Indianapolis, IN Heat Pump Leasing & Installation
In this guide
01
Benefits of Palmetto Heat Pumps
Say goodbye to clunky old systems and surprise repairs. Palmetto Comfort Plan gives you a brand-new heat pump, installation, and full support, all wrapped into one subscription.
Year Round Comfort
A high-efficiency heat pump keeps your home cool in summer, warm in winter, and your energy use in check all year long.
Forget the maintenance
With a Comfort Plan subscription, installation and maintenance are fully covered, no surprise bills, no weekend DIY.
Rewards for renewing
Stick with us and earn credits toward your next system upgrade. It’s our way of saying thanks for building a cleaner, comfier future with us.
02
Indianapolis, IN Heat Pump Load Calculator
Use our calculator below to estimate your home’s heating and cooling needs based on ACCA-standard design conditions for Indianapolis: 91°F cooling, -5°F heating, and 72°F indoor comfort. For a precise Manual J load calculation and personalized quote, connect with Palmetto’s team. Get in touch with our team for an official quote.
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Home location & size
Your home’s location and size directly impact heating needs.
Step 2 of 3
Home attributes
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Additional details
Description of what this means for context.
Estimated Heating Needs
Your home’s location falls within the a climate zone with the average extreme winter falling between 10° – 15° F.
Home Details
Recommended equipment capacity
60,000 BTU
5 Tons
Calculated Cooling Mode
102,000 BTU
8.5 Tons
03
Buy it or finance it. Your comfort, your call
There's no wrong way to get cozy. Here's how the options stack up, so you can choose what works best for you.
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Loan |
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|---|---|---|---|
| Payment schedule | $0 upfront, then monthly subscription | Full price upfront | $0 upfront, then monthly payment |
| Term length | 10 or 12 years | None | Variable |
| End of term options | Flexible with 25% renewal term credits to new system | No credits to new system | No credits to new system |
| Maintenance included | |||
| Eligible for incentives |
Cash
Loan
Local Incentives
Indianapolis, IN Heat Pump Rebates & Incentives
Local and federal incentive programs can significantly reduce the cost of a new heat pump system. Here are the programs available to Indianapolis homeowners.
Indiana HOMES Rebate
Up to $8,000The Home Efficiency Rebate (HOMES) provides cost savings to both single family and multifamily residents, on whole-home retrofits achieving a minimum of 20% predicted energy savings. A qualifying project can include a combination of energy-efficient products, such as Energy Star-rated HVAC equipment and water heaters, and building improvements, which together must save at least 20% of a home's energy usage.
Indiana HEAR Rebate
Up to $14,000The HEAR program helps low- and moderate-income households purchase energy-efficient equipment. Residents can qualify for funding to offset the cost of heat pump HVAC systems, water heaters, and clothes dryers; Energy Star-certified cooktops and stoves; electrical panel and wiring upgrades; and insulation, air sealing, and mechanical ventilation projects.
NIPSCO Heat Pump Rebate
$800 - $1,000Rebates for high-efficiency heating and cooling equipment – including furnaces, air conditioners, boilers, heat pumps, kitchen appliances, smart Wi-Fi thermostats and other equipment – help you save energy and money. Current rebates are available for equipment purchased and installed between January 1, 2026 and November 30, 2026.
Federal IRA Tax Credit
Up to $2,000The Inflation Reduction Act provides a federal tax credit of up to $2,000 for qualifying heat pump installations through 2032.
Indianapolis homeowners have access to multiple active heat pump rebate programs in 2026. The Indiana Energy Saver Program offers the HOMES rebate (up to $8,000 for whole-home efficiency retrofits) and the HEAR rebate (up to $14,000 for low and moderate-income households), plus NIPSCO utility rebates ($800-$1,000) for qualifying heat pump installations. Combined with the federal IRA tax credit (up to $2,000 through 2032), homeowners can stack these incentives to significantly reduce heat pump installation costs. Palmetto can help you navigate these programs, verify your eligibility, and maximize your total savings across all available rebates and tax credits.
Incentive information is based on publicly available data as of 2026 and may change. Contact program administrators to verify current availability and eligibility requirements.
04
Climate Zones
Indianapolis sits in IECC Climate Zone 6, which means cold winters with design temperatures around -5°F and warm summers reaching 91°F. This temperature range directly impacts which heat pump systems will keep your home comfortable year-round without overworking or underperforming. At Palmetto, we understand Indianapolis's climate and can help you find the right system for your home. Explore the climate zones below or enter your ZIP code to confirm yours.
Climate Zone 1
Climate zone 1 is not typically seen within the United States outside of Alaska. It represents the coldest climates on the planet.
Climate Zone 1A
Avg. extreme winters: -60° to -55° F
Climate Zone 1B
Avg. extreme winters: -55° to -50° F
Indianapolis Electricity Prices
Understanding electricity costs in Indianapolis helps you make smarter decisions about your home's heating and cooling systems.
Indiana electricity rates have climbed from 13.4 cents per kWh in 2021 to 14.8 cents in 2024. While rates remain slightly below the national average, Indianapolis homeowners are still paying more each year to power their homes.
Heat pumps offer a practical solution to rising electricity costs. Because they're 2-3 times more efficient than traditional HVAC systems, they use significantly less electricity to deliver the same amount of heating and cooling for your home.
As electricity rates continue their upward trend, the efficiency advantage of heat pumps becomes even more valuable. Over the lifetime of your system, this efficiency translates to meaningful savings on your monthly energy bills.
Price of Energy: Indiana vs National Average
Indianapolis Area Utility Providers
Indianapolis residents are served primarily by two utility providers: AES Indiana and Duke Energy. As of 2023, both utilities offered electricity rates below both the state average of 14.90¢ per kWh and the national average of 16.0¢ per kWh.
AES Indiana's rate of 13.8¢ per kWh and Duke Energy's rate of 14.3¢ per kWh reflect Indiana's energy mix, which relies heavily on affordable natural gas and coal generation, helping keep costs competitive compared to other regions.
These competitive electricity rates make Indianapolis an ideal location for heat pumps. Because heat pumps run on electricity and are significantly more efficient than traditional heating systems, homeowners can reduce their total energy spending even while shifting entirely to electric heating and cooling.
Indianapolis Utilities Electricity Rates
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Repair versus replace
When a heat pump is in need of repair it is worth considering whether a replacement would be a better investment. While each case is unique, we generally recommend investing in a new unit when repairs exceed $5,000.
A heat pump's lifetime is impacted by a number of factors including environment, use and the quality of the unit. It's important to choose the right unit for your climate zone and home's unique attributes.
When you are in need of repair, we recommend choosing a service provider that is an expert in the heat pump brand you have installed, and checking online reviews to ensure you are investing in the right level of service.
| Potential repair | Cost range | Description |
|---|---|---|
| Capacitor Replacement | $150 - $400 | Common issue when unit struggles to start or makes a humming noise. Capacitors store the electrical energy needed to start the compressor and fan motors. |
| Refrigerant Recharge | $250 - $750 | Needed when the system loses cooling or heating efficiency due to low refrigerant levels. Includes leak detection, repair of minor leaks, and recharging the system to the manufacturer-specified level. |
| Reversing Valve Replacement | $450 - $900 | Required when the unit cannot switch between heating and cooling modes. The reversing valve directs refrigerant flow and is unique to heat pump systems. |
| Compressor Replacement | $1,500 - $3,000 | Major repair needed when the unit fails to heat or cool entirely. The compressor is the heart of the system, circulating refrigerant between the indoor and outdoor coils. |
| Evaporator/Condenser Coil Replacement | $1,200 - $2,800 | Replacement needed when coils develop leaks or corrosion that cannot be economically repaired. Coil damage reduces heat transfer efficiency and can cause refrigerant loss. |
| Control Board Replacement | $500 - $1,200 | Required when the system has electrical failures or erratic behavior. The control board manages all system operations including defrost cycles, fan speeds, and compressor staging. |
| Full System Replacement | $4,500 - $8,000+ | When repairs exceed the value of the unit or multiple major components fail simultaneously. Includes removal of the old system and installation of a new heat pump with updated refrigerant lines and electrical connections. |
Frequently Asked Questions
Yes, heat pumps make sense in Indianapolis. Modern cold-climate heat pumps work efficiently even at Indianapolis's design heating temperature of -5°F, providing both heating and cooling for the city's hot summers (reaching 91°F) and cold winters. With Indiana's electricity rate at 14.8¢ per kWh, heat pumps typically cost less to operate than traditional heating systems.
Indianapolis homeowners have flexible options to go electric. Palmetto's Comfort Plan offers $0 upfront with maintenance included, while direct purchase may qualify for up to $2,000 in federal tax credits under the Inflation Reduction Act. Either way, you get year-round comfort from one efficient system designed to handle Indianapolis's climate extremes.
Heat pumps perform well in Indianapolis's Climate Zone 6, maintaining efficiency even during cold winters. Modern cold-climate heat pumps effectively heat homes down to -5°F (Indianapolis's design heating temperature) while using significantly less energy than traditional furnaces. With Indiana's electricity rate at 14.8¢ per kWh, heat pumps typically reduce heating costs by 30-50% compared to electric resistance or oil heating systems.
During Indianapolis's mild springs and falls, heat pumps excel at both heating and cooling, maximizing year-round efficiency. Summer cooling performance remains strong even at the 91°F design temperature. Palmetto offers heat pumps through our Comfort Plan with $0 upfront and included maintenance, or through direct purchase where you may qualify for up to $2,000 in federal tax credits under the Inflation Reduction Act.
The choice between leasing and buying a heat pump in Indianapolis depends on your financial priorities and homeownership plans. Buying means paying upfront but owning the equipment outright, plus you may qualify for up to $2,000 in federal tax credits under the Inflation Reduction Act. Leasing through a Comfort Plan requires $0 upfront and includes all maintenance and repairs for predictable monthly costs.
Indianapolis sits in Climate Zone 6 with cold winters reaching -5°F, meaning your heat pump will work year-round and impact your 14.8¢ per kWh electricity costs significantly. If you prefer avoiding large upfront expenses and want maintenance handled for you, leasing offers peace of mind. If you want to maximize long-term savings and capture available incentives, purchasing may be the better fit.
Heat pump costs in Indianapolis typically range from $5,000 to $20,000 for a complete installation, depending on your home's size, existing ductwork, and the system's efficiency rating. Climate Zone 6's cold winters (design temp: -5°F) may require a more robust system, which can affect the final price.
Palmetto offers two payment options to fit your budget: a Comfort Plan with $0 upfront cost and predictable monthly payments that include all maintenance and repairs, or direct purchase where you own the equipment outright and may qualify for up to $2,000 in federal tax credits under the Inflation Reduction Act plus local rebates.
For Indianapolis homeowners, heat pumps are typically worth the investment financially. Modern heat pumps can reduce heating and cooling costs by 30-50% compared to traditional systems, even in Climate Zone 6 where winter temperatures can drop to -5°F. With Indiana's electricity rate at 14.8¢ per kWh, most households see meaningful savings on their monthly energy bills.
The financial picture improves further when you consider available incentives and flexible payment options. Direct purchase buyers may qualify for up to $2,000 in federal tax credits under the Inflation Reduction Act, plus local rebates. Alternatively, Palmetto's Comfort Plan requires $0 upfront and includes all maintenance and repairs, eliminating unexpected costs while delivering immediate savings on your energy bills.
Heat pumps in Indianapolis are installed by licensed HVAC contractors who specialize in heating and cooling systems suitable for Climate Zone 6 conditions. These professionals ensure your system can handle Indianapolis's winter design temperatures of -5°F and summer highs around 91°F, making proper installation critical for year-round comfort and efficiency.
Palmetto partners with certified local installers to provide heat pump installation through two options: a Comfort Plan with $0 upfront cost and included maintenance, or direct purchase where you own the equipment and may qualify for up to $2,000 in federal tax credits. Both options ensure professional installation tailored to Indianapolis's climate, helping you manage energy costs with Indiana's 14.8¢ per kWh electricity rates.
A heat pump is actually a type of HVAC system. HVAC stands for Heating, Ventilation, and Air Conditioning—it's an umbrella term for all systems that heat and cool your home. Heat pumps are a specific HVAC technology that efficiently moves heat rather than generating it, providing both heating and cooling from a single system.
In Indianapolis's Climate Zone 6, where winter temperatures can drop to -5°F, modern heat pumps work effectively year-round while using electricity at 14.8¢ per kWh. Palmetto offers heat pump installation through a $0-upfront Comfort Plan with included maintenance, or direct purchase options that may qualify for up to $2,000 in federal tax credits under the Inflation Reduction Act.