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This is your house on electrons: Heat pumps electrify the Bay Area

Bhima Sheridan standing next to the outdoor unit of the heat pump at his Berkeley home.
Mary Catherine O'Connor
Bhima Sheridan standing next to the outdoor unit of the heat pump at his Berkeley home.

If you have questions about electrifying your home, scroll down to the resources section below.

The first thing I noticed inside Bhima Sheridan’s stately home in Berkeley is the remarkably ornate trim along the ceilings. But I’m not here for the architectural details. I’m here to see something Bhima’s way more excited about: his new heat pump.

We walk out to the side of his house to check it out. It looks like a smaller, boxier version of a conventional air conditioner. Heat pump technology isn’t exotic — you have one in your fridge. But in addition to cooling, heat pumps can also work in reverse, sending warm air into the building for heating during winter. And here’s the big sell: heat pumps run on electricity and they’re very efficient.

“We want to electrify everything to get rid of fossil fuels,” Bhima tells me. “So that you know, we can then provide all of our energy from renewable methods.”

Bhima has a background in solar and is a climate activist. He’s also a landlord. He has tenants in three apartments — one below his living space, and two in the back. So installing this system, which serves the whole building, was a big ordeal. But Bhima says it was worth it.

Berkeley tries, and fails, to ban gas in new buildings

I think this is the future of heating and cooling,” he says.

Bhima Sheridan stands next to one of the heat pump HVAC radiators inside his home. It provides both heating and cooling.
Mary Catherine O'Connor
Bhima Sheridan stands next to one of the heat pump HVAC radiators inside his home. It provides both heating and cooling.

Local lawmakers agree. Back in 2019, Berkeley banned natural gas in new construction. It was one of the first cities to do so, and it thrust gas appliances into the national discourse. It also sparked a culture war, stoked by conservative media.

The restaurant industry also had a meltdown about not cooking with gas. It sued and won. This kept some cities from imposing their own bans, but San Francisco and many others still have electrification measures on the books.

Bhima thinks these kinds of regional bans aren’t enough, though. He says we’ve got to think about the source of the electric power coming from the grid.

“The production of carbon dioxide really is the big problem. It's a huge 800 pound gorilla, right? So that comes with switching our production of electricity to renewable,” he says.

Bhima Sheridan's home, which includes three rental units.
Mary Catherine O'Connor
Bhima Sheridan's home, which includes three rental units.

Rebates and unicorns

But electrifying everything inside your home is complicated. Bhima's project took a lot of time, and money. There are a lot of rebates and incentives right now, but they can be hard to navigate. Bhima got one from the state for multi-unit homes — actually, one was for the HVAC part of the system, and one was for the water heating — but he got lucky because all of the rebate funding was claimed very quickly.

And it was a sizable rebate, nearly $8,000 for water and space heating for three units. But it didn't cover things like labor and opening up walls for plumbing and wiring. All told Bhima’s budget for replacing a total of seven gas appliances was around $70,000. And even though heat pumps are extremely efficient, this investment won’t necessarily lead to lower utility bills because PG&E has recently raised its electric rates.

Plus, Bhima has professional experience in clean energy and just happens to be a landlord who is willing to upgrade tenant’s apartments without even being asked. People like him are unicorns. So the house-by-house approach doesn't scale quickly — even in a super green town like Berkeley.

Aggregating demand, block by block

In Oakland, a government program is testing a different approach, as I learned from Therese Peffer, associate director of the California Institute for Energy and Environment at UC Berkeley.

Ecoblock is helping groups of homeowners approach energy retrofits as a collective. It grew from a study at UC Berkeley. Researchers wanted to see if they could take a full city block, especially one with a lot of older homes that lack insulation and double-paned windows, and do major energy upgrades on all of them. That includes replacing gas furnaces and water heaters with heat pump models, as well as adding solar and even a shared, central battery that could serve as a power source during a power outage.

Therese says the project, involving 15 buildings, is definitely complex. And there’s a great deal of coordination required between the city, contractors, and PG&E. The California Energy Commission is funding the project, so residents don’t need to spend a dime. But the project has required lots of trust-building.

Therese Peffer is the associate director of the California Institute for Energy and Environment at UC Berkeley
UC Berkeley Center for the Built Environment
Therese Peffer is the associate director of the California Institute for Energy and Environment at UC Berkeley

We had one homeowner drop out,” says Therese. “There were a lot of concerns.” Sometimes those were around permitting, other times it was just a general unease about signing contracts that were somewhat hard to parse for folks not familiar with legal language.

Now, Therese hopes neighbors elsewhere will take a cue from this project by trying to buy in bulk. “Go to a solar company,” she says. “Or a heat pump contractor and say, ‘Hey, can you give us a 10 percent discount? You’ll get 10 houses here.’”

Plus, banding together means learning together.

“If you don't know anyone with a heat pump or if you don't know anyone who's ever had solar, you can't ask them. And so the idea about going into a neighborhood, you're starting to get those conversations happening,” she says.

The wave is coming

For his part, Bhima Sheridan is already talking to other landlords about making the switch. And he thinks eventually, when it's no longer economical for utilities to pay for the infrastructure, all gas will be in the past.

The Bay Area Air Quality Management District recently passed regulations that will likely accelerate that timeframe. In 2027, new rules will gradually phase out gas hot water heaters and starting in 2029, that will extend to gas furnaces, too. The rules apply to all homes and apartments — not just new builds. (Appliances already in service can remain, but once they’re no longer working, they’ll need to be replaced with versions that produce zero nitrous oxide emissions, so that means electric.)

So, whether you're chomping at the bit to start electrifying, or you find this all about as interesting as doing your taxes. The heat pump wave is coming.

Rebates and resources

If you are a Bay Area resident and want to know more about rebates and incentives, here are some key resources.

  • The Building Decarbonization Coalition (BDC), a nonprofit that works with government agencies, utilities, manufacturers, and other building sector stakeholders, maintains a directory of rebates and incentives on a website called The Switch is On.  
  • Quit Carbon, an organization that runs on grants from government agencies and commissions from contractors, offers homeowners free concierge services to guide them through the electrification process. It also offers small rebates directly. 
  • There are a number of community choice aggregators in the Bay Area. These organizations aggregate purchasers within specific jurisdictions and use that to secure clean energy contracts. Here’s a list of CCAs in California. Your local CCA may offer electrification rebates or other incentives.
  • The nonprofit Rewiring America offers separate planning guides for homeowners and renters, as well as an incentive calculator. The website is not specific to the Bay Area, and you’ll need to provide your email and opt in to dig into the information.  
  • Some local contractors specialize in electric, high-efficiency appliances and energy systems. Check out the decarbonization organizations listed above. They have contractors lists.

For homeowners

Friday Apaliski, who directs communications for BCD (The Switch is On), says rebates and/or incentives, like tax credits, are available at four main governmental levels: Federal (through the Inflation Reduction Act), the state (Tech Clean California), regionally BayREN ( Bay Area Regional Energy Network) offers incentives across the nine Bay Area counties, and finally at the local utility and CCA level.

When it comes to how these different offers work in concert — or not — she says it can be complicated. “If you are trying to approach your electrification project from an incentive lens,” she says, “there's a lot of moving pieces. Some things can be paired and stacked, other things cannot be.”

The incentive database on the Switch is On website shows which offers can be stacked and which cannot.

Apaliski also encourages folks to look up “income-qualified” offers. Those are generally for applicants that make 80 percent of lower than the area median income (AMI).

“Many people don't think that they are income-qualified when in fact they may be. So it's worth double checking,” she says. “And those rebates are intended to cover much more of a project than the market rate rebates are.”

For landlords

Some incentives are for single-family homeowners, while others are available to multi-home dwellings. Check the websites listed above. If you’re a landlord, keep in mind that starting 2027 and 2029, the Bay Area Air Quality Management District rules will prohibit new gas water heaters or gas furnaces, respectively, in all buildings. So if those appliances in your rental units are nearing the end of their useful lives, it could be smart to replace them now in order to take advantage of rebates and other incentives.

For renters

You still have some options even if you don’t own your home — that’s especially true for kitchen appliances. You can buy:

  • A single or double countertop induction range to use instead of your gas stove. Costs range from under $100 to around $250. PG&E actually offers a try-out program so you can try one out for two weeks for free.
  • Electric tea kettles allow you to cut a good deal of gas stovetop use.

If you’re a renter but are willing to spend money for more advanced alternatives that you can move with you to your next home, you could update your stove to an induction model. The Channing St. Copper stove plugs into a standard wall outlet. And an efficient (though more expensive) alternative to conventional window box air conditioners are heat pump models that provide both heating and cooling — and you can move them to your next home.

A last word on electrifying: Apaliski says to be prepared to spend some time on this. If you wait until an appliance dies, you might not be able to replace it with an electric option in a timely manner.

“Contractors and installers are very busy. They have more work in front of them than they can do,” says Apaliski. Based on that, and because it can take time to find and land a rebate, she says, “We really recommend that people think about these projects ahead of time.”

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Mary Catherine O’Connor is a radio and print reporter whose beats include climate change, energy, material circularity, waste, technology, and recreation. She was a 2022-23 Audio Academy Fellow at KALW . She has reported for leading publications including Outside, The Guardian, NPR, The Wall Street Journal, Al Jazeera America, and many trade magazines. In 2014 she co-founded a reader-supported experiment in journalism, called Climate Confidential.