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Forward-looking contractors working with heat pump technology say their skills in installing them are rapidly paying off.

“The last quarter of 2023 was our highest grossing month, because of the 100 heat pump water heaters we installed,” said Chris Flores, the owner of Water Heater Warehouse in Fullerton, California. “With everything going electric, heat pump water heaters are becoming the new Teslas, they will be everywhere soon. The best thing we can do for the company’s growth is to work on all the heat pump water heaters we can get.”

Giving contractors the necessary tools is at the heart of an innovative state initiative, TECH Clean California. The State of California is targeting the installation of 6 million heat pump systems in homes across California, as part of a push towards clean energy and overall carbon emissions reductions.

Contractors drive an estimated 85 percent of the decision making on these products and having a contractor workforce that sees their benefits is essential. Recognizing their importance in customer decision-making, the program focuses on the need for skilled contractors, well versed in what heat pump technology offers. To do so, TECH Clean California has combined educational training and incentives to make sure they are well-prepared for the new technology.

TECH Clean California provides a broad range of courses focused on the technical side of HVAC equipment. It has partnered with the National Comfort Institute (NCI) to do so. NCI offers courses that provide contractors with the necessary knowledge, not only to properly install equipment, but to accurately be able to assess and select the right equipment for a particular home.

Because the technology is fundamentally different from a gas furnace, there are new considerations, explained Ben Lipscomb, who oversees contractor HVAC training programs at the National Comfort Institute.

“What a heat pump does is it moves heat from outside to inside, and it can also operate in reverse as an air conditioner and move heat from inside to outside,” Lipscomb said. “For that heat transfer to take place, those indoor and outdoor air flows have to be within a certain range, or things start not working right, and that can cause like issues with the equipment breaking down, or just the air being delivered, not being at the right temperature.”

For Tom Walsh, a contractor and owner of DaVinci Mechanical, TECH Clean California’s educational courses have made a dramatic difference in the quality of the job he can offer.

“I try to distinguish myself from the other contractors by taking these classes,” Walsh said. “They are fantastic, talking about how to do proper duct design and how to explain the heat pump benefits. I stand out by being educated and educating the customers so that they can go benefit from this new technology.”

Contractors typically also need to explain to customers why it is beneficial to move from gas heating, even if there is an initial upfront investment. For this reason, in conjunction with Electrify My Home, TECH Clean California gives courses on the contractor’s business model and whole-home electrification.

“We teach them how to understand electrification on a case-by-case basis for each home, and how to design the systems properly,” said Larry Waters, owner of Electrify My Home. “We teach them about all the new products that are available that are better choices to help reduce the overall need for energy.”

Educating contractors on the benefits of heat pump technology for their own businesses is a message that has resonated in the community.

“When you see it side by side and get a comparison with the gas technology, you realize – this technology actually makes great business sense, especially when you have these incredible rebate programs,” said Ben Shamoon, owner of LivSmart Home Services. “I’m not going to do our customers a disservice by selling them equipment that’s going to be less efficient and drive their energy prices up.”

Contractors say these courses are invaluable in getting better at installations and in learning how to communicate their benefits to their customers. In fact, more than 95 percent of contractors who participated in a survey by Opinion Dynamics said that they will use the learnings from these courses on a daily basis in their work.

“I took myself and my apprentice to the classes TECH Clean California offered, and it blew his mind how helpful the classes were,” Walsh said. “They are free classes through TECH Clean California. I have paid for these classes before, and they can be as much as $900 per class.”

Contractors who participated in a May 2024 survey of the program by Opinion Dynamics say that the education and technical support provided by the TECH Clean California team has made the transition to the new technology possible.

“I think the TECH team has done a great job at being accessible to contractors,” said one survey participant. “I’ve even heard from friends who work for really small plumbing companies that say anytime they have a question, they get it answered immediately.”

For Flores, the initial exposure he and his team got to heat pumps came through manufacturers in 2021, but the TECH Clean California courses gave them a lot more expertise that enabled them to feel confident in offering installations by 2023.

“A lot of plumbers are not confident or comfortable with the technology, but we are now partnering with a company who is consistently pushing the technology, and we feel comfortable doing the installations,” Flores said. “TECH Clean California has been there every step of the way, offering trainings, supporting us, and it has made a huge difference.”

TECH Clean California also offers a way for its participants to market their new skills. To become a TECH Clean California contractor, they first must register at switchison.org, provide documentation about their business and license, and complete the TECH Clean California training, including a range of installation-related courses. Additional technical and sales training from manufacturers is also available. TECH Clean California contractors are listed in the dedicated contractor search tool on the Switch Is On website. Successful completion of the coursework then enables the contractor to be identified as such via the Switch Is On, which includes a dedicated contractor search tool.

For contractors, being included on TECH Clean California recommended contractor lists also generate leads that are much more likely to result in an accepted bid, Walsh said.

“I close about three out of 10 customers who are not educated about the benefits of heat pump systems,” Walsh said. “For the kind of energy-educated customers that use these contractor lists, it is almost 90 percent closing rates.”

Contractors have also found that the incentive programs for adopting the technology have played a critical role in helping stimulate customer interest. These incentive programs are an important part of TECH Clean California’s broader implementation strategy, and it is planning to launch new heat pump HVAC and HPWH incentives later in 2024 with a new incentive structure. Contractors have also found the support provided by TECH Clean California has been invaluable in determining how best to process rebates. To let contractors weigh in on how the incentives system could be further improved, TECH Clean California offers an “office hours” program every week. In these sessions, contractors can meet with each other and with program managers to discuss how best to navigate new incentive requirements and optimize incentive application process to minimize waiting periods for rebates.

“We have established a dedicated time to bring up specific topics that may be pain points for contractors, and we talk about them via Zoom,” explained Lauren Gray, a program manager with Energy Solutions involved with overseeing contractor engagement issues.

As the rebate program has evolved, so too have the strategies for helping contractors adjust to any changes. Weekly office hours are part of the help that the program provides contractors, said Sam Khamseh, a senior program manager at Frontier Energy, which has partnered with TECH Clean California to administer contractor incentive programs. The TECH Clean California team has learned that providing direct support and discussing rebate issues with contractors has made a huge difference in their ability to navigate the program.

“I think that the forefront of the success of the program has come from the program representatives that we have been in touch with,” Shamoon said. “I’ve had some moments where we didn’t know if something was going to be able to be pushed through – a lot of things did change, from the 1.0 program to the 2.0 program, for example – and these guys held our hand throughout the process and are still doing so today.”

One of the challenges ahead for the program is how best to get the word out to the thousands of contractors who could benefit. Contractors like Flores and Walsh say that one of the best strategies is for contractors like themselves to spread the word.

“The heat pumps are more efficient, and the energy savings are nuts,” Walsh said, explaining that households that already have solar power could easily utilize this power with their heat pump system, removing much of their utility bills. At least 40 percent of Californians with solar panels do not use all their solar energy, meaning heat pump technology would give them the opportunity to save more by putting that solar generation to use.

“If you have solar plus capacity back up, you are just throwing money away if you are still mucking around with gas,” Walsh said.

And it is a great message to share with their colleagues: heat pump technology makes excellent business sense for contractors, right from the start, because of the training and the rebate incentives, and how it positions them for the future.

“If a contractor participates in TECH Clean California, they can be on the leading edge of this trend,” Lipscomb said. Indeed, more than two-thirds of contractors surveyed by Opinion Dynamics said that the training they received led to additional work opportunities, including promotions and raises.

“Long term, those leading companies are going to be the companies that people continue to look for first when they need a new heat pump or just need HVAC work done in general,” Lipscomb said. “It puts them at the forefront of this curve.”

Written by Emily Pickrell. For more information about this and other projects, please visit TECH Clean California’s Annual Report at techcleanca.com. The report highlights learnings and accomplishments through the initiative’s statewide focus and collaboration. The guiding principle of TECH Clean California puts the state on a pathway to six million heat pumps by 2030 and carbon-free homes by 2045.

Commentary: TECH Clean California contractors advance the heat pump market is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.

The following commentary was written by Bill Hayes, a finance executive who focuses on
electricity and environmental markets, and Joe Tedino, a Chicago-based writer focusing on the environment and sustainability. See our commentary guidelines for more information.

Last month, 13 senators — including the two representing our state of Illinois — sent a strongly worded letter to Treasury Secretary Janet Yellen calling out rules around the proposed tax credits for the green hydrogen industry as  “inconsistent with the intent and requirements” of the legislation they approved. 

They noted that the tax credits can be vital for incentivizing the production and market-viability of renewable hydrogen power, but the current proposed guidance could undermine the intent of the Inflation Reduction Act and hinder the green hydrogen economy.

We applaud this Senate effort and are pleased to see Illinois Democrats Dick Durbin and Tammy Duckworth were onboard in calling for revising the Treasury’s overly stringent rules. Both have been strong advocates of the Midwest’s MachH2 clean hydrogen hub, and they recently secured $1 billion in federal funding for this project.

The green hydrogen production tax credit in the IRA — the largest investment to reduce carbon dioxide emissions in U.S. history — has the potential to secure a significant role for clean, zero-carbon hydrogen energy in the U.S. by providing a tax credit of up to $3 for each kilogram of fuel produced. 

Yet as the Treasury Department grapples with how to implement rules for awarding the tax credit to hydrogen producers, there are warning signs that overly restrictive regulations may stifle the growth of what had been projected to be a $515B global market by 2035, according to global consultant Research Nester.  

We support the position led by Sen. Alex Padilla (D-Calif.) that asked for a host of changes to the rules in the interest of boosting a burgeoning energy supply that will achieve the intended carbon reduction in a less burdensome way.

At issue are the so-called “Three Pillars,” which are the standards adopted by the Treasury Department for determining whether hydrogen producers are entitled to receive the tax credit. The standards specify how, when, and where renewable electricity must be added to the grid to match the electrical load drawn to power the hydrogen electrolysis operations.

One of these pillars requires that hydrogen producers add renewable generation to the grid that matches their hydrogen load on an hourly basis, instead of an annual basis. The other two add specific location and facility requirements that further limit the flexibility for how and where hydrogen producers add renewable generation to the grid. 

Here’s the problem:  the standards are overly restrictive, leading to unnecessarily excessive costs for achieving the targeted carbon reduction impacts in the hydrogen sector, according to new research published in response to the Treasury guidelines. 

With regard to the extra costs, energy data analytics firm Wood Mackenzie analyzed the impact of just one of the pillars — hourly matching — and found that this requirement alone would raise the total costs of green hydrogen by 68 to 175%, compared to annually matched generation. 

Other researchers found that there is no additional carbon reduction benefit to this fine-tuned hourly matching. Comprehensive research by the consulting firm Energy and Environmental Economics, also known as E3, found that both annual and hourly matching have similar impact on CO2 emissions, across a wide range of scenarios and geographies. The Open Energy Outlook Initiative of Carnegie Mellon has come to the same conclusion. It’s not surprising, since both annual matching and hourly matching lead to identical increases in new renewable generation, and hydrogen producers have a clear incentive to generate their new renewable electricity in times and locations that maximize the amount of displaced fossil fuels.

In short, the hydrogen industry and the good jobs it will support will simply not grow as planned by the U.S. Energy Department if their costs double unnecessarily.

We hope the Treasury Department will look at this research and feedback closely, in order to achieve the targeted carbon reduction in the hydrogen sector at a competitive cost with environmental concerns in mind. Growth in the hydrogen sector is needed to clean up hard-to-abate sectors like steel and airlines, and it is also vital to address climate change.

There’s a global consensus that we need to urgently decarbonize to address the impacts of climate change. The Biden Administration’s goal to reduce GHG’s by 50% by 2030 and become net-zero by 2050 requires robust incentives to develop green energy industries as fast as possible. Without a viable hydrogen sector, we run the risk of being unable to fully decarbonize our economy.

Business leaders and individuals should call or write to the White House and to their representatives in Congress, urging them to revise the tax credit eligibility rules for hydrogen production to ensure the economic viability of this vital emerging industry.

Commentary: Strict regulations threaten the green hydrogen industry is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.

The following commentary was written by Larry Glover, a Maryland-based energy marketing & communications SME. See our commentary guidelines for more information.

This heat wave is only the beginning. As climate disasters and extreme weather events become more frequent, ensuring reliable and affordable access to electricity for all communities has never been more urgent. Places that we typically think of as pleasant in the summer months are becoming heat domes, and many electricity providers remain overwhelmed when their peak energy demand threatens the stability of the entire electric grid.

Clean, distributed, energy resources such as solar and batteries are anchoring our country’s electric grid in the face of extreme summer heat. And while the federal government has a duty here, state policymakers and regulators hold an immense amount of power to pave the way for these clean energy technologies.

Let’s start with the good news. Several states are beginning to realize the need for clean energy – both out of protecting energy users from losing power during extreme weather and as an equitable path forward. I’m heartened to see that Maryland is the latest state to heed those calls to action by enacting key legislation that will tackle this challenge head-on, establishing an equitable path toward a sustainable energy future.

This year, Maryland passed a trio of bills — signed by Gov. Wes Moore — to expand access to solar, stimulate the solar industry and require utilities to leverage distributed energy resources that will ultimately benefit underserved communities, which suffer the most from high-energy burdens and pollution. The Brighter Tomorrow Act directs the Maryland Energy Administration to earmark tens of millions of dollars in the coming years to provide upfront grants for low and moderate-income households across the state to install solar. The Drive Act, encourages utilities to harness these home solar and battery systems into virtual power plants (VPPs), which are networks of connected solar and battery systems that function as a unified power source. Finally, the Empower Act ensures those who invest in home batteries are fairly compensated, allowing people to invest in these resources to take care of their neighbors.

There’s not a one-size-fits-all approach to state policy promoting distributed energy, and other states have taken alternative routes. In Illinois, the Climate and Equitable Jobs Act (CEJA), designed to cut emissions across the state, encouraged a rooftop solar boom since its 2021 passage. Texas is on California’s tail for solar and storage, bolstered by a VPP pilot program approved by ERCOT last year. 

Unfortunately, for every state or region moving forward, others are moving back. Cuts to the net-metering program in California have caused the solar industry to contract to 2014 levels, and cost 17,000 jobs. Puerto Rico, a territory that is perhaps most in need of solar and storage as it faces frequent heat waves and hurricanes threatening the electric grid, also has net metering on the chopping block, with hurricane season barely underway. It’s truly mind-boggling.

Through the hottest summer many of us have experienced, every state is grappling with the escalating consequences of climate change.  As the White House, rightfully, continues to prioritize environmental justice initiatives, our state governments also have a duty to incentivize and enable clean energy resources. Our grid and our lives depend on it. 

Commentary: As heat puts pressure on the grid, Maryland is latest state to take action is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.

The following commentary was written by Sophie Loeb, policy analyst at the Center for Progressive Reform, and Michelle Carter, director of clean energy campaigns at the North Carolina League of Conservation Voters. See our commentary guidelines for more information.

If your energy bills seem high this very hot summer, brace yourself. Without drastic measures to curb pollution, summers will be hotter and staying cooler will be more expensive. Unfortunately, the biggest strain on our future electricity bills isn’t our air conditioning, our electric cars, or even our businesses — it’s artificial intelligence (AI).

Data centers have been consuming power all over the country since the 1960s. As the Internet has rapidly been integrated into our lives, so too have data centers. Big data’s assault on North Carolina continues unabated, creating more demand on our energy system and raising our bills.

The new wave of artificial intelligence has the power to change the very nature of our society, in many ways for the worse. Data centers running AI require a constant and consistent power supply, something the utilities in the Southeast have struggled with for decades. These centers raise our bills while providing virtually no benefits to our communities.  Data centers across the nation have been given tax incentives, lower electricity rates, and have created few jobs for the amount of resources they use.

As more energy intensive industries take root, we must protect our residents from both the increases in our power needs and our monthly power bills. Unfortunately, Duke Energy’s plans to meet the growing needs of industry expose us to further financial and health risks. Duke Energy claims that their plan, which proposes the biggest methane gas build out in the nation, is needed to meet growing demand, particularly for data centers.

Duke has also warned that ratepayers’ bills will rise if they don’t build these plants, but the opposite is true. Building out solar and utility-scale battery storage instead of gas would yield $8 to $12 billion in electricity savings by 2030 and $18 to $23 billion in savings by 2050. An Environmental Defense Fund (EDF) analysis shows that, for Duke Energy Carolinas customers, increases in fuel costs account for roughly 67 percent of rate increases since 2017. The research is clear: more dirty methane gas means higher energy bills, both now and in the future.

According to Goldman Sachs, data centers will require a $50 billion expansion in electricity generation infrastructure to meet the industry’s demand. This money to build big power plants will come directly from North Carolina consumers like you and me without proper protections from the state.

Why should residential customers, particularly those who struggle to pay their energy bills, pay for these costly plants? Who really benefits from the environmental, social, and economic burdens of artificial intelligence?

Unfortunately, protections from the pressures of data centers are nowhere to be found — for now. Duke Energy has undertaken deals with Microsoft, Google, and other major power consumers to expand renewable generation and protect our grid. Through these agreements, large customers can transition to clean energy while lessening the burden of their power demands on the rest of Duke’s consumer base.

Data centers must be subject to these same agreements — and more — to keep North Carolina ratepayers safe from massive price increases. Consumers deserve transparency and accountability with any new data center project in our state.

In lieu of data centers, North Carolina should invest in good, clean energy manufacturing jobs that promote economic development, resilience, and environmental sustainability. Already, the Inflation Reduction Act is slated to create almost 40,000 jobs by 2030. Tech companies could support these efforts with electric vehicle manufacturing plants, solar panel and battery storage manufacturing facilities, and further build the Southeast as a hub of clean energy manufacturing.

To better center people over tech companies and promote an affordable energy transition:

1. Utility commissions should require utilities to highlight explicit data on load growth from data centers so additional capacity is not passed on to residential customers.
2. Regulators should prohibit data centers from receiving subsidized industrial use rates.
3. The General Assembly should pass legislation enhancing stronger consumer protection laws for electricity ratepayers.
4. The state should form an Office of the People’s Counsel to protect customers from absorbing rate increases from industrial customers like tech companies.

As temperatures get hotter, there is no doubt our energy bills will go up. However, we must do everything we can to prevent massive projects from raising our bills even more. Investing in energy-draining artificial intelligence data centers not only increases electric rates for everyone, it takes away valuable jobs for rural communities. It’s time to invest in people over profits in North Carolina!

Commentary: Footing the power bills for AI is anything but smart is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.

This article is a paid promotion and the Energy News Network is not responsible for its contents.

The need to prioritize the installation of heat pumps in California’s low-income households is clear.

California’s Fourth Climate Change Assessment devoted a separate report on the challenges for low-income residents in the San Joaquin Valley and the resulting health implications. Affordable air conditioning is likely at the top of the list of health needs for the vulnerable in the San Joaquin Valley, where weather regularly exceeds over 100 Fahrenheit in the summer and fall.

“Some residents living in these homes are disabled, need regular medical attention, and are unable to work,” a program implementer noted in a pilot report update on San Joaquin Valley, reporting on the conditions that program recipients had endured prior to the heat pump installations. “Ethically, these customers need HVAC systems to live comfortably and cannot be overlooked.”

Yet ensuring that these same communities benefit from rebate programs to encourage heat pump installations is more complex.

It turns out that for low-income residents, participation in a rebate program can require thousands of dollars of additional out-of-pocket costs, relative to richer households, because the homes tend to be older, the electricity is more likely to need upgrades, and there are often additional modifications or infrastructure improvements required — such as replacing water damaged flooring or walls from leaks — to provide the power. These costs, for additional wiring and other critical work, are typically either only partially or not covered by most rebate programs.

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 identified these additional costs as a key barrier to introducing heat pumps into lower-income homes.

“If you are a lower-income or harder-to-reach person, you’re probably not going to participate in a program that requires you to do a $20,000 HVAC replacement that you can’t afford,” said Sandy Laube, an energy efficiency policy researcher at Energy Solutions, the program administrator of TECH Clean California.

To address this roadblock, TECH Clean California provided funding for an already existing program, the San Joaquin Valley Disadvantaged Community Pilot Project. The pilot is part of California’s broader effort to assess the economic feasibility of helping these residents reduce their energy costs by replacing certain appliances with electric ones. The findings will be used to determine how best to meet the State’s broader goals for addressing climate change and reducing the disproportionate climate burden these communities bear.

TECH Clean California, which has committed 40 percent of its incentive funding to income-qualified customers, has learned that working with other partners in equity work helps leverage that commitment even further.

For this effort, TECH Clean California experimented with encouraging greater participation from interested households, many of which were budget-constrained.

The San Joaquin Valley Disadvantaged Community Pilot program had funded the installation of heat pump systems into roughly 279 qualifying low-income homes in the San Joaquin Valley, but due to restrictions in how funding can be used, there is a $5,000 minor home repair remediation cost maximum. This put some of the needed repairs out of reach for would-be program participants.

TECH Clean California was able to provide enough additional incentive funding to expand the San Joaquin Valley Pilot, so that it could reach more residents. In fact, TECH Clean California successfully helped fund remediation work in 89 additional homes. “We saw that many of these lower-income households were not going to be able to participate and get the broader benefits of renewable power in their home,” Laube said. “We wanted to be equitable in how we are spending the incentive money, which has meant finding ways to include groups that would normally not participate.”

This additional TECH Clean California funding covered home repair expenses, trenching, and other infrastructure costs, bridging the gap between what the utility was able to fund through its program and what the end customers needed to install the new electrification equipment. As a result, eligible customers had no additional out-of-pocket expenses.

“The additional TECH Clean California funding ended up being very important,” said Jose Landeros, the Director of Energy Programs for Proteus. “If it had not been for those additional funds for the remediation, many of these customers would not have participated.”

The needed work which TECH Clean California funded were a subset of homes that PG&E’s Building Electrification program had identified as needing heat pump water heaters. For these homes in San Joaquin Valley, the preparatory work for installation in a 2022 pilot project revealed a broad range of preliminary repair issues that first needed to be addressed.

Many of these homes needed to relocate the new heat pump systems water heater to the exterior of the home, requiring the installation of a metal enclosure for protection from weather or other damage.

Several residences in the San Joaquin Valley also required panel upgrades to support the added load of the new electrical equipment.

“It costs more money to electrify low-income households,” said Rachel Etherington, an energy transition strategist with the Ortiz Group, who worked with the San Joaquin Valley community in facilitating heat pump installations. “You only know how bad it is when you’re on the ground. “There’s no pavement for example. You can’t put machinery on dirt. You must revert to manual trenching, so that’s a significant labor cost. And every single home needed an electrical panel upgrade. It gives you an understanding of why it’s such an interesting project, like the pioneer of low-income implementation.” However, these kinds of upgrades will have further benefits for customers down the road, providing the basis for further electrification.

“A 200-amp panel gives low-income customers a better availability of power for the future, meaning that if they do have to get an electric car, they now have the capacity to be able to put an EV charger on their house,” said Lyal Ray, a quality production manager for Synergy Energy who was actively involved in many of the installations for San Joaquin Valley. “They have the capacity to put battery storage that is provided for low-income housing.”

It’s these kinds of hidden costs that are proving to be a barrier for lower-income families to access the benefits that electrification technology such as heat pump water heater HVACs can provide. 

“Without TECH Clean California funds, 89 of these households would not have been able to participate, elderly residents who require electricity all day, residents on dialysis machines,” Etherington said. “They required a significant amount of infrastructure upgrades. But at the end of the day, these are people’s homes, and those TECH Clean California funds created a huge quality of life improvement for those households.”

Written by Emily Pickrell. For more information about this and other projects, please visit TECH Clean California’s Annual Report at techcleanca.com. The report highlights learnings and accomplishments through the initiative’s statewide focus and collaboration. The guiding principle of TECH Clean California puts the state on a pathway to six million heat pumps by 2030 and carbon-free homes by 2045.

Commentary: Encouraging heat pump technology for San Joaquin Valley residents is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.