Encouraging Heat Pump Technology for Lower-Income Californians

Interest in heat pump technology is growing throughout California, but its benefits could be most transformational for California’s rural residents, especially those who are low-income and living in more extreme climates. In southern California and the San Joaquin Valley, wildfires and record temperatures have left many of these households even more vulnerable.

TECH Clean California, a statewide initiative to accelerate the adoption of clean space and water heating technology and put California on a path to carbon-free homes by 2045, has spent the last year developing strategies for getting heat pump installations into lower-income homes. TECH Clean California has committed to dedicating 40 percent of its funds to equity customers. Eligible residents include those in language isolated communities, low-income communities, rural regions, tribal areas, historic redlined neighborhoods, and other disadvantaged areas.

Its first step has been identifying how best to leverage the regional programs that already are available in these communities.

There are several utility and state low-income energy programs that currently provide energy efficiency retrofits to rural and low-income customers. Programs like the Energy Savings Assistance program and the Low-Income Weatherization Farmworker program are designed to help low-income homes with needed appliances.

Many of these programs, however, do not or cannot fund fuel substitution from gas equipment to heat pumps. The funding includes a number of limitations on how it can be spent that limit the budget for and type of home repairs that can be reimbursed through the program.

“For example, if I'm a low-income resident in Southern California Edison's service area, I can get my HVAC system potentially replaced,” said Sandy Laube, one of the designers of TECH Clean California’s equity program. “But I can't get attic insulation because the permit for attic insulation increases the cost, so that it no longer meets the cost effectiveness metric.”

These kinds of geographic and type-of-work limits have created a barrier to enabling low-income Californian homeowners to participate in these programs, according to community benefit organizations that have worked alongside the communities in the past.

“They are worried about next week's bills, about how to pay this month's rent, and about going to get a decent set of clothes for their children,” said Richard Esteves, the chair of Quality Conservation Services, a residential contracting firm that provides energy saving assistance services to low-income customers. “For them to make think about making an investment of $6,000 to $8,000 on their own, it's just not feasible, and they have no credit to do that.”

To address this, TECH Clean California started by focusing on collaborating with existing low-income programs to supplement the work they can do to make heat pump installations possible. From a practical standpoint, the types of needed improvements include ensuring sufficient electrical panel space, ventilation issues, and the structural integrity under or around the equipment – all of which adds to the cost.

To explore how best to support these programs, TECH Clean California has created pilot projects that provide funding to cover any additional maintenance gaps, ensuring heat pump installations can take place in dozens of customer home in southern California and the San Joaquin Valley.

For example, in Southern California Edison’s service area in southern California (which covers much of southeastern California, including San Bernadino, Ventura and Los Angeles), TECH Clean California has provided additional funding for repairs at no cost to low-income residents, installing heat pumps across 254 homes. (Other projects have supported the installation of an additional 192 heat pumps in households around the state.) The houses that participated in this portion of TECH Clean California’s Low-Income Heat Pump Adoption Pilot had homes lacking the necessary wiring and maintenance to support heat pumps.

The pilot program was wildly successful, more than doubling the number of heat pumps that were installed from what had initially been planned.

“I have seen the TECH Clean California program personally help our low-income families time and time again,” wrote Krystin Richter, a regional manager for Greencat, an energy and building services contractor that frequently partners with Energy Savings Assistance programs. “It makes our job unbelievably easy because our customers are so humbled and thankful.”

For many of these homes, starting the conversation on how heat pumps can make air cooling and heating more efficient ends up giving these same homes a broader vision of the benefits of electrification.

HVAC systems provide an excellent introduction to the benefits of electrification for those new to these kinds of appliances, Esteves explained. It opens the door to encouraging residents to consider heat pump water heaters and other appliances.

“People just want hot water,” Esteves said. “Once we can get them over the hump, saying, ‘hey, this is not your grandfather's electric water heater, it’s a whole different system – they start really appreciating all the benefits.”

For low-income customers, the benefits of the heat pump technology are both its 400 percent increased efficiency (which can lead to savings, depending on several factors) and the increased indoor comfort it provides.

Both benefits come from its unique technology: Heat pumps use electricity to transfer heat using a refrigeration cycle, rather than using direct combustion or electric resistance. For HVAC systems, they require significantly less energy than a traditional gas furnace. Installing a heat pump HVAC system also removes the related nitrogen oxide, carbon monoxide, and methane emissions that gas furnaces produce, making it a much healthier option, which program recipients say that they appreciate.

The efficiency also generates power savings, especially for the heat pump HVAC systems, which is good for reducing the overall climate impact. For customers with high bills from air conditioning expenses, the increased efficiency of HVACs can generate significant savings.

And both HVACs and water heater systems bring quality-of-life improvements.

"Our old water heater was on the verge of falling apart, and we definitely wouldn't have been able to afford it on our own,” said customer Nala H. “Thank you for coming to the rescue, and not only replacing it, but getting us a brand new, eco-friendly one. We’re glad to be living in a state that has programs like these."

By: Emily Pickrell