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Chris Badger is an executive advisor at the clean energy nonprofit VEIC
When people think about air conditioning solutions, heat pump water heaters, or HPWH, are rarely at the top of their list. Although water heaters account for a quarter of the average home's natural gas consumption, homeowners rarely consider upgrading in emergency situations where restoring hot water takes priority over more climate-friendly options. This presents a major challenge for decarbonizing homes.
Even in states like California, which has ambitious energy efficiency goals and plans to install six million heat pumps by 2030, almost all water heaters are being replaced with natural gas systems. TECH Clean California wants to change that. But they don't focus on a solution; They test a lot.
TECH Clean California is a market transformation initiative that accelerates the nationwide adoption of space heat pumps and heat pump water heating. The initiative is not just about installing 6 million heat pumps; It's about engaging directly with communities so residents of all backgrounds can take advantage of technology.
One way TECH Clean California engages with communities is through the Quick Start Grant program, administered by the clean energy nonprofit VEIC. These grants fund innovative pilot projects that test approaches to overcoming market barriers to heat pump, HVAC and HPWH adoption. TECH Clean California's pilot approach enables program administrators such as utilities and state energy departments to deploy and scale solutions in California and across the country.
These grants were exactly what a local plumbing company needed to test their unconventional decarbonization solution: gas water heater rentals.
One of the main reasons residents do not switch to HPWWs in emergency scenarios is that preparing a site for an electrical device can take time. Residents must raise funds in a short period of time, make all necessary electrical panel and wiring upgrades, take advantage of government incentives and obtain permits.
Barnett Plumbing addressed this obstacle head-on. Using funding from the Quick Start Grant, they have developed a unique offer for customers to temporarily borrow a gas water heater for free if they commit to purchasing an HPWH. This solution provided homeowners with a quick and easy way to restore hot water heating during hot water upgrades.
The loan program’s conversion rates are a testament to its success. Prior to the loan program, only 1% of customers chose to install HPWHs during emergency replacement. With the introduction of the loan offer, the acceptance rate rose to 17%.
Participants also saw tremendous benefits from this program. One participant reported that when his water heater broke, he called Barnett Plumbing because the company had a good local reputation. When he heard about the loan program, he decided to give it a try and noted, “It was a painless process.”
Without a knowledgeable plumber, gas rental company, and HPWH incentives, many participants would not be able to realize the financial and environmental benefits of HPWH technology. It is too early to tell whether gas rentals represent a scalable program opportunity nationwide, but early success shows the impact of an innovative new solution.
Process changes are not the only innovations that Quick Start Grants are testing. Another pilot project funded by TECH Clean California examined whether new technologies could eliminate the burden of extensive planning and retrofitting electrical work often required in HPWH installations. The New Buildings Institute (NBI) used grants to conduct a field test of the new plug-in 120-volt HPWH technology. If this new technology becomes a viable option for residents, it could open up a world of access as people could use standard outlets to power water heaters. This saves residents time and money on electrical upgrades and rewiring, both of which are important aspects of emergency water heater replacement.
NBI installed plug-in 120V water heaters at 32 locations in various homes in different climate regions of California. After completing this work, NBI determined that the technology was able to meet the needs of lower-demand households of one to three people. Because of these encouraging results, many energy efficiency and incentive programs are now equipped with 120V plug-in water heaters, offering households a more affordable water heating solution.
During NBI's field evaluation, Barnett Plumbing also tested plug-in 120V HPWH models, starting with their own technicians' homes. It was so effective that the team integrated plug-in 120V HPWHs into their offering and increased the adoption rate to over 50%.
The impact of small grants in supporting the testing of new technologies and approaches underscores exactly why programs like TECH Clean California are critical to scaling climate solutions. By diversifying innovation, we can protect ourselves and create scope to adapt to emerging obstacles. If we continue to improve the climate solutions available, we can create a path to scale heat pump HVAC and HPWH technology even faster.
As part of VEIC's work with the TECH Clean California initiative, we have heard from dozens of organizations and companies considering the impact of their Quick Start Grant. They consistently report that one of the biggest challenges in implementing new ideas is the lack of consistent funding with the flexibility to adapt to their specific needs. By supporting TECH Clean California, local groups can take risks and experiment, knowing they have time to learn and adapt their solutions to achieve the best results.
It's hard to say how quickly California will reach its ambitious heat pump goals. But these pilot programs leave little doubt that innovators need a clear runway to succeed.
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