Advocates want new building codes to include a heat-pump provision that could benefit consumers and the climate. But regulators have cooled on the proposal.
28 May 2024
California has a unique opportunity to implement rules that could supercharge heat-pump adoption in the state, according to climate advocates. But regulators are waffling over whether to take it.
The California Energy Commission (CEC) is in the midst of updating the state’s building energy efficiency standards — a set of rules to reduce energy use and greenhouse gas emissions associated with new and existing buildings while also lowering energy bills for Californians.
Commissioners renew the standards, also called the energy code, once every three years. This current process should wrap up in August, and the new code will take effect in 2026.
Advocates are calling for the addition of a provision that strongly encourages — but doesn’t require — homeowners to replace their aging or broken central air conditioners with electric heat pumps. The climate-friendly appliances can both warm and cool buildings by pulling heat from outside to indoors or vice versa.
The proposed rules specify that the heat pumps installed be sized to cover the home’s heating as well as cooling needs, laying the groundwork for homeowners to ditch fossil fuels when their gas furnaces conk out.
Notably, the energy code can’t mandate heat pumps, but it can set performance standards that make them the most attractive option, said Matt Vespa, senior attorney at Earthjustice. Homeowners could choose to install a one-way AC, but they’d likely need to also complete additional work sealing and insulating their ducts to meet specific efficiency standards.
The CEC originally included the heat-pump proposal in a draft released last November. But after further consideration, commissioners struck it from the most recent version, made public in March. On May 8, advocates urged the CEC at a general meeting to bring the provision back.
Replacing ACs with heat pumps “is a real no-regrets strategy” for both the climate and consumers, Vespa said. Earthjustice is a member of the coalition that originally proposed the rule last spring and which includes other national nonprofits such as the Building Decarbonization Coalition, Natural Resources Defense Council, Rewiring America, and the Sierra Club.
Aspen, Colorado, adopted an AC-to-heat-pump measure in 2023, noted Ted Tiffany, senior technical lead at the Building Decarbonization Coalition. If California were to follow suit, it would be the first statewide application of the strategy in the nation, he said.
The current draft of the building energy code already goes a long way in promoting electrification: It encourages installing heat-pump HVAC systems and heat-pump water heaters in new buildings, and replacing broken air conditioners with packaged heat pumps on commercial rooftops.
These rules will help California get closer to its target of 6 million heat pumps installed by 2030, according to the CEC. As of October, the state had achieved about 1.5 million heat pumps across 800,000 homes. The commission estimates that if 100,000 single-family homes are built per year for the next five years, the draft code will spur 1 million to 1.5 million heat-pump installations. (These systems often comprise more than one heat pump unit.)
But the ditched provision to replace residential ACs with heat pumps could do a lot more to close the gap, according to supporters. The coalition estimates that 500,000 ACs are replaced in California each year. In its 2023 proposal, the group calculated that 35 percent of the state’s AC units, or 1.9 million, were more than 14 years old and due for replacement.
Including the AC-specific proposal in the state energy code now would also help Californians get ahead of coming zero-emissions appliance standards, Vespa said. Starting in 2030, the state will effectively ban the sale of gas furnaces. Between now and then, residents who replace their AC with another AC, and then see their furnaces snuff it in 2030 or soon afterward, would end up needing to shell out for a new heat pump anyway, he said. “That’s the last thing you want.”
Replacing an AC with a heat pump instead of another AC has a modest premium, Vespa said: about $900 to $1,900 based on an NRDC analysis and a survey of contractors in the TECH Clean California program. That’s out of a median installation cost of $15,900, according to TECH program data from July 2021 to April 2024.
Federal incentives from the 2022 Inflation Reduction Act, including a 30 percent tax credit of up to $2,000 for qualifying heat pumps, could cover the extra expense. What’s more, residents who get heat pumps won’t have to invest in a future furnace replacement, Vespa said.
While the CEC initially supported the provision in the code for its ability to reduce carbon pollution, public comments and further analysis caused the commission to step back. The proposal may still be too expensive for consumers because of operating costs, according to CEC commissioner J. Andrew McAllister.
In a March 28 webinar, McAllister pointed to the increasing rates in the state for both fossil gas and electricity. Since the proposed rules would encourage the switch from gas to electric heating, consumers whose ACs fail would not only be asked to pay a “little more upfront” for a heat pump instead of an AC-only replacement but would also potentially see increased energy bills for the next five to 10 years “while the rate environment…equilibrates,” he said. “We believe it will, but…even if [switching to a heat pump is] cost-effective over the lifetime, that near-term timeframe is problematic.”
Rather than enshrine the provision in the state energy code, the CEC is considering adding it to the voluntary California Green Building Standards Code, which would mean local governments could implement the rule “where it is clearly cost-effective in that jurisdiction,” McAllister said. Some candidates he named were Glendale, Los Angeles, and Sacramento. Commissioners may also revisit the proposed rule in the next code revision cycle three years from now, he added.
Supporters say the CEC doesn’t need to delay though. Replacing an AC with a heat pump still leaves existing furnaces intact, giving homeowners the flexibility to choose their heating fuel: gas or electric.
Having an electric heating option would insulate them from gas price spikes and rate increases, which experts expect as demand declines and fewer customers are left to bear the costs of the gas system, Vespa said. “The beauty of this approach is no one’s taking anything away from you.”