Heat Pump Payback in Peru, IN
Will a heat pump pay off in Peru, IN?
In Peru, a heat pump would cost more to run each year than what you have now. $5,500 is what Peru would pay extra to go electric rather than replace the furnace and AC with the same again. The heat pump would cost about $163 more a year to run than the furnace it replaces, a premium with no payback. There's no spin on that: Peru's numbers say wait.
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Why Peru's climate drives this number
4675 heating degree days pile up here every year, so Peru has a real but manageable winter; the cooling side runs to 1026 cooling degree days, where summers are hot enough that cooling matters as much as heating. Sizing runs off the design temperature, not the average day: -7.6°F here (coldest 2024 reading -7.8°F), which works out to a seasonal COP of 2.52 for the cold-climate class of unit this climate calls for. Below the 25°F line where a standard machine starts leaning on resistance backup, Peru sits firmly in cold-climate territory, so that's the class of unit priced here. Source: NOAA station Grissom AFB Airport, 8.6 miles from Peru, the closest one on record.
The yearly running costs in Peru
A 2000-square-foot house here would pull roughly 4,698 heating kilowatt-hours annually on top of cooling, totalling about $949 a year on electricity. Peru's gas rate of $11.49 per Mcf, applied to the 49 Mcf a year the furnace burns, puts the current furnace-and-AC running cost near $786 a year, against 17.03¢ 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 $7,946 behind.
How sensitive Peru's result is to prices
The heat pump would become the cheaper option in Peru if electricity fell to 13.2¢/kWh (from 17.03¢) or gas rose above $14.84 per Mcf (from $11.49). At today's prices a cheaper quote cannot rescue the gas comparison in Peru, since there is no yearly saving to recover it from.
Electric resistance heat in Peru, compared
Plenty of homes in Peru heat with electricity alone, no gas line involved. Swap the comparison to resistance heat instead of gas, and Peru's answer improves. Switching saves about $1,293 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 7.7 years.
Where Peru ranks in this dataset
Among 3206 cities, Peru's winter puts it at rank 1018 for severity, while its size puts it at rank 2986 for population, 1 in both cases being the extreme. That's the coldest third of the dataset, where climate does most of the work behind this figure.
Next step if you live in Peru
About 11,003 people live in Peru, 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.
Reading further on this page's numbers
Every constant behind this page, the 2.52 seasonal COP, the degree-day corrections, the equipment costs, is documented in the methodology guide. At a -7.6°F design temperature, Peru sits in cold-climate territory; the guide to that class of unit explains why.