Formerly, we heated our home with fossil gas as nearly 50% of American families still do.[1] After powering a conventional automobile, heating with gas for us was the second largest consumer of fossil fuels in our household. We converted our cars to electricity a decade ago and we haven’t looked back. If we were going to eliminate our consumption of fossil fuels further, we would have to tackle the elephant in the room: home heating.
As part of our campaign to “stop burning stuff” through electrification, we would need to convert our home heating from gas to electricity. Fortunately, that’s become much easier since the days of “all-electric homes” using inefficient resistance heating. Today there many different brands of heat pumps on the heating, ventilation, and air conditioning (HVAC) market that offer substantially better efficiencies than not just resistance heating but also the gas-fired furnaces they replace.
Here in this part of California most of us use “dual pack” systems on our rooftops. One part of the system is a gas-fired furnace. The other part is A/C or air conditioning. Since an air conditioning unit already uses a heat pump, modern heat pump HVAC units essentially run the system in reverse, taking heat from outside air and pumping it into the house, eliminating the need for a gas furnace.
Since heating and cooling is such a major household load, these dual pack units are a major and costly appliance. Because of that, heat pump HVAC systems were singled out in the Inflation Reduction Act (IRA) for substantial incentives of “up to” $8,000. This and state subsidies prompted us to take action.
Existing HVAC System
Our existing dual pack HVAC system was installed in 2011 for $6,400. Though it was 14 years old, it still had plenty of life remaining. But it wasn’t very efficient even by the standards of the day. Our American-made Trane had a SEER (Seasonal Energy Efficiency Rating) 14 rating on the A/C side. This was a mid-range model; maximum efficiency that year was 16.5 with a low of 10.6.
The gas-fired furnace had a 79.0 heating seasonal performance factor. This wasn’t much better than the 75.0 that was the least efficient unit that year. So our furnace was nearly the least efficient possible at the time it was installed. It only converted 81% of the gas burned to heat.
A modern heat pump would improve the efficiency on both the A/C and the heating side of the dual pack.
New HVAC System
While there are a lot of heat pump models on the HVAC market, our actual choice was limited. We wanted to participate not only in the federal IRA program, but also in California’s “Smart Energy Homes” program as well.
Nearly all the vendors we interviewed—and we interviewed many–proposed a Bosch 3 Ton HVAC Variable Speed (BRBA-36HWD1N1-M18) unit. Despite the German name, the 18 SEER heat pump was made in China.
Our quotes ranged from $11,000 to $20,000 with the average falling around $15,000. It pays to shop around and to negotiate the price you’re willing to pay–and remain flexible. Our preferred vendor ultimately refused to participate in the federal and state programs. So we had to go back to the drawing board and start a new round of vendor interviews.
The vendor we chose originally offered the Bosch unit at the high end of the range. We explained that we had better quotes so he called his boss on his cell phone and they began dickering with us on the spot. Eventually we agreed to a price of $14,000 and they would knock $4,000 off that if we qualified for the federal subsidy for families with a moderate income. We had already prequalified for the IRA program and the unit was eventually installed for $10,000 as contracted.
We will also qualify for $2,000 in federal tax credits at the end of the 2025 tax year for this expenditure.
Heat Pump Heating Costs
To estimate how much more electricity we’ll need to heat our home with the heat pump, we need to first extract how much gas we use for heating hot water. During the summer months (June, July, August, September) we don’t need home heating. Thus gas consumption during the summer is due entirely to heating hot water. From this, we estimate that hot water uses about 10 Therms of gas per month or about 1/3 of total gas consumption.
Since the gas furnace was only 81% efficient, we need less actual energy to heat our home than was consumed in the furnace. We estimate we need about 180 Therms to heat our home.
We can estimate how much electricity we’ll need by using either the Heating Seasonal Performance Factor of 8.1 for our heat pump or an approximate Coefficient of Performance of 3. Both approaches arrive at a similar conclusion. We’ll need from 2,000 kWh to 2,200 kWh to heat our home.
Heat Pump HVAC Savings
While we won’t know how much the new heat pump will save us on air conditioning costs for several years, we can make a reasonable estimate. Using an online tool “seerenergysavings.com” there are about 1,300 cooling hours per years in our climate.[2] By installing an 18 SEER system over a 14 SEER unit, we may save 25% in cooling costs or about $400 per year. At our current cost of electricity, ~$0.44/kWh, that translates to an electricity savings of nearly 900 kWh per year on the A/C side.
Overall, of course, we’ll use more electricity in total because we’ll use the heat pump to heat our house instead of a gas furnace. If the heat pump requires 2,200 kWh per year to heat our house, and we save 900 kWh from improved A/C performance, we should need ~1,500 kWh more electricity than we did before we installed the heat pump.
Heat Pump HVAC Costs in California
From our experience most Californian’s are overpaying for heat pump HVAC systems. Our pre-subsidy price of $14,000 is much less than the average cost of $19,000 for single-family homes with a similarly sized unit in the state’s Tech Clean program.[3]
IRA Income Qualification
The subsidies in the Inflation Reduction Act are administered by the states. In California the program is implemented by the California Energy Commission.
California residents with single family household incomes between 80% and 150% of “area median income” are eligible for up to $4,000. Californians with single family household incomes less than 80% “area median income” are eligible for a rebate up to $8,000.
You can find the “area median income” at FannieMae.com. For our area that’s $68,000. We provided copies of the summary page to our recent federal tax returns for the past three years to the CEC and qualified for the $4,000 rebate paid directly to our vendor. Each vendor must be “qualified” to participate in the CEC implementation of the IRA.
The CEC’s glacial implementation of the program for heat pump HVAC systems alone delayed our project almost two years. The CEC’s implementation of the remainder of the IRA program is still delayed and may never go into effect.
Duct Test
For the vendor to qualify for the rebate, the job must have a completed building permit. The building permit requires a duct test by an independent contractor. The “duct test” is a sophisticated series of measurements of inflow and outflow at each duct in the household to test for leakage.
We interviewed nearly a dozen HVAC contractors for this project. About half of them crawled through our attic to examine the duct work. Some included in their bids costs for repairing or replacing portions of the duct work in our 75-year old home.
The vendor we selected didn’t propose any duct work, so we were a little concerned that our new heat pump HVAC system wouldn’t pass inspection. But it did. We got a clean bill of health. The building permit was signed off by Kern County and our vendor received their payment from the CEC for the rebate they included in our bid.
The system worked. We met all the bureaucratic requirements of the program and now we have a modern heat pump HVAC system at a cost to us of $10,000.
Electrification Series
- Steps to Electrification: Dumping Fossil Fuels
- Electrification: Tracking Down a Mystery Outlet
- Electrification: Fossil Gas is Gone–PG&E Pulled the Meter
- Electrification: Induction Stove
- Electrification: Heat Pump Water Heater
- Electrification: Heat Pump Dryer
- Electrification: Heat Pump Home Heating
- Electrification: Is Complete–We No Longer Burn Stuff
[1] Fossil gas was formerly called “natural” gas to distinguish it from “town” gas that was created by burning coal in a reducing atmosphere. The “natural” in natural gas was used because the gas came from the earth. It was natural and not man made. However, with time the word “natural” has taken on new, expanded meanings to include healthy. Fossil gas if anything it isn’t “healthy,” and we haven’t manufactured “town” gas in a century or more. Thus, it’s more appropriate today to call gas mined from the earth as “fossil” gas because it is a fossil fuel like petroleum. Some 63 million households in the USA burn fossil gas to heat their homes.
[2] The closest city with a climate similar to Bakersfield in their database was Ontario, California.
[3] Through mid March 2025 there had been 350 heat pump HVAC systems installed in Kern County for an average project cost per residence of $19,000. Statewide there were 42,000 ducted heat pump HVAC systems installed since 2021 for an average project cost per residence of $19,000.
