Is Electrification Worth It in Kentucky?

Kentucky has Louisville Gas & Electric, and they really want you to use gas.

Natural gas costs $0.95/therm—cheap. Electricity runs $0.11/kWh—also cheap. Climate is moderate (4,600 heating degree days in Louisville). This is classic "both options work fine" territory. LG&E offers some heat pump rebates, but they're not huge. Most Kentucky homes have gas furnaces or heat pumps depending on when they were built.

If you're replacing both heating and cooling, get a heat pump. If your gas furnace works and you just need AC, install AC and keep the furnace. Neither choice is wrong. The exception: If you're in rural Kentucky heating with propane, switch to a heat pump yesterday. Propane is $2.50+/gallon and you're getting ripped off.

Updated December 2024Data from EIA, DSIRE, NREL
Heat Pump Payback
Not Recommended
With incentives
Annual Savings
$2,420
Full electrification
Available Incentives
$10,250
Federal + state + utility
CO₂ Reduction
12.8 tons
Per year

Kentucky Energy Costs

Electricity Rate
$0.125/kWh
Natural Gas Rate
$1.45/therm
Average Electric Bill
$128/month
Average Gas Bill
$65/month
Climate Zone
mixed
Heating Degree Days
4,600
Cooling Degree Days
1,250

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-$2,350
Net Cost$9,650 - $19,650
Annual Savings$115/yr
Payback PeriodNot Recommended
Lifetime ROI17%
CO₂ Reduction2.9 tons/yr
☀️

Solar Panels

Upfront Cost$15,000 - $30,000
Total Incentives-$4,500
Net Cost$10,500 - $21,000
Annual Savings$878/yr
Payback Period18.8 years
Lifetime ROI114%
CO₂ Reduction3.3 tons/yr
💧

Heat Pump Water Heater

Upfront Cost$2,500 - $4,500
Total Incentives-$2,250
Net Cost$250 - $2,250
Annual Savings$248/yr
Payback Period6.1 years
Lifetime ROI81%
CO₂ Reduction1.8 tons/yr

EV Charger + Electric Vehicle

Upfront Cost$800 - $2,500
Total Incentives-$1,150
Net Cost$-350 - $1,350
Annual Savings$1,180/yr
Payback Period0.5 years
Lifetime ROI1524%
CO₂ Reduction4.8 tons/yr

Full Electrification Package

Total Upfront Cost
$30,300 - $59,000
Total Incentives
-$10,250
Net Cost After Incentives
$20,050 - $48,750
Annual Energy Savings
$2,420/year
Lifetime Savings (18 years)
$43,553
Simple Payback
15.9 years
💡

Best ROI for Kentucky

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 1524%.

0.0 years slower than average compared to the national average.

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