Heat Pump Savings Calculator

How the Calculator Works

1. Enter your ZIP code — we load your state's EIA residential electricity rate.
2. Select your current heating system — gas, oil, propane, or electric resistance, each with fuel cost and efficiency (AFUE) assumptions.
3. Choose your home size — we estimate annual heating BTU demand based on your climate zone's heating degree days.
4. See your savings — we compare your current annual fuel cost to heat pump electricity cost using a climate-appropriate COP (Coefficient of Performance).

What Is a Heat Pump?

A heat pump is a year-round HVAC system that moves heat between indoors and outdoors. In winter it extracts heat from outdoor air (even at very cold temperatures) and pumps it inside. In summer it works in reverse as an air conditioner.

Modern cold-climate heat pumps operate efficiently down to -13°F, making them viable in all US climate zones. The key efficiency metric is COP (Coefficient of Performance) — a COP of 3.0 means 3 units of heat energy delivered for every 1 unit of electricity consumed.

IRA Incentives That Reduce Your Costs

The Inflation Reduction Act created two overlapping incentives for heat pump installations:

• 25C Tax Credit: 30% of equipment and installation cost, up to $2,000 per year. Available to all income levels. Applied at tax filing.
• HEEHRA Rebate: Point-of-sale rebate up to $8,000 for households below 80% area median income (AMI), or up to $4,000 for 80–150% AMI. Availability depends on your state's program rollout — check energysaver.gov.

These incentives can dramatically reduce your payback period. The calculator assumes a $2,000 tax credit as the conservative baseline when computing payback.

Efficiency Assumptions Used