There’s also the argument to be made (this has manifested in other countries) that as gas usage wanes and more homes electrify, nat gas costs will increase as the infrastructure costs are spread among fewer and fewer people
> There’s also the argument to be made (this has manifested in other countries) that as gas usage wanes and more homes electrify, nat gas costs will increase as the infrastructure costs are spread among fewer and fewer people
This has kinda wonky incentives though - if your fixed costs for gas are high but your marginal costs remain low and for whatever logistical reasons you can't cut the gas connection entirely, then your motivations are to move as much of your heating load over to gas as possible.
I'm currently facing this dilemma when it comes to my new water heater purchase. The $/kJ actually delivered into the water difference is so significant despite gas being less efficient that I'm probably going to switch to gas. Electricity has gotten so expensive that even with an efficiency advantage it still loses on the order of $500-800 per year.
Is gas actually less efficient? I haven't had to work out the math myself yet, but there are some very salient variables - e.g. what's the energy source of the electricity? If it's a natural gas power plant, you're looking at like 30-60% efficiency of gas->electricity in the first place. Are you looking a at a heat pump heater? If so, how much of its energy would be pulling heat from the house that needs to be replaced by the home's heating supply anyway?
This is the kind of thing where a carbon tax is great for sorting out the pricing to match the externalities.
You might be right, I'm just talking about "last mile" efficiency. I get electricity at $/kWh and gas at $/therm and then an electric heater is x% at converting that electricity into hotter water and a gas heater is %y. From what I can find y < x for water heaters on the market. But even despite that my $/therm is so low that it still comes out ahead.
> ”Are you looking a at a heat pump heater? If so, how much of its energy would be pulling heat from the house that needs to be replaced by the home's heating supply anyway?”
Heat pump water heaters pull heat from the outside. Usually with a split outdoor unit, just like normal A/C and heat pump systems.
I’ve also seen models where the entire system (integrated storage cylinder for the heated water) is installed outdoors, but those are presumably meant for more mild climates.
In any case, they certainly don’t pull heat from inside the house.
Heat pump dryers don’t cool the room either because they work in a closed loop. There’s no external vent removing hot air to the outside like a conventional dryer. So they pull heat from the room but also put it back in the room, and the overall effect is to warm up the room slightly.
I skimmed the article (so forgive me if I'm off.) It appears to reference non-US markets and the parent was assuming US (my assumption).
AFAIK, the US has a mid-long outlook of gas oversupply. EU's market is broken and has 3x the price (c.f. Henry Hub v. TTF). I haven't seen any major forecasters predict reaching parity anytime soon. Hence, LNG export projects keep getting (over-)built to chase the arbitrage.
Quality control by the contractor is soooo important. Formicary corrosion like you described can happen if a contractor doesn't pull a proper vacuum on the system to evacuate moisture before releasing refrigerant. I saw an anecdote where Bill Spohn, who literally owns an HVAC tools company, had this happen with the contractor installing a system in his own house! (https://www.heatpumped.org/p/are-heat-pumps-a-commodity)
I suspect it's especially bad with new builds, as new builds are a race to the bottom and every subcontractor is fighting to get the lowest bid. The best way to make it cheaper is skip steps, and that hurts in the long run. Sorry you ended up in that situation, crummy experiences like this set the industry back. For what it's worth, the same corrosion could happen with a traditional AC system too (it's not just heat pumps). But the difference is, often those refrigerant lines don't get as hidden on interior walls as the ones for ductless mini-splits do.
> The white insulation material, typically made of polyethylene or similar compounds, was found to degrade prematurely when exposed to UV radiation.
According to my contractor, this was a problem with lineset manufactured in 2016 and a little after. All of the HVAC companies that I called understood the "white lineset" problem.
pretty sure the white insulation on the lineset, when exposed to moisture and UV, can create an acid that eats the copper. thats probably what happened
That said, I've found that in most cases (assuming you're on the right electric rate plan, that's a whole other conversation, see https://news.ycombinator.com/item?id=42763695), most homeowners in california actually see operating cost parity or a slight decrease, even with super expensive electricity. Silicon Valley Clean Energy recently did a study substantiating this: https://svcleanenergy.org/wp-content/uploads/Bill-Impacts-of...
> most homeowners in california actually see operating cost parity or a slight decrease, even with super expensive electricity
But you’re missing my first point though, installing a heat pump system comes with a price tag of tens of thousands of dollars. I’m not doing that if my operating cost is at parity or a slight decrease. It’s the same reason people are no longer incentivized to install solar. And to add to that, installing heat pumps also come with additional costs that can range anywhere from a few thousand dollars to replace the main electrical panel to tens of thousands of dollars for a full electrical upgrade if your house is on knob and tube wiring to reduce fire risks.
If you DIY everything and go with server rack batteries you can keep the costs low enough for a reasonable break even point. Any middleman is going to gouge.
I just got 10 new 585w panels and inverter for under $5k. A battery is gonna cost me $1500 but at $350 month for electricity, not sure how you can claim it not worth it.
Home solar makes perfect sense in Australia - a market with similar Labour costs to California - because they do it for 1/3rd of the cost.
It makes no sense in California when the subsidies alone are higher than the total costs for utility scale solar.
> installing a heat pump system comes with a price tag of tens of thousands of dollars.
Mine cost US$250 for the machine, refrigerant included, and another US$80 for the installation. We've had to have it fixed twice due to factory defects. Its heat output is 3400W, nominally consuming 941 watts of electrical power. It's not a great machine, but you're smoking crack.
Skilled labor in the US is expensive! Most of the install costs come from labor, not equipment. Tens of thousands of dollars is pretty typical for a heat pump installation.
(For what it's worth, the person you're quoting is referencing a whole home system, either ducted or multi-zone ductless. I think you're referencing a single-zone ductless. Those are cheaper, but still are typically $5-10k installed from a licensed contractor in the states)
Yes, it's just a mini split. Two guys (skilled, but AFAIK not licensed) installed it in about 6 hours. I'm in Argentina, but I don't think US$1000 an hour is a common labor rate even in the US? Maybe for a famous lawyer or surgeon?
Ha. It's not straight labor. So much other overhead to consider - workman's comp insurance, back office staff, technician utilization, vehicle repair and maintenance, etc... There are lots of other costs that get baked in when you're looking at a licensed company compared to a guy in a truck
Okay but US$5k for half a day of work? It would have been faster if the guy had had his own ladder instead of us moving my desk so he could stand on it to work. (He's bought one since then.)
A half day of work, a half day of office rent, a half day of truck use, a half day to pay for loan servicing, a half day to pay overhead costs, a half day to add to reserves for the half day you don't work, and so forth.
My house has six rooms, but the 3400-watt heat pump is only enough to heat two of them. If it costs tens of thousands of dollars in the US, say US$25000, you would expect the resulting installation to be able to heat or cool about 200 rooms rather than 2, producing 340 kilowatts of heat output (1.2 million BTU per hour) and consuming 94 kilowatts of electrical power (430 amps at 220 volts). Indeed, because houses gain and lose heat only through their surfaces, you'd expect the 100× bigger US$25000 heat pump installation to be able to heat or cool a 2000-room building rather than merely 200.
Most houses in the US have less than 20 rooms, let alone 200 or 2000, so it's not mostly because houses are bigger.
In Southern California it costs $120 just for a guy to come out and look at your HVAC. Not fix anything--not install anything--just to look at it and give you an estimate for how much the repair is going to take. I went to the website for a local installer and they give a ballpark of $13,000-$25,000 for a heat pump installation.
I don't know why it's so expensive here. It shouldn't be, it makes no sense. But it is.
The first point is very valid too. There was an energy commission study a few years ago, and up front cost is pretty consistently one of the biggest barriers to heat pump adoption.
I think there's some nuance to that, though. Even replacing a furnace + AC in California amounts to tens of thousands of dollars! It's not that heat pumps are expensive, it's that construction work in general is expensive.
When you frame it in terms of percentage of home cost, it actually feels a lot more reasonable. Robert Bean is a pretty respected voice in HVAC, and shared this article a few years ago (https://web.archive.org/web/20150210053806/http://www.health...). The gist is (and this is focused a bit on new construction, so not entirely apples to apples) that you should budget 3-5% of the home's cost for a bare minimum code compliant HVAC installation. When you look at it in that lens, $20k to replace the most complicated mechanical system in a $3M home is less than 1%.
"Productivity growth in the goods sector raises the wage in that sector, but also raises the output of that sector. So the ratio of wage to output - a measure of the cost of a unit of output - stays constant over time. Higher wages in the goods sector put pressure on wages in the service sector, so wages rise over time there. But (taking the exteme position) productivity is not growing in services, and so output is not growing. The ratio of wages to output in services - a measure of costs - is thus rising over time. This is the “cost disease of services”."
While I don't think that's all of it, it is a helpful framing of the economics around these dynamics.
There are some companies out there that are truly price gouging. But many are just pricing around the true cost of labor and to run a construction business. I've done a little writing around this topic too: https://www.heatpumped.org/p/pricing-transparency-peeking-be...
Ultimately, I would love to see upfront prices & operating costs for heat pumps both fall. But there are a lot of tough realities baked into the cost of these systems. They are still a very logical choice for most homeowners at the time of failure. Especially with rebate & incentive stacks in many places, a heat pump actually works out cheaper than a new furnace + traditional AC for many homeowners.
I just wrote a big thread yesterday responding to someone with similar concerns to yours (https://bsky.app/profile/shreyassudhakar.com/post/3m3w3nra2h...). Copying it here if it's helpful to other folks. FWIW, the challenges you are facing seem to be grounded in bad design and application, which happens more than it should and really sucks. We need to move the bar much higher for the contractors installing heat pumps. Here's what I wrote on that thread:
This is why contractor & homeowner education are so so so important to get this energy transition right! I always hate to see reviews like this from folks that have installed a heat pump.
It’s almost always a combo of poorly communicated expectations & installer issues.
A few thoughts…
1) “Air doesn’t come out hot” is a common complaint. It’s by design! You don’t need scalding hot air to have a comfortable space. If you’re targeting a 70 degree setpoint, even 80 degree air will get you there eventually. Heat pumps work best when you let them run - they soak the space with heat.
Your furniture, walls, floors all equalize in temp and radiate heat. A totally different form of comfort than standing in front of a vent that blows hot air at you for 5 minutes and then shuts off!
2) AC doesn’t reduce humidity as well. Unfortunately, this is a classic problem with oversized heat pumps. The key to dehumidification is runtime. A well sized system will run for longer, which will pull the humidity out of the space. If the system is too big, it’ll cycle on and off & not dehumidify.
Your contractor should be do load sizing calculations to determine the size of your heat pump, not using rules of thumb or matching the size of the existing equipment! The very best contractors use performance based load calcs, where they look at your past energy bills to size your new system.
3) Supplemental heat runs a lot - this SUCKS. Electric resistance heat is really expensive to run. It really should be something that comes on for emergencies, if ever. Definitely not regularly.
Many contractors set the temperature where the supplemental heat kicks on way too high. You could be running the heat pump (which is way more efficient) to a much lower temperature, but it’ll switch to expensive aux heat instead. Fortunately, the fix to this is simple - just a thermostat setting.
In other cases, they’ll install a cheaper mild climate heat pump in a truly cold climate. This might save money up front, but it’ll kill you in operating costs when you’re paying 4x as much as you could be in the middle of winter to heat your home. The lowest bid could cost you in the long run!
PS - this homeowner later chimed in that swapping the thermostat helped reduce their electricity bill roughly $30/month! A lot of heat pump issues actually boil down to a poorly configured system. Choosing the right contractor is probably the single most important decision you'll make when you get a heat pump installed.
This. I had 12 contractors come out for an estimate. I insisted to each that I would only consider estimates accompanied by a Manual J (aka show your work). I got 4 estimates with a manual J, and one of them the vendor said ‘despite that the math says you need a 4 ton outdoor unit, I’m giving you two,’ and refused to budge on that.
I went with a vendor who did the math and sized accordingly and my system works great - great comfort year round and very low energy usage.
If we’re trying to bring down cost the this is the issue with so many contractors coming out. The cost of sales is about 10-15% of the installation in the US. So thats $2-3k in California per heat pump
Try to get an install for $600 like in Japan when you have to pay $2k to find the customer.
Let’s have a lower cost sales process. Review 12 companies online, pick top 3, ask them to come out.
Yeah in case it wasn’t clear - I wasn’t asking a million vendors to price the job, I was asking them to do a manual J so they could price the job. It took 12 to get 4 to do the manual J. The other 8 came on-site and then refused to do the calcs even though I told them before coming out that it was a prerequisite for me to consider their quote.
I got a variety of explanations for why they weren’t going to do it, most of them along the lines of ‘I’ve been doing this forever - I know what I’m doing,’ but a few disappointingly ‘I don’t know what a manual J is.’ Again, this was AFTER my telling them over the phone that I wouldn’t consider a quote that wasn’t based on the calcs.
Yep, the cost is in the trip is a big factor but sounds like it was their choice to try to sell you. You did the right thing by asking them do the calcs before they came out. Millions of questions are time consuming and costly but better than someone rushing into and pausing mid project with in-decision.
We (I'm cofounder of Electric Air, HVAC contract) have had people pause on day one of install, and that ends up costing the company $10-20K due to delays. Mostly because there isn't something for the team to do for that day or two while we scramble to line up the next customer.
I've had a similarly frustrating experience trying to get contractors to redo my gutters.
They seem fine with the gutter part, but once I explain my rain collection system and my requirements around specific downspout sizing and simultaneous overflow, they just seem to have no interest in doing the bit of work required to make it all fit together.
Wild that you put it on the customer to reduce the sales cost.
I can see it being reasonable to explain during the initial contact that you want the standardized estimate, once that happens it's not really on the customer if the contractor goes out to chase the business even if they know they aren't going to do it.
You are right! I was unfair. The customer was clear they wanted ManJ calcs.
It's not the customer's problem to reduce cost. The high cost is the customer's problem through even if they are not to blame. And given I have a first hand experience in the cost stack of HVAC company, I would happy to share how a HVAC contractor thinks.
> 2) AC doesn’t reduce humidity as well. Unfortunately, this is a classic problem with oversized heat pumps. The key to dehumidification is runtime. A well sized system will run for longer, which will pull the humidity out of the space. If the system is too big, it’ll cycle on and off & not dehumidify.
What if I want more humidity?
(The traditional way with a furnace would be with a bypass humidifier, where ultimately, the energy to vaporize the water comes from whatever the heat source of the furnace is.)
I'm in Northwest Montana. My ground source heat pump doesn't struggle until the highs outside are -20F (actual, not wind-chill). I have the backup heat strip, but the breaker is off. I don't know when it would turn on, I just wanted to know it wouldn't without me knowing it.
I'm in Canada at a similar latitude with ground source, resistance heating normally kicks in at about -25C (-13F) or so, just a few hours on the coldest nights, doesn't cost much. I could probably leave the breaker off too, I wouldn't mind it a degree or two colder.
Ground source is often the only choice here. While air source can technically work well down to these temperatures, much of the available equipment doesn't suit some homes.
Ground source is largely going to maintain capacity independent of the outside temps, so the resistive would turn on when the heat pump isn't keeping up with the heat loss.
Heat pumps can make the room 90 degrees if I want. But the point is that you can make the room 72 degrees with 80 degree air running constantly rather than 20 minutes of 100 degree air per hour.
Hey Paul! Good to see ya on here. I'm in a Facebook group of small HVAC contractors, and recently there was a conversation about who is installing heat pumps vs traditional ACs and furnaces. I was thrilled to see that most were saying that they are moving a lot of their business toward heat pumps. Of course, there were a few that were stuck in their ways and were "gas or die" type people, but it's exciting to see the ship slowly starting to turn. There are more and more heat pump forward contractors coming online every day, and it's great that we can team up with folks like you pushing the hardware forward. There is so much work to deploy these systems, and winning is going to look like all of us working together!
Brendan Ballou’s book “Plunder” is an excellent read about the effects of private equity across industries, if you want to go deeper on the topic. I recently had him on my podcast talking about the effects of PE in HVAC. There are quirks in each realm but the themes are common (I guess in libraries, too).
I'm not sure if Joseph used AI in his writing process, but I was one of the folks he interviewed for this piece and I helped proofread it (along with others). So I'd just like to chime in and say that he did put a bunch of effort into writing it, researching it, and fact checking; it's not just AI slop.
Not really, natural gas has immense exposure to geopolitics and the commodity markets: https://www.iea.org/commentaries/what-drives-natural-gas-pri...
There’s also the argument to be made (this has manifested in other countries) that as gas usage wanes and more homes electrify, nat gas costs will increase as the infrastructure costs are spread among fewer and fewer people