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Short answer: yes, your electric bill goes up. But your total energy costs almost always go down — often dramatically. Use our calculator below with real GMP, VEC, and BED rates to see your projected savings.
Asking "will a heat pump raise my electric bill?" is like asking "will buying groceries raise my food spending?" when you're currently eating at restaurants every night. Yes, one number goes up — but your total spending goes down.
Oil Heat
~$3,200/yr
At $3.50+/gal for typical VT home
Propane Heat
~$2,800/yr
At $3.20+/gal for typical VT home
Heat Pump
~$1,000-$1,600/yr
Electric cost at GMP rates
Enter your current heating setup to see how switching to a heat pump will affect your electric bill and total energy costs with Vermont utility rates.
Total spent on heating oil per year
Estimated Annual Net Savings
$1,292/yr
You save $108/month on average by switching from heating oil to a heat pump.
$2,500/yr
Heating Oil — this goes away with a heat pump
+$1,208/yr
~5,629 kWh/yr at $0.21/kWh
Save $215/mo
Electric bill rises ~$201/mo but fuel bill drops ~$417/mo
Roughly the same as current AC
Heat pump cooling is as efficient or better than traditional AC
How it works: Your heat pump operates at an average COP of 3.1 in Vermont, meaning it produces 3.1x more heat energy than the electricity it consumes. Oil furnaces are only 78-87% efficient — most of the energy goes up the chimney.
Rate discount available: GMP offers time-of-use rates with off-peak at $0.1452/kWh — running your heat pump overnight can reduce costs by 30-35%. Efficiency Vermont also offers $350-$400/indoor unit in rebates, and GMP adds $200/unit (plus $2,000 for income-eligible households).
Vermont's 7,200 heating degree days mean your heat pump works hard Oct–Apr. Cold-climate models maintain efficiency down to -15°F+.
If you have AC:
Roughly the same or slightly lower — heat pumps are more efficient than window units or older central AC.
If you don't have AC:
You gain air conditioning at ~$30-$50/month — a huge comfort upgrade for Vermont's increasingly warm summers.
Vermont summers are mild (500 CDD), but heat waves are becoming more common. A heat pump provides AC without a separate unit.
Typical oil heating cost
$2,800-$3,800
Eliminated entirely
New electric increase
$1,000-$1,600
~4,700-7,500 kWh/yr
Net annual savings
$1,200-$2,500
Plus free AC in summer
Your electric utility significantly impacts heat pump operating costs. Here's how Vermont's three main utilities compare.
| Utility | Rate/kWh | Coverage | Annual HP Cost* | TOU Available |
|---|---|---|---|---|
| Green Mountain Power | $0.2146 | ~75% | $1,009 | Yes — $0.1452 off-peak |
| VT Electric Coop | $0.2348 | ~15% | $1,104 | No |
| Burlington Electric | $0.1837 | ~3% | $863 | Yes |
*Estimated annual heat pump electricity cost for a typical 2,000 sq ft Vermont home (~4,700 kWh/yr). Actual costs vary by home size, insulation, and thermostat settings.
GMP's time-of-use plan drops your rate from $0.2146 to $0.1452/kWh during off-peak hours. Since heat pumps run heavily overnight (when it's coldest), most heating electricity falls during off-peak. A typical GMP customer can reduce annual heat pump costs from ~$1,009 to ~$680-$750.
Peak hours: weekdays 4-9 PM ($0.3407/kWh). All other hours are off-peak.
These rebates don't lower your electric rate, but they reduce the upfront cost — improving your overall payback period.
Efficiency Vermont
$350-$400/indoor unit (ductless)
GMP Bonus
$200/unit + $2,000 income-eligible
VEC / VPPSA
$1,000 income-eligible bonus
Typical 3-Zone Total
$1,050-$3,200 in combined rebates
Vermont is Climate Zone 6 with ~7,200 heating degree days. Heat pump efficiency varies with outdoor temperature — here's what that means for your electric bill.
COP 3.5-4.0
350-400% efficient. $1 of electricity produces $3.50-$4.00 of heat. Most fall/spring days.
COP 2.5-3.0
250-300% efficient. Still 2.5-3x better than any furnace. Majority of winter days.
COP 1.5-2.0
150-200% efficient. Still better than electric resistance (100%). ~15-25 days/yr in VT.
Standard heat pumps lose significant capacity below 20°F. In Vermont, you need cold-climate certified models (Mitsubishi Hyper-Heating, Fujitsu XLTH, Daikin Aurora) that maintain rated capacity down to -13°F to -22°F. These models cost $500-$1,000 more per unit but deliver dramatically better performance during Vermont's coldest months.
Read our Vermont cold-climate heat pump guideSwitch to TOU pricing and let your heat pump run during off-peak hours ($0.1452 vs $0.2146). Most heating happens overnight when rates are lowest.
Efficiency Vermont offers free energy audits and subsidized insulation. Reducing heat loss by 20-30% means your heat pump works less and your electric bill stays lower.
Heat pumps work best at consistent temperatures. Set to 68°F and leave it — don't turn down at night. "Set it and forget it" is actually more efficient for heat pumps.
A 6-8 kW solar array offsets 4,000-7,500 kWh/yr of heat pump electricity. Vermont's net metering credits at full retail rate, making solar + HP an excellent combination.
The most effective way to manage your heat pump's electric cost is to generate your own power. A properly sized solar array can offset all the additional electricity your heat pump uses, making your heating essentially free after payback.
For a typical Vermont home switching from oil heat, expect your electric bill to increase $80-$150/month during winter. However, you eliminate $300-$500/month in oil costs, resulting in net savings of $100-$350/month during heating season. Annual net savings typically range from $800-$2,500 depending on your utility, home size, and current fuel.
Burlington Electric Department (BED) has the lowest residential rate at $0.1837/kWh. Green Mountain Power (GMP) is next at $0.2146/kWh, and Vermont Electric Cooperative (VEC) is highest at $0.2348/kWh. GMP offers time-of-use rates where off-peak drops to $0.1452/kWh — ideal for overnight heating.
Yes. Modern cold-climate heat pumps operate efficiently down to -13°F to -22°F. In Vermont (Climate Zone 6, ~7,200 HDD), the average heating COP is 2.5-3.0, meaning for every dollar of electricity, you get $2.50-$3.00 worth of heat. Even at -15°F, cold-climate models maintain a COP of 1.5-2.0 — still more efficient than any furnace.
Yes. GMP's time-of-use plan offers off-peak rates of $0.1452/kWh (compared to standard $0.2146/kWh). Off-peak hours cover overnight and early morning — exactly when heating demand peaks. Running your heat pump during off-peak hours can reduce electricity costs by 30-35%.
It's an excellent combination. A 6-8 kW solar array can offset most of the 4,000-7,000 kWh/year your heat pump uses, effectively eliminating the electric bill increase. Vermont's net metering program credits you at retail rate. Combined with Efficiency Vermont heat pump rebates, the payback period is typically 7-10 years for the combined system.
Efficiency Vermont offers $350-$400 per indoor unit for ductless heat pumps. GMP adds $200/indoor unit (plus $2,000 for income-eligible households). For a typical 3-zone ductless system, you could receive $1,050-$1,800 in combined rebates. Income-eligible households in GMP territory can receive up to $3,200 in additional rebates. These rebates don't reduce your electric bill but offset the upfront cost, improving overall payback.
Our calculator gives estimates — a professional assessment gives you exact numbers for your home, insulation level, and utility territory. Free quotes, no obligation.