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I know heat pumps are all the rage on HN these days, but I looked into them for myself in Indiana, and they don't seem to make financial sense at all, unfortuna

I know heat pumps are all the rage on HN these days, but I looked into them for myself in Indiana, and they don't seem to make financial sense at all, unfortunately. My utility, NIPSCO, charges $0.25699/therm for gas. There are 29.3 kWh of energy in 1 therm of gas, and my furnace is 95% efficient, so this works out to an electric equivalent of $0.009/kWh. That's more than an order of magnitude cheaper than the electric equivalent! Even a really efficient heat pump isn't going to be able to overcome that. Am I doing the calculations wrong, or are my utility rates way out of whack, or are heat pumps just generally more expensive for everyone to run, but they still think it's worth it? I'm trying to understand how my situation is so different, because I was pretty excited about swapping out my gas furnace for a heat pump and went down that rabbit hole quite a ways before realizing my specific utility rates don't seem to make sense for it.

loudmax 4y ago
Heat pumps don't just convert electricity into heat. They work like an air conditioner in reverse, concentrating heat from outside into your house. Compared to a traditional heating element they're over 100% efficient.
timmg 4y ago
The thing with heat pumps is that they don't create heat, they pump it. So they are "more than 100% efficient" (meaning: they move more heat than what the equivalent energy is).
trynewideas 4y ago
> My utility, NIPSCO, charges $0.25699/therm for gas Well, there you go. Natural gas in Maine is $1.95 to $3.58 per therm. https://www.maine.gov/energy/heating-fuel-prices https://www.maine.gov/energy/heating-fuel-prices
strgcmc 4y ago
I don't understand how you can compare the price of gas (which you convert into an equivalent $/kWh price, no issues so far), with the price of electricity, without trying to account for how long or how often either heating system has to run for... it's almost certainly not the same amount of time. For example, let's imagine an experiment where 2 heating systems are tasked with doing the same thing -- let's say, to keep a 2000 sq ft home at an even 70F degrees, when the outside air temperature is 0F while the ground temp is whatever-it-is: - How much gas would the gas system consume, over how many hours, to maintain that 70F temp? Maybe it uses X1 amount of gas, over Y1 hours, for Z1 price of gas, so you can multiply that out. - How much electricity would a heat pump consume, over how many hours? Maybe it uses X2 amount of electricity, over Y2 hours, for Z2 price. You're only comparing Z1 and Z2, how could that possibly tell you the whole story? Heat pumps can be >100% efficient (I've seen claims of up to 300% efficiency in ideal conditions), while gas maxes out at about 95%, so I don't know why you wouldn't try to measure/estimate the X and Y variables too, and why you'd only focus on the Z.
- dahfizz 4y ago
  Energy is energy. Regardless of what the source is, or how long the source runs, etc etc the amount of energy needed to heat the home is constant. So what matters when comparing options is the cost of a unit of heat energy ($/kwh). OP showed the cost of heat energy from gas to be $0.009/kWh . No heat pump can produce a kwh of heat for less than $0.009. Even a magical heatpump that is 400% efficient will need electricity costs to be 3.5 cents or less per kwh to be cheaper to run.
hedgehog 4y ago
Relative gas/electric pricing may be a lot different where you are. In the Seattle area gas is around $1.20 per therm which works out to about 24 kWh of heat per dollar. Electricity is around $0.11 per kWh or 27 kWh heat per dollar assuming 300% efficiency for the heat pump, so slightly better here. Of course if you want air conditioning that comes for free as part of the heat pump, and if you add solar that offsets the operating cost. Probably someone somewhere as built a calculator that shows where on the map the tradeoff goes one way or another.
mkozlows 4y ago
You have very, very cheap gas. Suspiciously cheap. Are you sure you're factoring everything in? NIPSCO's rate pages show much higher rates: https://www.nipsco.com/bills-and-payments/billing-programs/choice https://www.nipsco.com/bills-and-payments/billing-programs/c... In Michigan here, it's like $1/therm (doing the conversion from the Mcf they actually bill in). Multiply your gas numbers by four, divide your electric numbers by three (to reflect a COP of 3 -- that is 300% efficiency -- for a typical heat pump), and your order of magnitude goes away. If your gas really is that cheap, then yeah, you're still much cheaper with gas, but also you've got a sweetheart deal on gas.
- crmd 4y ago
  Crying in NYC paying $1.85/therm, i.e. $0.063/kWh, for natural gas, and $0.231 / kWh for electricity.
- losvedir 4y ago
  Bingo! I'm so glad I asked. Yep, I was looking at only part of the rate schedule. Looks like my effective rate is actually closer to $0.96/therm, or $0.033/kWh equivalent. At an electric rate of $0.14/kWh, now we're closer to comparable.
nkurz 4y ago
Your natural gas price (if correct) is much lower than the national average, and even much lower than your regional average. Average natural gas prices in the US for Dec 22 were $1.67/therm while average electric prices were $.17/kWh. Here's a great chart, with regional values also: https://www.bls.gov/regions/midwest/data/averageenergyprices_selectedareas_table.htm https://www.bls.gov/regions/midwest/data/averageenergyprices.... I think you are right though that much of the "hype" is based on avoidance of fossil fuels rather than straight economic advantage. The hope is that eventually the electric grid might be all renewable energy, while the efficiency of burning gas doesn't have much room to go up.
- mkozlows 4y ago
  As far as economic advantage goes, keep in mind that carbon emission famously is an unpriced externality. Everyone's given up on trying to put carbon pricing into place to make the economics "naturally" work out, but in a world where heat pumps and methane gas have similar to-the-consumer pricing, the true cost of heat pumps is lower.

loudmax 4y ago

Heat pumps don't just convert electricity into heat. They work like an air conditioner in reverse, concentrating heat from outside into your house. Compared to a traditional heating element they're over 100% efficient.

timmg 4y ago

The thing with heat pumps is that they don't create heat, they pump it. So they are "more than 100% efficient" (meaning: they move more heat than what the equivalent energy is).

trynewideas 4y ago

> My utility, NIPSCO, charges $0.25699/therm for gas Well, there you go. Natural gas in Maine is $1.95 to $3.58 per therm. https://www.maine.gov/energy/heating-fuel-prices https://www.maine.gov/energy/heating-fuel-prices

strgcmc 4y ago

I don't understand how you can compare the price of gas (which you convert into an equivalent $/kWh price, no issues so far), with the price of electricity, without trying to account for how long or how often either heating system has to run for... it's almost certainly not the same amount of time. For example, let's imagine an experiment where 2 heating systems are tasked with doing the same thing -- let's say, to keep a 2000 sq ft home at an even 70F degrees, when the outside air temperature is 0F while the ground temp is whatever-it-is: - How much gas would the gas system consume, over how many hours, to maintain that 70F temp? Maybe it uses X1 amount of gas, over Y1 hours, for Z1 price of gas, so you can multiply that out. - How much electricity would a heat pump consume, over how many hours? Maybe it uses X2 amount of electricity, over Y2 hours, for Z2 price. You're only comparing Z1 and Z2, how could that possibly tell you the whole story? Heat pumps can be >100% efficient (I've seen claims of up to 300% efficiency in ideal conditions), while gas maxes out at about 95%, so I don't know why you wouldn't try to measure/estimate the X and Y variables too, and why you'd only focus on the Z.

dahfizz 4y ago
Energy is energy. Regardless of what the source is, or how long the source runs, etc etc the amount of energy needed to heat the home is constant. So what matters when comparing options is the cost of a unit of heat energy ($/kwh). OP showed the cost of heat energy from gas to be $0.009/kWh . No heat pump can produce a kwh of heat for less than $0.009. Even a magical heatpump that is 400% efficient will need electricity costs to be 3.5 cents or less per kwh to be cheaper to run.

hedgehog 4y ago

Relative gas/electric pricing may be a lot different where you are. In the Seattle area gas is around $1.20 per therm which works out to about 24 kWh of heat per dollar. Electricity is around $0.11 per kWh or 27 kWh heat per dollar assuming 300% efficiency for the heat pump, so slightly better here. Of course if you want air conditioning that comes for free as part of the heat pump, and if you add solar that offsets the operating cost. Probably someone somewhere as built a calculator that shows where on the map the tradeoff goes one way or another.

mkozlows 4y ago

You have very, very cheap gas. Suspiciously cheap. Are you sure you're factoring everything in? NIPSCO's rate pages show much higher rates: https://www.nipsco.com/bills-and-payments/billing-programs/choice https://www.nipsco.com/bills-and-payments/billing-programs/c... In Michigan here, it's like $1/therm (doing the conversion from the Mcf they actually bill in). Multiply your gas numbers by four, divide your electric numbers by three (to reflect a COP of 3 -- that is 300% efficiency -- for a typical heat pump), and your order of magnitude goes away. If your gas really is that cheap, then yeah, you're still much cheaper with gas, but also you've got a sweetheart deal on gas.

crmd 4y ago
Crying in NYC paying $1.85/therm, i.e. $0.063/kWh, for natural gas, and $0.231 / kWh for electricity.
losvedir 4y ago
Bingo! I'm so glad I asked. Yep, I was looking at only part of the rate schedule. Looks like my effective rate is actually closer to $0.96/therm, or $0.033/kWh equivalent. At an electric rate of $0.14/kWh, now we're closer to comparable.

nkurz 4y ago

Your natural gas price (if correct) is much lower than the national average, and even much lower than your regional average. Average natural gas prices in the US for Dec 22 were $1.67/therm while average electric prices were $.17/kWh. Here's a great chart, with regional values also: https://www.bls.gov/regions/midwest/data/averageenergyprices_selectedareas_table.htm https://www.bls.gov/regions/midwest/data/averageenergyprices.... I think you are right though that much of the "hype" is based on avoidance of fossil fuels rather than straight economic advantage. The hope is that eventually the electric grid might be all renewable energy, while the efficiency of burning gas doesn't have much room to go up.

mkozlows 4y ago
As far as economic advantage goes, keep in mind that carbon emission famously is an unpriced externality. Everyone's given up on trying to put carbon pricing into place to make the economics "naturally" work out, but in a world where heat pumps and methane gas have similar to-the-consumer pricing, the true cost of heat pumps is lower.