Heat pumps are growing in popularity. In the past few years, a buzz has started around climate-friendly HVAC tech such as ducted heat pumps, mini-splits, or even geothermal systems. This is because heat pumps have the potential for mitigating the effects of climate change. State and local governments and utility companies have continually offered rebates and incentives for homeowners who install heat pumps. The support for heat pumps over traditional heating systems has extended all the way to the Department of Energy and Senate.
In addition to government incentives, installing a heat pump instead of a furnace or central air conditioner can help you save money on your utility bills. The total amount of money you will save by purchasing a heat pump will vary depending on the cost of natural gas in your area, number of windows in your home, climate, season, and type of insulation behind your walls.
Read on to see why you should install a heat pump in your California home.
What is a Heat Pump?
Heat pumps are essentially two-way air conditioners. In the summertime, they work like any other air conditioning unit, removing heat from the air inside and pushing cooled air back into the home. In the cooler months, they do the opposite by drawing heat energy from the air outside and moving it into your home to warm things up. The process is especially efficient, using half as much energy on average than other electric home-heating sources.
The biggest difference between heat pumps and traditional heating and cooling systems is that they are designed to be ultra-energy efficient. This is because heat pumps only move heat, instead of generating it by combusting a fuel source. The system requires an outdoor and an indoor unit (unless using the less common geothermal system), which work together to suck up hot air and introduce it to an inside space or expel it outside.
Electric heat pumps also emit less carbon than other heating and cooling options, all while providing two to five times more heating energy than the energy you put into it, on average. As a result, a heat pump is an environmentally friendly HVAC system that is also good for your budget. Most heat pumps also use inverter technology, which lets the compressor run at more nuanced and variable speeds, so you’re using only the exact amount of energy necessary to maintain comfort.
Heat pumps have actually been around for decades and are the primary HVAC system in more than 10 percent of homes in the U.S., though mostly in the warmest parts of the country, where the older heat pump designs can work effectively and efficiently.
How Do they Work?
Heat pumps work in two different ways to either heat or cool a home.
How They Warm Up a House
The outdoor unit takes in any heat available from the air, compresses it to make it hotter, and then cycles it through the tubes leading to the indoor unit, which then blows the hot air into the room. Many heat pumps can provide hot air in temperatures of less than -20°F. Even in freezing temperatures, there is still heat in the air, and with the help of the compression process, heat pumps can continue generating warm temperatures.
How They Cool Down a House
To cool down a home, the heat pump will suck in hot air from inside, send it to the outdoor unit, and blow it away. The compressor will then send refrigerated air to the evaporator coil of the indoor unit, cooling the temperature down inside.
5 Reasons to Install a Heat Pump in California
- Energy Efficient
Electric heat pump systems are becoming increasingly popular because they do not rely on fossil fuels to produce warm and cold air. A benefit of investing in an air-source heat pump is that you will utilize less electricity or natural gas when compared to other types of systems. Purchasing a heat pump will help reduce the amount of greenhouse gasses that are released into the environment each year. Compared to combustion-based systems, heat pumps are less expensive to run. On average, they could cut back your heating/cooling bill by 20 to 70%–not bad, huh?
The most common types (air-source heat pumps) will trim your household carbon dioxide emissions by about 40 percent compared to gas furnaces. The exact amount depends on how your electricity (which powers a heat pump) is generated.
- Save Money
Heat pumps are the most affordable way to heat and cool a home. Homes that heat with propane, oil, or “regular” electric-resistance systems are the most likely to save money by installing a heat pump. Propane and oil are always expensive. So in many parts of the country, you could save more than $1,000 per year on your heating bills by switching to a heat pump.
Most of the time, though, gas heating will cost less than a heat pump, particularly in colder climates. Installing both a basic gas furnace and basic central AC is usually cheaper than installing one whole-house cold-climate heat pump.
- Federal Tax Credits and State Rebates
The Inflation Reduction Act is packed with provisions to incentivize homeowners to make energy-efficiency upgrades to their home, including installing high-efficiency heating, cooling, and water-heating equipment such as fuel-conserving furnaces, boilers, and wood stoves.
But the largest credits and rebates are available for heat pumps, a high-efficiency system that heats and cools your home in place of a furnace (or boiler) and an air conditioner. When coupled with cleaner electricity sources, a heat pump can be a sustainable way to control the temperature indoors. And while older heat pumps struggled in cold climates, many of the latest models can even work well in frigid winter temperatures.
Our reporting has found that heat pumps can be more cost-effective than other heating systems over the long term. And in some parts of the country, they already cost less to install than other kinds of HVAC systems.
However, the initial purchase price of a heat pump can remain high in some areas, especially in cold climates. In a June 2022 nationally representative CR survey (PDF) of 2,103 U.S. adults, 21 percent of people who expressed they would not or might not be interested in using a heat pump in their home in the future said one reason is that “they seem expensive to buy/install.”
These new incentives could make heat pump installations much more affordable. “Consumers can seriously consider a heat pump now if they’re on a limited budget,” says Shanika Whitehurst, CR’s associate director of product sustainability, research, and testing.
- Added Comfort
Traditional heating systems (and basic air conditioners) actually are not great at holding steady temperatures in your home. Furnaces tend to click on, make the room hot, then turn off and get cold. This could result in big temperature swings.
Modern heat pumps, by contrast, are much better at maintaining the same temperature and humidity in your home. They operate continuously at some fixed low level, so they do not fluctuate like a furnace.
- Heating and Cooling Combined
Keeping your home temperate usually requires separate units for heating and cooling or an HVAC system. However, heat pumps offer another way to keep your home cool in the summer and warm in the winter. Heat pumps are a two-in-one system that can heat and cool a home.
When summer rolls in, you can switch your heat pump into its cooling mode and enjoy.
- Long Lifespans
Annual maintenance is a good way to keep your appliances working for as long as they can. The average life expectancy of a heat pump is right around 15 years. But, that does not mean that your heat pump cannot last 20 years or more. It also doesn’t mean that it will last for 15 years either. There are numerous factors that determine the lifespan of a heat pump, so to give you a better understanding of these, let’s break them down in detail next.
- No Fuel Storage Needed
Although a gas furnace is designed to provide heat at a faster rate than electric appliances, this type of furnace is vulnerable to toxic gas leaks that can cause fires or explosions. On the other hand, investing in a heat pump that runs on electricity will help protect your family from carbon monoxide poisoning and other health issues.
Most commercial heating and cooling systems use different types of physical fuel, such as oil and propane. This means you will always need to have fuel on hand, especially in case of an emergency. Heat pump owners do not have to worry about how much fuel they have. Heat pumps only use electricity, and they can operate as long as they have power. In a worst-case scenario, heat pumps can be fueled by a generator.
- Easy Installation
Heat pumps are very flexible and customizable. If you already have ductwork, a heat pump can hook right up to existing forced-air systems, which can help keep installation costs down. If you already have central AC, it is even easier. Installing a heat pump is essentially no different than installing a central AC, so you will already have the right electrical connections and runs for the wiring and refrigerant lines. Ductless heat pumps, also known as mini-splits, can be pretty easy to set up, too. These do not require existing ductwork.
Tax Credits and Rebates for Families
When homes need to replace their heating or cooling systems, families can get tax credits for efficient heat pumps that ensure comfortable home temperatures. By doing the job of both a furnace and air conditioner, heat pumps work to keep homes warm in the winter and cool in the summer.
Right now, households can receive a $300 tax credit for purchasing a heat pump. The total of current and previous year’s credits, including those for energy efficiency improvements, high efficiency furnace and air conditioners cannot exceed $500.
Starting next year, households will be able to claim a tax credit for 30% of the costs of buying and installing a heat pump, up to $2,000 including support for any electric system upgrades needed to make the home heat-pump-ready.
Beginning in 2023 state programs will offer low- and moderate-income households rebates for heat pumps at the point-of-sale, cutting costs of purchase and installation up to $8,000. If home electrical upgrades are needed to integrate new heat pumps, rebates of up to $4,000 will also be available to households.
Heat Pump Installation Tax Credits
You can also claim up to $1,200 in total tax credits per year on a wide range of expenditures related to certain efficiency upgrades, including for heat pumps. These include but are not limited to:
- $600 for air-sealing materials or systems, which can improve your home’s overall energy efficiency
- $150 for a home energy audit, which can point out ways you can improve your overall energy efficiency
- $600 for upgrading your electrical supply if it’s required for efficiency projects—for example, in order to power an electric heat pump when you previously used natural gas to heat your home
State-administered rebates on efficiency and electrification upgrades associated with installing your heat pump may also be available for low- and moderate-income households. Parameters of who qualifies and for how much would be decided by the state according to your household income measured against your state’s median household income. This includes:
- $1,600 for insulation, air sealing, and ventilation
- $4,000 for upgrades to your electrical panel and service
- $2,500 for electrical wiring
Who Qualifies for a Heat Pump Tax Credit or Rebate
Any taxpayer would qualify for the federal tax credits.
For the tax credit program, the new incentives will apply to equipment installed on January 1, 2023 or later. (A smaller tax credit of up to $300 for a heat pump meeting the CEE’s top tier of efficiency is available for heat pumps installed during 2022.)
As for the rebate programs, Urbanek says it would be “surprising” if they turn out to apply retroactively. The rebates depend on income. Specifically:
- If your household income is less than 80 percent of your state’s median household income, you are eligible for 100 percent of the rebates available. So if you spend $10,000 on a heat pump and a heat pump water heater, you could get $9,750 back, depending on the specifics of your state’s rebate program.
- If your household income is 80 percent to 150 percent of your state’s median income, you are eligible for 50 percent of the rebates available. So for a $10,000 heat pump and heat pump water heater, you could get $4,875 back, depending on specifics.
- If your household income is more than 150 percent of your state’s median income, you are not eligible for these rebates.
Give Us a Call
At Aire-Tech, we can help keep your home at the optimal temperature! We give you countless resources to help you explore and learn about HVAC options, including incentive programs. We work closely with agencies to pass on savings programs and information to our valued customers.
If your system needs repair or inspection, call Aire-Tech on 951-926-1002. You can also visit our Contact page and complete the contact form.