Scaling Heat Pump Retrofits in Housing with Cost Barriers
March 18, 2025
New Quick Start Grant Report
Green financing can play a huge role in helping California reach its goal of driving heat pumps and heat pump water heater adoption. However, securing funds from lenders often requires thorough data analysis to show greenhouse gas and energy reductions from experimental projects. Because retrofitting existing buildings involves unique, site-specific challenges, investors cannot always confidently predict returns and, as a result, avoid these investments. Many retrofit projects benefit low-income residents or disadvantaged communities, meaning that the communities most in need of energy upgrades are underserved by traditional green financing. Climate Resolve and USGBC California (USGBC-CA) saw an opportunity to change that with the help of our Quick Start Grant program.
To solve for the gap in data, Climate Resolve and USGBC-CA used their Quick Start Grant to calculate the greenhouse gas reductions in affordable housing retrofits. Through quantitative assessments, heat pump HVAC installations, and interviews with key stakeholders, the team established measurement and verification processes that meet most green lenders' requirements.
The project team focused on Wilmington and San Pedro Harbor communities in Los Angeles due to their environmental and socioeconomical challenges. After engaging with the community and educating residents about the cost- and energy-saving benefits of heat pumps, the team installed 14 unitary heat pump water heaters and seven heat pump HVAC mini split systems, which mitigated around 164.5 metric tons of CO2e. Beyond installing these systems, this project helped enhance market confidence around investing in affordable housing.
This research showed that single family homes are easier to engage with and that financial incentives are key to spurring retrofit projects in affordable housing communities. In addition, it’s evident that there’s a significant opportunity to scale this greenhouse gas analysis to larger multifamily building retrofit projects for an even greater return on investment.
Read the full report for a more in-depth look at the challenges and solutions to expanding green lending for heat pump technology.
The TECH Clean California initiative is funded by California ratepayers and taxpayers and administered by Southern California Edison Company under the auspices of the California Public Utilities Commission. The TECH Clean California team is led by Energy Solutions and partners with Anchor Blue Consulting, Ardenna Energy, Association of Energy Affordability, Building Decarbonization Coalition, Central Coast Energy Services, Inc., Electrify My Home, Frontier Energy, National Comfort Institute, Energy Outlet, Recurve Analytics, The Ortiz Group, Tre’ Laine Associates, and VEIC.
