Heating Degree Day (HDD)

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Heating Degree Day (HDD): Definition and How to Calculate

What is an HDD?

A Heating Degree Day (HDD) quantifies how much (in degrees) and for how long the outdoor temperature is below a base temperature—commonly 65°F (18°C). HDDs are used to estimate heating demand: the colder the weather relative to the base, the higher the HDD total and the greater the expected need for heating.

Why HDDs matter

  • Energy planning: utilities and building managers use HDDs to estimate fuel and electricity demand for heating.
  • Risk management and trading: HDDs form indexes for weather derivatives and futures that let firms hedge weather-related revenue or cost risks.
  • Operational planning: industries affected by weather (construction, agriculture, facilities) use HDDs to plan staffing, equipment, and logistics.

How to calculate HDD

HDD is calculated so that any negative result is treated as zero (i.e., no heating required when average temperature is at or above the base).

  1. Simple daily method (most common)
  2. Compute the day’s average temperature: (Tmax + Tmin) / 2.
  3. HDD = max(0, 65°F − daily average).
  4. Example: If the average is 50°F, HDD = 65 − 50 = 15 HDD for that day.

  5. Monthly HDD = sum of daily HDDs over the month.

  6. Higher-resolution method

  7. Use more frequent temperature readings (e.g., half-hourly).
  8. For each reading: value = max(0, 65°F − reading).
  9. Daily HDD = (sum of those values) / number of readings per day (48 for half-hourly).

  10. Monthly HDD = sum of daily HDDs for the month.

  11. Notes on numeric examples

  12. If every day of a 30-day month has an average temperature of 50°F, monthly HDD = 15 × 30 = 450.
  13. In weather derivatives, a contract settlement might multiply the monthly HDD sum by a dollar factor (for example, contracts have used $20 per HDD as a settlement multiplier).

Related metric

  • Cooling Degree Day (CDD) — mirrors HDD but measures cooling demand when temperatures exceed the base (commonly 65°F).

Caveats and limitations

  • HDDs are localized: microclimate, building construction, insulation, orientation, solar exposure, and occupant behavior all affect actual heating needs.
  • The 65°F base is a convention; some analyses use other base temperatures depending on climate, building types, or local standards.
  • HDDs indicate potential heating demand but do not account for building-specific efficiency or internal heat gains.

Key points

  • HDD measures degrees below 65°F (18°C) to estimate heating demand.
  • Calculated daily as max(0, 65 − average temperature); monthly HDD is the sum of daily HDDs.
  • Used in energy forecasting, operational planning, and weather-related financial contracts.
  • HDDs are a useful aggregate index but must be interpreted alongside local building and climate context.