coldest 2024 reading -7.8°F), which works out to a seasonal COP of 2.56 for the cold-climate class of unit this climate calls for. A cold-climate unit is the right call in Lebanon, below 25°F design temperature, a standard heat pump leans hard on electric-resistance backup, which erases most of the savings. These numbers come from Indianapolis Executive Airpor, the closest NOAA station, 11.1 miles out.
What it actually costs to run, year to year
Electricity use for heating alone comes out to about 4,841 kWh a year on the 2000-square-foot reference house; folding in cooling puts the electric bill near $937 a year. Lebanon's gas rate of $11.49 per Mcf, applied to the 51 Mcf a year the furnace burns, puts the current furnace-and-AC running cost near $758 a year, against 17.03¢ per kWh for electricity. Because the heat pump costs more to run here, the gap only widens with time: $8,199 behind after 15 years compared with replacing the furnace and AC like-for-like.
The break-even point in Lebanon
For the verdict in Lebanon to flip, electricity would need to drop to about 13.0¢/kWh from 17.03¢, or gas climb past $15.02 per Mcf from $11.49. 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 Lebanon; the case for one here rests on comfort, cooling, or replacing electric heat instead.
The other scenario: no gas furnace to begin with
Not every home in Lebanon has gas service. Swap the comparison to resistance heat instead of gas, and Lebanon's answer improves. Switching saves about $1,345 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 7.4 years.
How Lebanon compares nationally
Lebanon lands at position 867 out of 3206 cities on heating severity (coldest is 1), and 2129 out of 3206 by population size (biggest is 1). 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 Lebanon
Lebanon, Indiana is home to about 17,608 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 Lebanon, nothing is lost by holding off until the current equipment genuinely fails.
Get quotes from local HVAC contractors before deciding.
More on how this number was built
The methodology guide walks through exactly how Lebanon's 2.56 seasonal COP and the rest of this page's numbers get built. Lebanon's -5.8°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.