5 ms·

I wrote an op-ed in the SF Chronicle a few months ago about electricity costs in California holding back electrification, it's a real challenge: https://www.sfc

by ssuds 1y ago

I wrote an op-ed in the SF Chronicle a few months ago about electricity costs in California holding back electrification, it's a real challenge: https://www.sfchronicle.com/opinion/openforum/article/heat-pump-energy-california-20802968.php https://www.sfchronicle.com/opinion/openforum/article/heat-p... That said, I've found that in most cases (assuming you're on the right electric rate plan, that's a whole other conversation, see https://news.ycombinator.com/item?id=42763695 https://news.ycombinator.com/item?id=42763695), most homeowners in california actually see operating cost parity or a slight decrease, even with super expensive electricity. Silicon Valley Clean Energy recently did a study substantiating this: https://svcleanenergy.org/wp-content/uploads/Bill-Impacts-of-Home-Electrification-Feb-2025.pdf https://svcleanenergy.org/wp-content/uploads/Bill-Impacts-of...

darth_avocado 1y ago
> most homeowners in california actually see operating cost parity or a slight decrease, even with super expensive electricity But you’re missing my first point though, installing a heat pump system comes with a price tag of tens of thousands of dollars. I’m not doing that if my operating cost is at parity or a slight decrease. It’s the same reason people are no longer incentivized to install solar. And to add to that, installing heat pumps also come with additional costs that can range anywhere from a few thousand dollars to replace the main electrical panel to tens of thousands of dollars for a full electrical upgrade if your house is on knob and tube wiring to reduce fire risks.
- morshu9001 11mo ago
  I feel like home solar makes no sense without subsidies, even now with economies of scale. Commercial solar may be a different story.
  - parpfish 11mo ago
    home solar makes sense when you live out in the boonies and there's an unreliable grid that goes down in storms
  - kevin_thibedeau 11mo ago
    If you DIY everything and go with server rack batteries you can keep the costs low enough for a reasonable break even point. Any middleman is going to gouge.
    - next_xibalba 11mo ago
      That is awesome and I wish I had these skills. But it also rules out the vast majority of homeowners.
  - doubleg72 11mo ago
    I just got 10 new 585w panels and inverter for under $5k. A battery is gonna cost me $1500 but at $350 month for electricity, not sure how you can claim it not worth it.
    - morshu9001 11mo ago
      If I can actually get a home solar setup for $6.5K, I'll do it, but that'd mean every solar company is a scam.
  - laurencerowe 11mo ago
    Home solar makes perfect sense in Australia - a market with similar Labour costs to California - because they do it for 1/3rd of the cost. It makes no sense in California when the subsidies alone are higher than the total costs for utility scale solar.
- ssuds 11mo ago
  The first point is very valid too. There was an energy commission study a few years ago, and up front cost is pretty consistently one of the biggest barriers to heat pump adoption. I think there's some nuance to that, though. Even replacing a furnace + AC in California amounts to tens of thousands of dollars! It's not that heat pumps are expensive, it's that construction work in general is expensive. When you frame it in terms of percentage of home cost, it actually feels a lot more reasonable. Robert Bean is a pretty respected voice in HVAC, and shared this article a few years ago (https://web.archive.org/web/20150210053806/http://www.healthyheating.com/How-much-to-budget-for-HVAC-2.htm#.VNmZQi_P1qY https://web.archive.org/web/20150210053806/http://www.health...). The gist is (and this is focused a bit on new construction, so not entirely apples to apples) that you should budget 3-5% of the home's cost for a bare minimum code compliant HVAC installation. When you look at it in that lens, $20k to replace the most complicated mechanical system in a $3M home is less than 1%. I recently read a piece about the "Cost disease in services" that was really enlightening (https://growthecon.com/feed/2017/05/15/What-You-Spend.html https://growthecon.com/feed/2017/05/15/What-You-Spend.html). "Productivity growth in the goods sector raises the wage in that sector, but also raises the output of that sector. So the ratio of wage to output - a measure of the cost of a unit of output - stays constant over time. Higher wages in the goods sector put pressure on wages in the service sector, so wages rise over time there. But (taking the exteme position) productivity is not growing in services, and so output is not growing. The ratio of wages to output in services - a measure of costs - is thus rising over time. This is the “cost disease of services”." While I don't think that's all of it, it is a helpful framing of the economics around these dynamics. There are some companies out there that are truly price gouging. But many are just pricing around the true cost of labor and to run a construction business. I've done a little writing around this topic too: https://www.heatpumped.org/p/pricing-transparency-peeking-behind-curtain-heat-pump-quotes https://www.heatpumped.org/p/pricing-transparency-peeking-be... Ultimately, I would love to see upfront prices & operating costs for heat pumps both fall. But there are a lot of tough realities baked into the cost of these systems. They are still a very logical choice for most homeowners at the time of failure. Especially with rebate & incentive stacks in many places, a heat pump actually works out cheaper than a new furnace + traditional AC for many homeowners.
  - psunavy03 11mo ago
- kragen 11mo ago
  > installing a heat pump system comes with a price tag of tens of thousands of dollars. Mine cost US$250 for the machine, refrigerant included, and another US$80 for the installation. We've had to have it fixed twice due to factory defects. Its heat output is 3400W, nominally consuming 941 watts of electrical power. It's not a great machine, but you're smoking crack.
  - ssuds 11mo ago
    I presume you're not in the US - the numbers you quoted here align with the costs I observed for heat pumps in India (https://www.heatpumped.org/p/you-can-have-it-in-any-color-as-long-as-it-s-black https://www.heatpumped.org/p/you-can-have-it-in-any-color-as...) Skilled labor in the US is expensive! Most of the install costs come from labor, not equipment. Tens of thousands of dollars is pretty typical for a heat pump installation. (For what it's worth, the person you're quoting is referencing a whole home system, either ducted or multi-zone ductless. I think you're referencing a single-zone ductless. Those are cheaper, but still are typically $5-10k installed from a licensed contractor in the states)
    - kragen 11mo ago
      Yes, it's just a mini split. Two guys (skilled, but AFAIK not licensed) installed it in about 6 hours. I'm in Argentina, but I don't think US$1000 an hour is a common labor rate even in the US? Maybe for a famous lawyer or surgeon?
      - ssuds 11mo ago
        Ha. It's not straight labor. So much other overhead to consider - workman's comp insurance, back office staff, technician utilization, vehicle repair and maintenance, etc... There are lots of other costs that get baked in when you're looking at a licensed company compared to a guy in a truck
        kragen 11mo ago
        Okay but US$5k for half a day of work? It would have been faster if the guy had had his own ladder instead of us moving my desk so he could stand on it to work. (He's bought one since then.)
pureagave 1y ago
Electricity prices in San Francisco are so bad that it makes gasoline a reasonable alternative to an electric car.
- deleted 11mo ago
  [deleted]

by ssuds 1y ago

darth_avocado 1y ago

> most homeowners in california actually see operating cost parity or a slight decrease, even with super expensive electricity But you’re missing my first point though, installing a heat pump system comes with a price tag of tens of thousands of dollars. I’m not doing that if my operating cost is at parity or a slight decrease. It’s the same reason people are no longer incentivized to install solar. And to add to that, installing heat pumps also come with additional costs that can range anywhere from a few thousand dollars to replace the main electrical panel to tens of thousands of dollars for a full electrical upgrade if your house is on knob and tube wiring to reduce fire risks.

morshu9001 11mo ago
I feel like home solar makes no sense without subsidies, even now with economies of scale. Commercial solar may be a different story.
- parpfish 11mo ago
  home solar makes sense when you live out in the boonies and there's an unreliable grid that goes down in storms
- kevin_thibedeau 11mo ago
  If you DIY everything and go with server rack batteries you can keep the costs low enough for a reasonable break even point. Any middleman is going to gouge.
  - next_xibalba 11mo ago
    That is awesome and I wish I had these skills. But it also rules out the vast majority of homeowners.
- doubleg72 11mo ago
  I just got 10 new 585w panels and inverter for under $5k. A battery is gonna cost me $1500 but at $350 month for electricity, not sure how you can claim it not worth it.
  - morshu9001 11mo ago
    If I can actually get a home solar setup for $6.5K, I'll do it, but that'd mean every solar company is a scam.
- laurencerowe 11mo ago
  Home solar makes perfect sense in Australia - a market with similar Labour costs to California - because they do it for 1/3rd of the cost. It makes no sense in California when the subsidies alone are higher than the total costs for utility scale solar.
ssuds 11mo ago
The first point is very valid too. There was an energy commission study a few years ago, and up front cost is pretty consistently one of the biggest barriers to heat pump adoption. I think there's some nuance to that, though. Even replacing a furnace + AC in California amounts to tens of thousands of dollars! It's not that heat pumps are expensive, it's that construction work in general is expensive. When you frame it in terms of percentage of home cost, it actually feels a lot more reasonable. Robert Bean is a pretty respected voice in HVAC, and shared this article a few years ago (https://web.archive.org/web/20150210053806/http://www.healthyheating.com/How-much-to-budget-for-HVAC-2.htm#.VNmZQi_P1qY https://web.archive.org/web/20150210053806/http://www.health...). The gist is (and this is focused a bit on new construction, so not entirely apples to apples) that you should budget 3-5% of the home's cost for a bare minimum code compliant HVAC installation. When you look at it in that lens, $20k to replace the most complicated mechanical system in a $3M home is less than 1%. I recently read a piece about the "Cost disease in services" that was really enlightening (https://growthecon.com/feed/2017/05/15/What-You-Spend.html https://growthecon.com/feed/2017/05/15/What-You-Spend.html). "Productivity growth in the goods sector raises the wage in that sector, but also raises the output of that sector. So the ratio of wage to output - a measure of the cost of a unit of output - stays constant over time. Higher wages in the goods sector put pressure on wages in the service sector, so wages rise over time there. But (taking the exteme position) productivity is not growing in services, and so output is not growing. The ratio of wages to output in services - a measure of costs - is thus rising over time. This is the “cost disease of services”." While I don't think that's all of it, it is a helpful framing of the economics around these dynamics. There are some companies out there that are truly price gouging. But many are just pricing around the true cost of labor and to run a construction business. I've done a little writing around this topic too: https://www.heatpumped.org/p/pricing-transparency-peeking-behind-curtain-heat-pump-quotes https://www.heatpumped.org/p/pricing-transparency-peeking-be... Ultimately, I would love to see upfront prices & operating costs for heat pumps both fall. But there are a lot of tough realities baked into the cost of these systems. They are still a very logical choice for most homeowners at the time of failure. Especially with rebate & incentive stacks in many places, a heat pump actually works out cheaper than a new furnace + traditional AC for many homeowners.
- psunavy03 11mo ago
kragen 11mo ago
> installing a heat pump system comes with a price tag of tens of thousands of dollars. Mine cost US$250 for the machine, refrigerant included, and another US$80 for the installation. We've had to have it fixed twice due to factory defects. Its heat output is 3400W, nominally consuming 941 watts of electrical power. It's not a great machine, but you're smoking crack.
- ssuds 11mo ago
  I presume you're not in the US - the numbers you quoted here align with the costs I observed for heat pumps in India (https://www.heatpumped.org/p/you-can-have-it-in-any-color-as-long-as-it-s-black https://www.heatpumped.org/p/you-can-have-it-in-any-color-as...) Skilled labor in the US is expensive! Most of the install costs come from labor, not equipment. Tens of thousands of dollars is pretty typical for a heat pump installation. (For what it's worth, the person you're quoting is referencing a whole home system, either ducted or multi-zone ductless. I think you're referencing a single-zone ductless. Those are cheaper, but still are typically $5-10k installed from a licensed contractor in the states)
  - kragen 11mo ago
    Yes, it's just a mini split. Two guys (skilled, but AFAIK not licensed) installed it in about 6 hours. I'm in Argentina, but I don't think US$1000 an hour is a common labor rate even in the US? Maybe for a famous lawyer or surgeon?
    - ssuds 11mo ago
      Ha. It's not straight labor. So much other overhead to consider - workman's comp insurance, back office staff, technician utilization, vehicle repair and maintenance, etc... There are lots of other costs that get baked in when you're looking at a licensed company compared to a guy in a truck
      - kragen 11mo ago
        Okay but US$5k for half a day of work? It would have been faster if the guy had had his own ladder instead of us moving my desk so he could stand on it to work. (He's bought one since then.)

pureagave 1y ago

Electricity prices in San Francisco are so bad that it makes gasoline a reasonable alternative to an electric car.

deleted 11mo ago
[deleted]