Is Electrification Worth It in Tennessee?

Nashville gets 3,500 heating degree days and pays $0.11/kWh for electricity.

This is almost ideal for heat pumps. You need moderate heating, serious cooling, and you've got cheap TVA electricity. Most new Tennessee homes already have heat pumps because builders figured out decades ago that they're cheaper to operate than gas or electric resistance in this climate.

If you're one of the few Tennessee homes still heating with propane, oil, or electric baseboards, switching to a heat pump will save you $800-1,500 per year. Even if you have natural gas, upgrading to a modern heat pump makes sense if your current system is 15+ years old. Payback is typically 5-7 years.

Updated December 2024Data from EIA, DSIRE, NREL
Heat Pump Payback
Not Recommended
With incentives
Annual Savings
$2,396
Full electrification
Available Incentives
$10,400
Federal + state + utility
CO₂ Reduction
12.8 tons
Per year

Tennessee Energy Costs

Electricity Rate
$0.125/kWh
Natural Gas Rate
$1.42/therm
Average Electric Bill
$135/month
Average Gas Bill
$62/month
Climate Zone
mixed
Heating Degree Days
3,900
Cooling Degree Days
1,500

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$100/yr
Payback PeriodNot Recommended
Lifetime ROI15%
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-$2,300
Net Cost$200 - $2,200
Annual Savings$239/yr
Payback Period6.2 years
Lifetime ROI79%
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$1,180/yr
Payback Period0.4 years
Lifetime ROI1524%
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
$2,396/year
Lifetime Savings (18 years)
$43,121
Simple Payback
16.0 years
💡

Best ROI for Tennessee

Based on your state's energy costs and climate, EV Charger offers the best return on investment with an average payback of 0.4 years and an ROI of 1524%.

0.0 years slower than average compared to the national average.

Ready to electrify your Tennessee home?

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