Heat Pumps, The Best of Both Worlds

By Ben Matthews

Today we are seeing higher demand for air conditioning systems in the Bay Area than ever before in response to rising temperatures. Experts report a 2-degree Fahrenheit increase in average temperatures in the past 50 years; six of our hottest years in the Bay Area have been observed in just the past decade. Hotter temperatures may prompt you to bolt for the nearest AC system to install when open windows and fans are no longer sufficient to keep your house comfortable in the summer.  While that provides relief from extreme high temperatures, you may face extremely high costs to run an AC system in the summer in addition to a furnace in the winter.

A climate-friendly solution for this is a heat pump, which acts both as a heating and cooling system and is far more efficient than a furnace and separate AC system. The condenser component of a larger heat pump heating, ventilation, and cooling (HVAC) system is installed outside your home[1]. In the winter, it pumps heat out of the surrounding air and into the house at a nice warm temperature, just like the one-way heat pump in your freezer pumps heat out of the icebox and into the much warmer kitchen.  In warmer months, it pulls heat out of indoor air and moves it outside to cool your home like an air conditioner. The condenser connects to an air handler (which can usually be located wherever the furnace used to be) or mini-split unit (mounted on the wall or in the ceiling) to circulate the air through your house.  Many small heat pumps called packaged heat pumps are installed completely, or mostly inside the house. Examples of these are ones used in windows, or in hotel walls.

Heat pump systems save you money on your annual heating and cooling bills, but is it cost-effective to swap from a furnace and AC system to one heat pump system? Our experts say that, long term, the swap can save you up to thousands of dollars.

1. Let’s break down the costs

Even without incentives provided by San Mateo County’s Peninsula Clean Energy, the switch from dual system heating and cooling to a heat pump system saves you money. If your gas furnace is old and you wanted to replace an existing AC unit or install one for the first time, it would cost around $12,500[2]  to replace both units with no tax incentives provided. Compare that to a heat pump system, which would cost you around $14,000 before subsidies.

Heat pumps are eligible for a 30% tax credit (capped at $2,000) now, plus a BayREN incentive of $1,000 plus; in 2024 they will be eligible for even more upfront incentives for low and middle income buyers.

Purchasing a heat pump in 2024, middle income homeowners can receive up to $7,000 in upfront rebates if you are making a household [3] income below $200,000[4]. Effectively, you are paying pennies on the dollar for a more sustainable system that also reduces the cost of your heating and cooling for years to come.

Low income homes will qualify for an additional $7,000 in upfront incentives.

Even with subsidies, these costs can feel steep for some homeowners. Consider applying for Peninsula Clean Energy’s $10,000 zero interest 10-year loan. Rather than pay separately, this loan can be tacked on to your monthly utility bill as an $84 cost per month. Clean energy loans are widely available and make the swap to heat pumps accessible for almost any home looking to go green.

2. Same home, better appliances, lower costs 

Try smaller scale solutions that plug into the wall, like the plug-in heat pump water heater—as easy to install as a washing machine. All you need for this is a cold-water connection, a hot water connection, and a power cord, and you're ready to get pumping.

The earlier that you make the swap, the better for your family and neighborhood. The replacement of a gas-fired furnace with an energy-efficient heat pump has the power to cut most  of your home emissions and your monthly energy bill from day one. You can start today. Even if you are not making the switch to a heat pump system, take a look at smaller scale sustainable switches like heat pump water heaters.

Eco-wise consumers recognize the beauty that heat pumps provide, pairing electric efficient heat pump systems while significantly reducing GHG emissions. By making the swap from gas furnaces,   98% of U.S. households would cut their carbon emissions by installing a heat pump today [3].

3. Keep your existing panel

Heat pumps require electricity and you may fear that you need to upgrade your electrical panel; however, most people don't need to upsize their panels in order to accommodate heat pumps. Heat pumps are extremely energy efficient and do not require as much electricity as you might think. Most homes are already equipped with adequate electric panels that can sustain heat pumps as they generally require the same amount of power as an air conditioner. Note that furnaces typically also require electricity for electronic ignition and to power the fans for forced air heating, and air conditioning requires electricity.  When you install a heat pump, you are replacing those electricity uses. For homes that already have an AC unit, the only switch that you need to make is the unit itself. However, if your home does not have an existing AC unit, the heat pump installer will also put in a new circuit to the outdoor compressor.

If your home has old wiring, don’t worry, the new heat pump can go on a new circuit that does not stress the old wiring. 

Conclusion

A heat pump is one of the most affordable and efficient ways that you can both cut costs on your heating and cooling bills, and significantly cut the pollution your home generates. Make the swap today with clean energy rebates, zero-interest loans, and tax credits. There is no need to tear your house apart by taking out the old and putting the new in—a majority of homes are already equipped to make the change. With this, hopefully you are feeling more than equipped to make the change today.

Contributors: Tom Kabat and Sean Armstrong

Sources

(1) https://statesummaries.ncics.org/chapter/ca/

(2) https://sanmateo.climate-fixes.org/HotWater/Emissions.html

(3) https://www.rewiringamerica.org/circuit-breakers-heat-pumps#6mark