It's not THAT hard!

Editor’s note: My company, Vayu, installed a new heat pump HVAC system for Alan earlier this year. His timing was impeccable, and we were able to stack quite a few different rebates to get within striking distance of the holy grail of a free heat pump.

Alan wrote this report unprompted and shared it with many of his neighbors, to encourage them to electrify their own homes. I’ve reproduced it unmodified here with his permission. His experience mirrors many of my other customers and is a great snapshot into an average homeowner’s experience getting a heat pump.

If you have electrified your home, I’d encourage you to share your own experience with your community in the same way! People trust their friends and neighbors, and community action is one of the best ways to motivate more people to get their own heat pumps!

Howdy neighbors, and Happy New Year! I wanted to prepare a little write up summarizing my positive experience replacing our natural gas fired furnace with a heat pump system. For those unfamiliar, heat pumps are like refrigerators running in reverse: rather than generating heat by burning natural gas, they move heat from outside air into your house, sending cool air outside in exchange. The finished system consists of three main components: the external heat pump, the heat exchanger inside the house (where the furnace used to be), and new 220 wiring from our main panel. The first two are shown here:

Why Did I Embark on This Mission?

Two answers here:

1. I wanted to save money by getting off natural gas, especially since we have solar on our rooftops.

2. I’m determined to reduce our CO2 emissions.

In a typical home, around 60% of your natural gas use is for heating, versus around 20% for hot water (the rest is cooking, etc). So I started with HVAC and plan to tackle hot water next (hopefully very soon—stay tuned!).

I began researching various options early last year, even joining a couple of niche Facebook groups (hit me up if you’re a nerd and want to dive into all that!). I ended up having one of the “big names” in HVAC come out to give me a quote for a full system, including replacing the (original!) ductwork under the house (we have central air, as I suppose many of you do). Their estimate came to $38,000, which didn’t surprise me as I’d heard these systems are notoriously expensive. Still, it got the ball rolling, so I started shopping around.

Alternative Solutions: Harvest Thermal

Then I learned about a company called Harvest Thermal, which offers a high-tech solution for both hot water and heating. Essentially, it uses water to store energy by heating it to a very high temperature (180°F) using electricity during off-peak hours. This hot water is then passed through a heat exchanger to heat your home or provide hot water as needed.

While their technology is cutting-edge and likely the most energy-efficient solution currently available, I ultimately decided to go the conventional route. My concern was their newness as a company and the potential risk if they were to go out of business. Still, they are brilliant people with an excellent solution. If you’re interested, I have their quote and details on relevant tax incentives and rebates. It’s also worth noting that it is likely the most energy efficient solution for heating and hot water available, bar none, at this time. And… they do not provide cooling without adding another heat pump.

The Solution I Chose: Vayu

I met Shreyas Sudhakar on LinkedIn (I’m very active there). Shreyas recently launched his startup, Vayu, which is on a mission to install more heat pumps in the Bay Area. I was his third client. I wasn’t worried about lack of experience: he left his previous startup after close to 2 years and many heat pumps in order to start his own where individual attention was prioritized over fast scaling of the business. Before that, he was literally a rocket scientist at Blue Origin and SpaceX.

In his own words: “I know heat pumps inside and out. I founded a national heat pump installation company, raised millions in venture capital (including YCombinator), and built the business from the ground up. I worked alongside homeowners to build their understanding and trust, crawled through hot attics and tight crawlspaces, and installed countless heat pump HVAC systems with my team of talented technicians.”

So after coming to measure our house, and running the numbers on our heating bill, he proposed a system with the right heating capacity for our home. The numbers looked good! His bid came in at less than half of what Bellows originally quoted, but to be fair their quote included 6700 for the ductwork. But in the end, we now have a much improved home comfort and no longer need to burn natural gas for heat!

Incentives

It took some digging, but I think I’ve found most of the incentives available. A good place to start your own digging is the incentive finder at switchison.org 

Some have income requirements, some don’t. This table shows what I ended up using. DISCLAIMER: I have applied for, and been approved, all of these, but it will take a few months (possibly as late as April) before I receive any money.

Note that our income is low as we are on social security and my wife only works part time.

Income eligibility is based on tiers:

• Low-income (below 80% of the area median income)

• Low-middle income (80%-150%)

• Above 150%

For the HEEHRA incentive, you need to be in one of the first two. For example, in Santa Cruz, for a family of four:

• The $8,000 rebate applies to incomes below $145,000.

• The $4,000 rebate applies to incomes below $272,000.

Luckily, the fine people at switchison.org have a calculator for this here.

For our project, the net cost ended up at just under $3000 after incentives and tax credits:

Including the duct work (see below), we came out well below $9000. You might be able to save more if you can use your existing ductwork. Important: your price for the heat pump system would likely be higher, as we have a smaller home than many of you at around 1600 sq ft. Also, there’s a window of opportunity: some of these incentives will be depleted in coming months, so if you’re considering any of this, better get moving! Here’s a site that is current as of 1/14/25 listing the amount of money left in the various incentive funds.

Ductwork

In our case, we needed all new ductwork, for two reasons:

1. Ours was original, and in pretty bad shape.

2. Heat pumps produce air at a lower temperature than furnaces, so larger-diameter ducts may be needed for increased airflow to heat the home effectively.

This was a separate expense. Shreyas at Vayu gave me a quote of around 8k for this work but you might be able to do it for less if you shop around locally.

Here’s the duct routing diagram Shreyas made based on the floor plan I sent him (we have 11 floor ducts in our home):

I used a free trial of Houzz Pro to do the floorpan just by walking around the house for five minutes with my iPhone. It’s not super-accurate but it was good enough to size our system. The blue lines are the ducts going to our floor vents, and the red ones are the return (air intake to the heat exchanger, in our case these are in the attic and the red squares are two large ceiling grills).

The light blue numbers are the diameters of the ducts. These were all calculated for us by Shreyas who has some fancy HVAC design software. Shreyas also recommended we install dampers at each branch point, which allows balancing the airflow after the fact if some rooms end up being too hot or too cold (you just shut down the damper a bit in the hot zones).

Conclusion

At the end of the day, we have:

• A new efficient central air heating system that provides better comfort and saves money.

• A smart thermostat that optimizes our heating to avoid peak electricity rates.

• A home that emits far less CO2 than before.

I’m thrilled with the results and am happy to answer any questions. Feel free to email, call, or knock!

Thanks for reading!

Alan Peevers

Closing note from the Editor: The situation is a bit different today. The HEEHRA rebate in Northern California ran out of funds just a couple months after it went live. Soon after, the TECH Clean CA rebate program abruptly ran out of funds. The budget for the local utility rebate from 3CE that Alan was able to take advantage of is almost exhausted, and the federal tax credit is under threat. And between the refrigerant transition and tariffs on imports, the cost of heat pump equipment has increased from the prices reflected in this article.

I’ll write about the challenges of changing rebate program landscapes in a future article.

If you live in Central or Southern California, the large HEEHRA rebates are still funded, for now. If you meet the income qualifications, you may be able to get a heat pump installed for a significantly reduced cost. Likely not as low as the total out-the-door pricing reflected in this article, but still meaningfully lower than a standard gas furnace + one-way AC. Feel free to drop me a note (you can hit reply to this email) if you’re in SoCal and want to take advantage of the HEEHRA rebates, I’d be happy to help guide you through the process.