Heat Pump Payback in Madison, WI
Should Madison switch to a heat pump?
In Madison, a heat pump would cost more to run each year than what you have now. Against a like-for-like gas furnace and AC swap, going electric costs $5,500 more up front here. Running costs here land $403 a year higher than the furnace it replaces, so that premium is never recovered. There's no spin on that: Madison's numbers say wait.
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The climate behind Madison's payback figure
Madison has a cold winter that leans hard on heating equipment, 5775 heating degree days a year against a 65°F base, and summers add a moderate cooling load, at 761 cooling degree days. -9°F is the figure equipment gets sized against here, the 99th-percentile cold snap, not an average day, with a low of -11°F in the 2024 station record. Worked through the model, that's a seasonal COP of 2.48 on the cold-climate unit fit for this climate. Below the 25°F line where a standard machine starts leaning on resistance backup, Madison sits firmly in cold-climate territory, so that's the class of unit priced here. Source: NOAA station Dane Co Regional-Truax Field, 5.6 miles from Madison, the closest one on record.
What it actually costs to run, year to year
Electricity use for heating alone comes out to about 5,896 kWh a year on the 2000-square-foot reference house; folding in cooling puts the electric bill near $1,235 a year. Madison's gas rate of $10.74 per Mcf, applied to the 60 Mcf a year the furnace burns, puts the current furnace-and-AC running cost near $832 a year, against 18.87¢ 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 $11,545 behind.
The break-even point in Madison
The heat pump would become the cheaper option in Madison if electricity fell to 11.6¢/kWh (from 18.87¢) or gas rose above $17.44 per Mcf (from $10.74). At today's prices a cheaper quote cannot rescue the gas comparison in Madison, since there is no yearly saving to recover it from.
If your home heats with electric baseboard instead of gas
Gas isn't universal in Madison, many houses run on electric heat already. Swap the comparison to resistance heat instead of gas, and Madison's answer improves. About $1,710 a year comes back this way, enough that the 5.8-year payback clears the $10,000 premium comfortably within the equipment's life.
Where Madison ranks in this dataset
Ranked against the other 3206 cities covered, Madison comes in at 284 for heating severity, 1 would be the coldest place in the dataset, and 77 by population, where 1 is largest. 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 Madison
About 285,300 people live in Madison, Wisconsin, 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.
Ask a local HVAC contractor for a quote before committing either way.
Where Madison's figure comes from
The methodology guide walks through exactly how Madison's 2.48 seasonal COP and the rest of this page's numbers get built. Madison's -9°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.