Methodology.

1. The energy model

Every calculator on this site — Heat Pump Cost, Heat Pump vs. Traditional HVAC, and all six Case Studies — uses the same simplified degree-day / design-load method to estimate annual heating and cooling energy use. It is not a substitute for a contractor's Manual J load calculation, but it is internally consistent across every system and city we model, which makes head-to-head comparisons fair.

We start from the equipment's nameplate capacity as a proxy for design heating/cooling load:

That design load is then scaled by the location's heating and cooling degree days (base 65°F) and the local design temperature difference to estimate annual thermal load:

The heating-side design temperature difference varies by climate zone (Very Cold: 65°F − (−10°F) = 75°F; Cold: 65°F − 0°F = 65°F; Mixed-Cold: 55°F; Mixed: 45°F; Hot-Humid/Hot-Dry: 35°F). The cooling-side difference uses a standard 95°F outdoor design temperature against a 75°F indoor setpoint, i.e. a fixed 20°F.

Heating-degree-days (HDD) and cooling-degree-days (CDD) come from EIA's 2023 state-level, population-weighted estimates (sourced from NOAA) for the state-level calculators, and from NOAA 1981–2010 climate normals for representative cities (via Golden Gate Weather Services) in the case studies. See §5 for the full citation.

2. Seasonal COP and balance point

A heat pump's coefficient of performance (COP) — the ratio of heat delivered to electricity consumed — is not constant. It falls as outdoor temperature drops, because there's less ambient heat to extract and the compressor has to lift that heat across a wider temperature gap. Manufacturer COP curves for a representative standard heat pump and a representative NEEP-listed cold-climate heat pump anchor our model, referenced against AHRI rating points (47°F, 17°F, 5°F) and cold-climate-specific data down to −13°F. We estimate a single season-weighted COP per calculation rather than modeling every hour of the year:

Colder climates (higher HDD) map to a colder effective temperature and therefore a lower seasonal COP — this is a deliberate simplification of a full 8,760-hour bin-temperature simulation, calibrated so that mild climates land near the top of each curve (COP 3.5–4+) and the coldest U.S. climates land near the bottom (COP 1.8–2.2 for standard units, 2.0–2.5 for cold-climate units), consistent with the published COP-vs-temperature data in our research base.

Below a heat pump's balance point — the outdoor temperature at which its heating capacity can no longer keep up with the building's heat loss — supplemental electric-resistance backup heat (COP ≈ 1.0) makes up the difference. We approximate this with a fixed backup-load fraction rather than a full capacity-curve intersection:

These backup-fraction constants reflect NEEP's cold-climate specification, which requires a demonstrated COP above 1.75 at 5°F and heating-capacity retention above 70% of the 47°F rating — cold-climate units are engineered to carry far more of the load on the compressor alone, versus standard units that lean more heavily on strip heat once temperatures drop below roughly 30–35°F.

3. Installed and operating cost modeling

Installed-cost defaults (equipment + labor) for each heat pump type and tonnage, and for each baseline system (gas furnace + AC, electric resistance, oil furnace, propane furnace), are calibrated against published contractor pricing data — Angi, HomeAdvisor, HomeGuide, EnergySage, and hvacprojectcost.com for heat pumps and gas systems; HomeAdvisor and HomeGuide for electric-resistance and mini-split systems; Angi and Carrier for oil and propane furnaces. Every default is editable — the calculators let you override installed cost, maintenance, and electricity rate with your own contractor quotes.

Maintenance costs default to published annual service-contract ranges per equipment type, and are held flat in nominal dollars across the ownership horizon (no inflation adjustment is applied to any cost category, so all figures are presented in today's dollars).

Every fuel cost — electricity, natural gas, heating oil, propane — is converted to a common cost-per-Btu basis before being multiplied against each system's estimated annual energy use, so switching fuel types doesn't introduce unit-conversion bias into the comparison.

4. Incentive and rebate rules

Federal and state heat pump incentives changed materially during 2025–2026, and the calculators reflect the current rules rather than legacy program terms:

State and utility program figures (Mass Save, NY Clean Heat/NYSERDA, Efficiency Maine, Xcel Energy, PG&E, TVA EnergyRight, and others) are sourced directly from each program's published rate sheet and cross-checked periodically, since several of these programs reduced rebate amounts or depleted funding during 2026.

5. Energy price and climate data sourcing

Electricity

U.S. EIA electricity retail-sales API, residential sector (sectorid=RES), monthly, by state — EIA API v2 documentation.

Natural gas

U.S. EIA natural gas residential price API (natural-gas/pri/sum), monthly, by state — EIA Natural Gas API specification.

Heating oil & propane

U.S. EIA Weekly Fuels Report / Weekly Heating Oil and Propane Survey (petroleum/pri/wfr), regional, with a seasonal collection window of October–March; the site caches the most recent in-season price through the off-season — EIA Heating Oil and Propane Update.

Heating & cooling degree days (state)

EIA 2023 state-level, population-weighted estimates sourced from NOAA — EIA State Energy Indicators, Table N1.

Heating & cooling degree days (representative cities)

NOAA 1981–2010 climate normals, via Golden Gate Weather Services — Normal Heating Degree Days and Normal Cooling Degree Days, underlying methodology at NOAA NCEI U.S. Climate Normals.

Heat pump performance curves

NEEP ccASHP Specification v4.0, ENERGY STAR Most Efficient 2025 criteria, and COP-vs-temperature technical literature from PickComfort, Daikin, and ACEEE/ORNL.

6. Case study assumptions

Each of the six case studies applies the exact formulas above to a representative household profile: a specific city (and its NOAA climate-normal HDD/CDD), a representative home size sized to a specific equipment tonnage, an existing baseline system with stated age and efficiency, and a NEEP-listed or standard heat pump alternative sized to the same load. All energy prices used in the case studies are each state's EIA-reported residential rate as of August 2026.

• Chicago, IL — 2,000 sq ft three-flat, 3-ton system, ComEd territory, 6,340 HDD / 843 CDD (NOAA normals).
• Minneapolis, MN — 3.5-ton system, 7,580 HDD / 753 CDD, oil-furnace baseline.
• Atlanta, GA — 3-ton system, 2,768 HDD / 1,883 CDD, electric-resistance baseline.
• Boston, MA — 3-zone ductless mini-split (~2.5 ton), 5,681 HDD / 747 CDD, oil-furnace baseline.
• Phoenix, AZ — 3.5-ton system, 935 HDD / 4,607 CDD (lowest heating load, highest cooling load in the set), electric furnace + AC baseline.
• Seattle, WA — 2-zone ductless mini-split (~2.0 ton), 4,697 HDD / 189 CDD, electric-baseboard baseline.

Home sizing, equipment tonnage, and baseline-system age/efficiency in each case study are representative constructs chosen to reflect realistic households in that climate and housing stock — not measurements of an actual specific home. Run the Heat Pump vs. Traditional HVAC calculator with your own ZIP code, square footage, and system specs for a figure specific to your situation.

7. Limitations

This model is a simplified degree-day / design-load estimate, not a full building-energy simulation. It does not account for building envelope quality (insulation, air sealing, window performance), internal heat gains, thermostat setback schedules, humidity control energy, or hour-by-hour weather variation within a season. A licensed contractor's Manual J/Manual S load calculation will always be more accurate for a specific home than any web calculator, including this one.

Energy prices, incentive programs, and equipment costs are point-in-time snapshots refreshed on the schedule each data source publishes. Rebate programs in particular are volatile — several tracked in this methodology reduced their rebate amounts or exhausted funding during 2026 — so treat incentive figures as "verify before you commit," not as guaranteed cash in hand. Heatpump Economics is independent analysis, not financial or engineering advice; consult a licensed HVAC contractor and a tax professional before making a purchase decision.