Heat Pump Water Heater Calculator in Indiana
See whether a heat pump water heater is worth it in Indiana. Compares operating costs against electric, gas ($1/therm), or propane using local rates ($0.144/kWh).
Data last updated July 2026. Sources & methodology
What Indiana Residents Should Know
Electricity in Indiana averages $0.144 per kWh — below the national average. For a typical three-person household, heating water with a standard electric resistance tank costs roughly $440 per year, while a heat pump water heater doing the same job draws about a third of the electricity, costing around $116. That gap, roughly $324 every year, is what pays off the higher upfront price.
Against natural gas the math is closer but still favorable in Indiana: at $1.00 per therm, a standard gas tank costs roughly $155 per year for the same household, versus about $116 for a heat pump water heater. Whether the difference justifies switching depends on installation cost and how long you plan to stay — run the calculator above with your actual numbers.
One practical note for Indiana homeowners: heat pump water heaters need roughly 700–1,000 cubic feet of surrounding air and run best in a garage, basement, or utility room that stays above about 40°F, since they pull heat from the air around them. With a typical 10–15 year lifespan, the annual savings above usually repay the higher purchase price well within the unit's service life.
With the federal 25C credit having ended December 31, 2025, state and utility programs are now the main incentives — Indiana residents can access up to $1,325 through state heat pump programs, and many utilities offer their own water heater rebates of $300–$1,500. Heat pump water heaters typically install for $2,500–$4,000, so these rebates meaningfully shorten the payback period.
Avg. Electricity Rate
$0.144/kWh
Avg. monthly bill: $143
Regular Gas Price
$3.10/gal
Natural gas: $1.00/therm
Incentives in Indiana
Federal clean energy tax credits ended in late 2025 under legislation passed in July 2025; they are shown below for reference since recent purchasers may still claim them. State programs are governed separately and many remain active — always verify current details with the program before purchasing.
| Incentive | Type | Amount | Description |
|---|---|---|---|
| Energy Efficient Home Improvement Credit (Heat Pump - 25C)Ended | tax credit | 30% | Federal tax credit of 30% up to $2,000 for qualifying heat pumps. Ended December 31, 2025 — systems placed in service after that date do not qualify. State and utility heat pump rebates remain available in many states. |
| AES Indiana Heat Pump Rebate | rebate | $725 | Rebates of $275-$725 for a qualifying air-source or mini-split heat pump, based on efficiency. AES Indiana customers using a network contractor. |
| AES Indiana Heat Pump Water Heater Rebate | rebate | $600 | $600 rebate for a qualifying heat-pump water heater. AES Indiana customers using a network contractor. |
Heat Pump Water Heater in Indiana: Frequently Asked Questions
- Is a heat pump water heater worth it in Indiana?
- For a typical household in Indiana, a heat pump water heater uses about a third of the electricity of a standard electric tank — roughly $116 a year versus $440 — saving about $324 annually, which is what pays back the higher purchase price.
- How much does a heat pump water heater cost to run in Indiana?
- At Indiana's $0.144/kWh rate, a heat pump water heater costs roughly $116 per year to run for a three-person household.
- Are there rebates for heat pump water heaters in Indiana?
- Yes. Indiana programs including AES Indiana Heat Pump Rebate and AES Indiana Heat Pump Water Heater Rebate can help, and many utilities add water-heater rebates of $300–$1,500. The federal 25C credit ended December 31, 2025.
Run the Heat Pump Water Heater Calculator
Use our free calculator pre-filled with Indiana data to see your personalized results.
Open CalculatorHeat Pump Water Heater by State
Learn More About Water Heating
Where Can You Install a Heat Pump Water Heater? Garage, Basement, and Cold-Climate Guide
Heat pump water heaters need air, drainage, and headroom. Where they work best — garage vs basement vs utility room — plus the honest answer for cold climates.
6 min read
Heat Pump Water Heater Pros and Cons: What Owners Wish They'd Known
An honest look at heat pump water heater pros and cons — real savings, slower recovery, noise, space needs, and who should (and shouldn't) buy one.
6 min read
Heat Pump Water Heater vs. Gas: Which Costs Less?
Compare heat pump and gas water heater costs head-to-head. Annual operating cost tables at different gas and electricity prices, upfront costs, and when each wins.
6 min read