Is Electrification Worth It in Indiana?

Indiana is right on the edge. Could go either way.

About 5,600 heating degree days in Indianapolis. Electricity costs $0.13/kWh. Natural gas is cheap—$0.95/therm from all that Marcellus Shale gas flowing through the region. You need real heating, but winters aren't brutal. Duke Energy and NIPSCO offer some heat pump rebates, but they're not game-changers.

This is a judgment call. If you're replacing both heating and cooling, lean toward a heat pump—you'll probably break even in 8-10 years. If your gas furnace works fine and you just need AC, get a standalone AC unit and keep the furnace. The economics here are marginal unless you're heating with propane (then it's an easy yes).

Updated December 2024Data from EIA, DSIRE, NREL
Heat Pump Payback
Not Recommended
With incentives
Annual Savings
$2,228
Full electrification
Available Incentives
$10,400
Federal + state + utility
CO₂ Reduction
14.3 tons
Per year

Indiana Energy Costs

Electricity Rate
$0.142/kWh
Natural Gas Rate
$1.38/therm
Average Electric Bill
$138/month
Average Gas Bill
$76/month
Climate Zone
cold
Heating Degree Days
5,600
Cooling Degree Days
950

Visual ROI Analysis

Payback Period Comparison

Lower is better • Shortest payback = fastest return on investment

Annual Savings Comparison

Higher is better • More annual savings = greater long-term benefit

Cumulative Net Savings Over Time

Point where line crosses $0 = payback achieved • Steeper line = faster savings growth

Return on Investment by Upgrade

🌡️

Heat Pump HVAC

Upfront Cost$12,000 - $22,000
Total Incentives-$2,400
Net Cost$9,600 - $19,600
Annual Savings$-5/yr
Payback PeriodNot Recommended
Lifetime ROI5%
CO₂ Reduction4.7 tons/yr
☀️

Solar Panels

Upfront Cost$15,000 - $30,000
Total Incentives-$4,500
Net Cost$10,500 - $21,000
Annual Savings$920/yr
Payback Period18.0 years
Lifetime ROI119%
CO₂ Reduction3.1 tons/yr
💧

Heat Pump Water Heater

Upfront Cost$2,500 - $4,500
Total Incentives-$2,300
Net Cost$200 - $2,200
Annual Savings$201/yr
Payback Period7.7 years
Lifetime ROI67%
CO₂ Reduction1.8 tons/yr

EV Charger + Electric Vehicle

Upfront Cost$800 - $2,500
Total Incentives-$1,200
Net Cost$-400 - $1,300
Annual Savings$1,112/yr
Payback Period0.5 years
Lifetime ROI1440%
CO₂ Reduction4.8 tons/yr

Full Electrification Package

Total Upfront Cost
$30,300 - $59,000
Total Incentives
-$10,400
Net Cost After Incentives
$19,900 - $48,600
Annual Energy Savings
$2,228/year
Lifetime Savings (18 years)
$40,098
Simple Payback
17.4 years
💡

Best ROI for Indiana

Based on your state's energy costs and climate, EV Charger offers the best return on investment with an average payback of 0.5 years and an ROI of 1440%.

0.0 years slower than average compared to the national average.

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