The Perfect Solution, and Why it is Not Working

A heat pump unit being inspected by a home performance contractor

Recently, California has made great progress in setting and charting a course toward ambitious energy and climate goals. There is, however, one huge regulatory and political roadblock that’s creating a barrier to achieving greater savings by blocking one of our most promising technologies: heat pumps.

Why Heat Pumps are Good for California

Heat pumps are devices that transfers heat to the air (air source heat pumps) or the ground (ground source heat pumps or geothermal). In residential use the most common applications of heat pump technology has been in heating and cooling systems. The focus of this discussion is on air source heat pumps.

In California, because of our mild climate and summer cooling requirements, heat pump technology is a proven and ideal solution to achieving energy savings. (This humble home appliance could be San Francisco’s secret climate weapon.) Leaders in the residential energy efficiency sector have embraced heat pump technology as the “go to” solution for heating, cooling, and domestic hot water production. (The Shocking Truth About Heat Pumps.) Combined with site-produced electricity from solar panels, heat pumps are paving the road to Zero Net Energy. We should all embrace this technology and encourage its adoption as fast as we can.

By comparison, gas furnaces do a good job but they have limitations. Some of the best performing gas furnaces are rated as high as 97 or 98 percent efficient. Physics limits further gains, as the combustion process is never 100 percent efficient.

Gas furnaces rely on burning fossil fuels, typically natural gas or propane, neither of which are a long term solution from a carbon footprint perspective. By contrast, heat pumps rely on electricity and refrigerants instead of combustion, and have long been achieving over 100 percent efficiency. In fact, properly designed and installed heat pumps routinely achieve over 300 percent efficiency. This extreme performance has been verified on installed systems in real homes, not in a lab environment with perfect conditions.

Heat pumps are not some mystery technology: they have been around for years. In fact, the concept was first proposed by Lord Kelvin in 1852 and the first working system was created in 1855 by Peter von Rittinger. (The History of Heat Pumps)

In the 1970s use of heat pumps grew due to the oil embargo and the high cost of petroleum based fuels. Unfortunately, many systems installed in this period did not perform very well. This was not a problem with the technology, but with the industry. Heat pumps are not as forgiving as gas furnaces; correct sizing and ductwork are critical to optimal performance. HVAC contractors did not fully understand the technology; many still don’t.

Another myth is that heat pumps only work in mild climates. This thinking stems from the fact that heat pump performance falls off as the ambient air temperature drops. An old rule of thumb was that heat pumps are great as long as the outside temperature is above 30 degrees Fahrenheit. In some cases this is true, but heat pumps have been used in extreme climates (like Alaska) for years. Today’s heat pumps easily perform well into the teens, and special low temperature units will work well to -15 degrees below zero and lower without electric resistance heat strips.

Today, heat pumps are being used in a wide variety of residential applications. They can be used to heat and cool the home in central heating systems. They are used to condition small spaces in the form of ductless mini-split heat pumps. A more recent application is the heating of domestic hot water. Heat pumps can even be used to heat swimming pools.

Since heat pumps are electric, they are a perfect fit for solar applications. By installing heat pumps, we can use the sun’s energy to heat and cool our home and make domestic hot water. This is a very effective carbon free model that does not rely on fossil fuels.

In fact, many experts believe the future for residential energy is site-produced electricity from photovoltaics (PV solar), combined with heat pump technology, and storage (batteries). This is a carbon free, long-term solution for residential energy. It has worked for NASA and the space program for years it should work for your home too. In short, there are lots of smart folks who support this technology and see it as a critical part of a sustainable clean energy future.

Political and Regulatory Roadblocks to Heat Pumps

The case for heat pump technology is strong, and we should be encouraging their use in a variety of applications. So what’s the catch? Answer: policy and politics. There are regulatory and political restrictions in California are limiting the adoption of this proven technology.

Restrictions against “fuel switching” (which usually involves moving from natural gas to electricity for heating) has been used to prevent widespread adoption of heat pumps. Politically, this is probably because gas-only utilities don’t want to give up customers to an electrical provider. In some cases policies even penalize those who embrace the technology.

Here are a Couple of Real World Examples:

  1. A contractor upgrades a small home that was heated with an 80 percent efficient natural gas wall furnace. The contractor air seals the home, adds insulation, installs a mini-split heat pump, and adds a small PV system. The homeowner is ecstatic: she has increased her comfort considerably, reduced her operational costs, and reduced her carbon footprint substantially. We should reward and encourage this type of upgrade as it is embracing the future, right? All is well until the contractor submits for the state-sponsored rebates he promised his customer. It seems he missed the detail about fuel switching, and as a result the rebates are much less than he anticipated. The client is disappointed, he is disillusioned and in the end the homeowner is being penalized for doing the right thing. This is a true story.
  2. Even worse is the story of some homeowners who are being excluded completely from participating in the state-sponsored rebate program because their project includes fuel switching to a heat pump, never mind all other related upgrades such as air sealing, insulation improvements, windows, etc. Local contractors challenged this, and the utility responded with a battery of documents from their attorneys citing how they interpret the program requirements. It seems if you switch fuels, (even to a more efficient solution) other improvements don’t count. Again, a true story.

In the first example above, the customer was in a territory where the utility provided gas and electricity, therefore they were not completely opposed to fuel switching. It was more of a paperwork concern for them than a financial one. In the second example, the utility only provides natural gas. This might explain why their attorneys interpret the rules differently and are actively discouraging moving to heat-pumps. It seems that keeping customers and revenue takes priority over saving energy.

All of this is antiquated thinking and nonsense. If we are to meet the state’s goals and move to a sustainable future, we cannot let outdated and cumbersome legislation and antiquated utility politics dictate business models. This issue is no secret to the California Public Utilities Commission or the California Energy Commission. Both of these regulatory agencies are aware of the problem and yet neither are willing to take a stand and find a solution. From a policy standpoint fuel switching has become somewhat of a taboo subject, the 800lb. gorilla, the elephant in the room, the scarlet letter, whatever metaphor you want to use. The utilities all have their own concerns; after all how could they promote something that might lead to them losing a client? This issue is not limited to California, but concerns communities across the nation.

When it comes to fuel switching, California lawmakers and utilities are delivering mixed messages. On one hand they are looking for ways to get more contractors involved in the industry with greater savings per job. Yet at the same time they are restricting business models and penalizing those who are charting a course to a sustainable clean energy future. The CPUC and CEC acknowledge that fuel switching is a problem. They are aware there will be winners and losers when the regulations change. There is no question the utilities don’t want to loose customers, especially on the natural gas side of the equation.

The real question is, when will the policymakers have the courage to take a stance for clean energy over the politics and profits? What is it going to take to bring this conversation off the back burner and into the spotlight? Who will stand up and address the fact that this is a real barrier to achieving our goals? There is no question this will be a challenging conversation as there is a lot at stake. But if the policymakers continue to allow the utilities to play by their own rules, in the name of shareholders, our industry will suffer and we will never meet our state’s ambitious energy saving goals.

We can only hope that collectively we can keep the pressure on and force policymakers to finally bring this issue to forefront of the conversation. We need to support switching from fossil fuels to site generated or sustainably produced electricity. Our policymakers need to embrace new solutions and look forward. This is not a time to play favorites and grant the utilities special favors. Sacramento needs to step aside and let the market decide how we create our clean energy future. Policymakers need to support growth by removing the barriers of outdated and politically motivated regulations.

This journey is hard enough as it is. We need support and action from our policymakers to pave the way. It will not be easy, and unfortunately there will be winners and losers. Let’s just hope that this time, the winners are the public and the planet.

Charles Cormany
Executive Director
Efficiency First California

Read Charley's other blog posts >>

Image from iStock.


Fuel switching restrictions Lost opportunities in MF upgrades

Low income housing providers are missing opportunities to get rid of gas wall furnaces and gas water heaters in their renovations. This is because of utility company restrictions in fuel switching. In the last two years I have seen hundreds of apartment units where PTHPs could have been installed, but gas wall furnaces remain. Gas water heaters too. These properties won't be renovated again for another 20 - 25 years.
Part of the utility providers' concern is that if customers give up gas, then those customers that remain on gas will have to pay more of the cost of infrastructure maintenance. This concern is legitimate and must be addressed as we transition away from fossil fuel.

Thanks for your feedback

This is a great example of outdate regulations getting in the way of a proven solution. If you have any other examples we would love to hear about them.

Solar Heat Pump for Zero Carbon Buildings

We get calls from California to supply our Solar-assisted Heat Pump in new construction, but the CEC has high barriers to entry. Innovative products are not easy or cheap to add to their CA State Title-20 list. A SunPump would help a home reach Zero Energy Ready performance without any increase in cost and solve for space heating and hot water with zero carbon added. The need is huge, but the CEC challenge is enormous.

Thanks for your comments

This is not the first time we have seen challenges trying to get new technology approved for Title 24 and the CEC. CA legislation often trails new technology. It would be nice is there was some form of a fast track for new technology. We encourage you to be persistent.

Damn straight

It's time to remove all restrictions on electrification. Who's with me? Let's get our state congressmen to do something about this!

We support the move toward

We support the move toward electrification and are working with other interested parties to help remove restrictive regulations. It's a slow push and tough battle but we believe this is the path to the future. Thanks for your comments.

Efficiency of Geo Heat Pumps vs Air Source Heat Pumps

This article is spot on. Bravo. Heat pumps and solar is the only viable way to achieve "carbon free, net zero energy". However, I would like to point out that all heat pumps are not equally efficient. An industry sponsored evaluation of Geo Heat Pumps (GHPs) vs Air Source Heat Pumps (ASHPs), testing them for a total of three years in real world conditions demonstrated that GHPs use 47% LESS electricity than ASHPs, on an annualized basis. (websearch; ASHRAE VRF vs GEOTHERMAL study). So, simple math will prove that for an ASHP to achieve true net zero, the solar array must be twice the size (and twice the cost, and twice the roof space) over what a GHP would require to achieve the same goal; "carbon free, net zero energy". GHPs have other advantages over ASHPs, as well; longevity (24 vs 15 years average life per US DOE), lower maintenance, less refrigerant usage, less noise, and so on. I urge all the readers to investigate a GHP for their application and once all of these factors are considered, over the 20 to 25 year life of the solar array, a GHP is actually the better, and even less costly, alternative.

A role for GSHP in California's mild climate

On individual homes in CA's mild climates with good solar economics the low cost answer may be ASHP and a few more PV panels. The intriguing role for in CA for GSHP may be neighborhood scale projects of thermal sharing grids between exothermic commercial buildings and the surrounding endothermic homes that want space heating and year round water heating from the reject heat of the commercial buildings. Low cost horizontal bored uninsulated GSHP loops (perhaps installed by gas distribution system workers and equipment transitioning to become thermal services utilities) could simultaneously share and store that heat and coolth.

Bruce Thanks for your

Thanks for your feedback and information. Your cost comparison is intriguing as most look at the initial upfront cost of ground source heat pumps without considering the potential advantages. Good information.

VRF ASHP reality vs GSHP performance

Great article. However I would like to point out that even the newer air source heat pump (ASHP) makers claiming they can extract heat from air temperatures as low 15F below zero is not totally correct. These ASHPs are typically multi-zone variable refrigerant flow (VRF) units tied to a single condenser, where it is assumed at least one or more zone units have some cooling load to share with those heating. When all zone units are heating, some type of backup heat is necessary, such as placing the condenser unit in a "warm" space, or, the heat is being generated by the compressor only (it's all in the fine print of the IOM manuals of these products). If the latter situation occurs, the coefficient of performance (COP) is now less than 1.0 due to motor efficiency losses. In other words electric strip resistance heat is more efficient when heat cannot be reclaimed from other zone units on the same VRF unit or outside air is cold enough to limit heat extraction. A ground source heat pump does not have this problem since 1) extracting/rejecting heat from water is much more efficient due to density of the energy transfer medium (water) and 2) a closed loop ground heat exchanger is working with a much more constant medium (the earth) to ultimately extract or reject heat. For heating most GSHP products are rated to work with a supply water temperature as low as 20F and still produce a leaving air temperature of 100F or greater with a COP of 2.5 or better. As most designers configure a ground loop to supply at least 30F to 35F in heating, actual COP ranges are 3.5 and higher. In cooling a GSHP benefits the same way, in that a much greater amount of heat can be rejected into denser water in the ground loop and dissipated in the greater density mass of the host geology. In all cases compressor amperage draw is dramatically reduced with a closed ground loop system regardless if in the cooling or heating mode; ie, a nominal 5 ton compressor heat pump that might draw 50+ amps in an ASHP with an outdoor air temperature of 100F+ might draw only 30 amps in a GSHP. The lower average amp draw not only reduces overall annual power consumption but enhances the compatibility with solar PV power sources. The other benefit of GSHP products is the external condenser unit is completely eliminated, and if a package unit is used all line sets are also gone. As noted by Bruce Sanguinetti there are other advantages such as greater lifespan, no external noise, less maintenance, etc. If the state of California could reformat many of their energy efficient objectives and regulations to recognize the benefits of GSHP systems, and streamline the hodgepodge of local, county and state restrictions/requirements for ground loop installations to one common workable code based on input from experienced people in the industry, GSHP installation costs could be more manageable and acceptable to consumers. A clearinghouse of competent experience to facilitate these changes to benefit consumers in California is readily available too - the California Geothermal Heat Pump Association (

Thanks for the information

There is no doubt of the effectiveness of ground source heat pumps. Most of my personal experience and training has focused on air source heat pumps. Thanks for sharing information and pointing out the performance advantages of GSHPs. Either solution is a better option than fossil fuel burning furnaces.


Where an ASHP makes the most economic sense over any HVAC system is when you reduce heating and cooling loads through building design, Super insulation, and Air sealing to the point that you don't need a 5 ton HVAC system anymore. Not even a 3 ton. With a properly built or upgraded house a small ASHP can handle the occasional needs for home comfort. Best of all, home design, super-insulation, and air sealing need almost no maintenance and last the lifetime of the home. As with solar PV, Reduce First, then correctly size HVAC, to a smaller, cheaper, more efficient system.

Thanks mystery person. It's

Thanks mystery person.
It's true that we should really start thinking about how to condition "low load homes". As we build better houses the space conditioning requirements will be much less - great point.

the products aren't available, the HVAC contractors don't know

The best air-source heat pumps aren't sold in California, and most HVAC contractors don't know about them. The savings aren't as great here as in Canada or the East Coast, but you would think wealthy Californian environmentalists who don't want to burn any carbon represent a market worth addressing.

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