Do Heat Pumps Save You Money? In California, It Depends on Your Electric Utility

Source: Inside Climate News |  By Twilight Greenway

Last year, when Shreyas Sudhakar started a heat pump installation company in the San Francisco Bay Area, he realized he wouldn’t be able to find new customers by promising to bring down their utility bills. Electric heat pumps are around three times more efficient than gas appliances, and Sudhakar’s clients typically use less energy overall after making the switch. But they also use more electricity. And if they live in a part of California serviced by Pacific Gas & Electric (PG&E) or one of the state’s two other investor-owned utilities (IOUs), the savings they may have come to associate with the technology will likely prove elusive.

Sylvie Ashford at The Utility Reform Network (TURN) said that utilities owned by investors have a history of attempting to make money off behind-the-meter or customer-side investments and padding projects with more capital investments than necessary to increase their profits. She pointed to a recent neighborhood-scale electrification project at Cal State Monterey, where PG&E proposed paying for the retrofits with its capital budget but met resistance and ultimately backed out.