If a homeowner switches to heat pumps but continues using gas for cooking, they’ll still have to pay the full fee, which can be as high as $34 a month
I wish it were a high of $34. My “Basic Service Charge” is $43.30, and the gas company has proposed increasing it past $50. While they claim it is for infrastructure upgrades, I am sure keeping people on gas is a huge part of it.
And it isn’t just cooking. Yes, my range is gas, but so is my hot water heater and clothes dryer. And with 100 amp service, and replacing everything with electricity and canceling gas is a tough ask. And at least I have forced air. People with radiant heat are an even tougher issue
Subsidizing heat pumps with a tax credit isn’t enough. We need help making all the needed changes, including service upgrades.
And HVAC companies need to get on board. Technology Connections just released a great video showing (1) that HVAC companies routinely oversize heat pumps because they just grab the capacity of the gas furnace, adding cost and reducing efficiency (as gas furnaces are no less efficient when oversized), and (2) that HVAC companies overprice heat pumps, as they are just air conditioners with a reversing valve that switches which coil is the evaporator and condenser,
My HVAC system here in the midwest is getting long in the tooth and will soon be due for replacement, but with little more than the tax credits, I don’t know that I can afford to go heat pump, regardless of the environmental benefits.
In the US, panel upgrades are subsidized by the Inflation Reduction Act too. It won’t cover the full cost of getting off gas, but it does make it appreciably cheaper.
The Inflation Reduction Act is nice and all, but it stops too far short of fixing the issues.
First and foremost, the subsidies are in the form of refundable tax credits, which means you have to have thousands to front until you get your tax refund the following year.
Second, it isn’t much. You get a max of $600 for a panel upgrade. They say that can cover up to 30% of the cost, but no panel upgrade is only $2,000. Especially in an older home (where you are apt to find 60 and 100-amp service) that might need extensive wiring work to bring it up to the current NEC. It is likely it will only cover 10%-15% of the cost, which again, only comes as a refund months later.
And it is even less because it has to be combined with other energy improvements, which means you are fronting even more money.
Heat pumps are much the same. Only a $2,000 credit on what is likely a $12,000+ project.
And let’s not forget there is also a $600 credit each for stand-alone air conditioning and furnace. So unless a year pump is only $800 more than a new furnace and AC, the tax credit isn’t helping much.
If we want people to pick the green option, the green option needs to be the least expensive, not just in the long term, but thanks to boots theory also has to be cheaper in the short term.
The rules let you get the tax credit as a rebate when the upgrade is done, though I don’t think that has fully rolled out.
The reality is that in much (though not all) of the country, it’s cost-effective to replace a near-end-of-life fossil furnace with a heat pump, since it will lower their ongoing heating bill. People do still need to substitute capital for future fuel payments, and that’s a big deal, but it’s a lot better than it was.
The rules let you get the tax credit as a rebate when the upgrade is done, though I don’t think that has fully rolled out.
That would be nice, but I cannot find a source. Heck, I was checking and it turns out these credits are NONREFUNDABLE, so you can only get a max of what you pay in taxes.
The reality is that in much (though not all) of the country, it’s cost-effective to replace a near-end-of-life fossil furnace with a heat pump, since it will lower their ongoing heating bill. People do still need to substitute capital for future fuel payments, and that’s a big deal, but it’s a lot better than it was.
Eh, sadly, it is a bit fuzzier for many of us.
I just added up the last 12 months of gas bills. Came to about $837. But as I said at the start, $43.30 is a fixed charge. So really I only spent $318 on fuel. Based on my summer bills, I use ~$7/month in gas for cooking, drying, & hot water. So the reality is I only paid less than $250 on heating fuel. Granted, it was a warm winter and those costs will likely go up in time, but still.
At my current electric rate of ~$0.07/Kwh, and assuming that the added use will be at least 1,500 Kwh, that means I save, what, $150/year? That may sound good, but that is a painfully slow playback.
And, again, that is if I can even afford ANY increased cost. Whatever I get, I will have to finance it as it is. Most of us don’t have $12,000+ sitting around for HVAC. I want it, and I think heat pumps are great, but not enough is being done to make them the economical choice for those of us in colder cities with a lot of older homes.
I wish it were a high of $34. My “Basic Service Charge” is $43.30, and the gas company has proposed increasing it past $50. While they claim it is for infrastructure upgrades, I am sure keeping people on gas is a huge part of it.
And it isn’t just cooking. Yes, my range is gas, but so is my hot water heater and clothes dryer. And with 100 amp service, and replacing everything with electricity and canceling gas is a tough ask. And at least I have forced air. People with radiant heat are an even tougher issue
Subsidizing heat pumps with a tax credit isn’t enough. We need help making all the needed changes, including service upgrades.
And HVAC companies need to get on board. Technology Connections just released a great video showing (1) that HVAC companies routinely oversize heat pumps because they just grab the capacity of the gas furnace, adding cost and reducing efficiency (as gas furnaces are no less efficient when oversized), and (2) that HVAC companies overprice heat pumps, as they are just air conditioners with a reversing valve that switches which coil is the evaporator and condenser,
My HVAC system here in the midwest is getting long in the tooth and will soon be due for replacement, but with little more than the tax credits, I don’t know that I can afford to go heat pump, regardless of the environmental benefits.
In the US, panel upgrades are subsidized by the Inflation Reduction Act too. It won’t cover the full cost of getting off gas, but it does make it appreciably cheaper.
The Inflation Reduction Act is nice and all, but it stops too far short of fixing the issues.
First and foremost, the subsidies are in the form of refundable tax credits, which means you have to have thousands to front until you get your tax refund the following year.
Second, it isn’t much. You get a max of $600 for a panel upgrade. They say that can cover up to 30% of the cost, but no panel upgrade is only $2,000. Especially in an older home (where you are apt to find 60 and 100-amp service) that might need extensive wiring work to bring it up to the current NEC. It is likely it will only cover 10%-15% of the cost, which again, only comes as a refund months later.
And it is even less because it has to be combined with other energy improvements, which means you are fronting even more money.
Heat pumps are much the same. Only a $2,000 credit on what is likely a $12,000+ project.
And let’s not forget there is also a $600 credit each for stand-alone air conditioning and furnace. So unless a year pump is only $800 more than a new furnace and AC, the tax credit isn’t helping much.
If we want people to pick the green option, the green option needs to be the least expensive, not just in the long term, but thanks to boots theory also has to be cheaper in the short term.
The rules let you get the tax credit as a rebate when the upgrade is done, though I don’t think that has fully rolled out.
The reality is that in much (though not all) of the country, it’s cost-effective to replace a near-end-of-life fossil furnace with a heat pump, since it will lower their ongoing heating bill. People do still need to substitute capital for future fuel payments, and that’s a big deal, but it’s a lot better than it was.
That would be nice, but I cannot find a source. Heck, I was checking and it turns out these credits are NONREFUNDABLE, so you can only get a max of what you pay in taxes.
Eh, sadly, it is a bit fuzzier for many of us.
I just added up the last 12 months of gas bills. Came to about $837. But as I said at the start, $43.30 is a fixed charge. So really I only spent $318 on fuel. Based on my summer bills, I use ~$7/month in gas for cooking, drying, & hot water. So the reality is I only paid less than $250 on heating fuel. Granted, it was a warm winter and those costs will likely go up in time, but still.
At my current electric rate of ~$0.07/Kwh, and assuming that the added use will be at least 1,500 Kwh, that means I save, what, $150/year? That may sound good, but that is a painfully slow playback.
And, again, that is if I can even afford ANY increased cost. Whatever I get, I will have to finance it as it is. Most of us don’t have $12,000+ sitting around for HVAC. I want it, and I think heat pumps are great, but not enough is being done to make them the economical choice for those of us in colder cities with a lot of older homes.