Heat Pumps Reduce Smog in Southern California. Available Incentives Mean They Can Also Cost Less Than Gas Equipment.

RMI's briefing analyzes the cost-effectiveness of transitioning from gas-burning heating and water heating equipment to electric heat pumps in Southern California. The analysis finds that current and upcoming state, local, and utility incentives can make heat pumps cheaper than conventional gas equipment, even without federal funding, though fragmented application processes and limited funding levels hinder widespread adoption.

• Gas-burning equipment in residential and commercial buildings is a significant source of air pollution in Southern California, producing seven times more nitrogen oxides (NOx) than the region's power plants. This NOx contributes to ground-level ozone (smog) and fine particulate matter (PM2.5), which are linked to heart attacks, dementia, asthma, and premature deaths.
• For low-income households in Southern California, heat pumps can be more affordable than traditional gas equipment through state and local incentives alone. Without federal rebates, low-income households can save between $2,400 and $4,200 when choosing an air-source heat pump over a furnace and AC system, and $2,125 to $2,925 when switching to heat pump water heaters.
• The inclusion of federal home energy rebates from the Inflation Reduction Act significantly increases potential savings. Low-income households could save over $10,000 for air-source heat pumps and nearly $3,000 for heat pump water heaters, while middle-income households can save between $7,200 and $9,000 for air-source heat pumps.
• Despite the availability of incentives, adoption is hindered by a fragmented application system and insufficient funding. Some households may need to apply to as many as six different programs to maximize savings. Additionally, programs like TECH Clean California and Riverside Public Utilities have experienced pauses in HVAC incentives due to high demand.
• RMI recommends several policy improvements to increase heat pump accessibility: streamlining applications into a single portal, enhancing multi-lingual technical assistance, aligning equipment performance standards, and reforming electric and gas rates to ensure heat pump customers are not overcharged.

APA

RMI (2025). Heat Pumps Reduce Smog in Southern California. Available Incentives Mean They Can Also Cost Less Than Gas Equipment. https://rmi.org/resources/heat-pumps-reduce-smog-in-southern-california-available-incentives-mean-they-can-also-cost-less-than-gas-equipment/

Chicago

RMI. Heat Pumps Reduce Smog in Southern California. Available Incentives Mean They Can Also Cost Less Than Gas Equipment. 2025. https://rmi.org/resources/heat-pumps-reduce-smog-in-southern-california-available-incentives-mean-they-can-also-cost-less-than-gas-equipment/.

Wikipedia

{{cite report |author=RMI |title=Heat Pumps Reduce Smog in Southern California. Available Incentives Mean They Can Also Cost Less Than Gas Equipment. |date=21 February 2025 |url=https://rmi.org/resources/heat-pumps-reduce-smog-in-southern-california-available-incentives-mean-they-can-also-cost-less-than-gas-equipment/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rmi2025heat, author = {{RMI}}, title = {{Heat Pumps Reduce Smog in Southern California. Available Incentives Mean They Can Also Cost Less Than Gas Equipment.}}, institution = {RMI}, year = {2025}, month = feb, url = {https://rmi.org/resources/heat-pumps-reduce-smog-in-southern-california-available-incentives-mean-they-can-also-cost-less-than-gas-equipment/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }