A climate scientist once half-jokingly told me that if billionaires really wanted to save the planet, they would buy everyone a heat pump, the ingenious device that extracts heat from even freezing winter air to heat a house, and then in the summer reversal to act like an air conditioner. A heat pump is much more efficient than even the most efficient gas furnaces. And because heat pumps only need electricity to run, you can plug them into a grid powered by renewable energy and avoid burning fossil fuels altogether.
This makes heat pumps essential to get natural gas out of buildings. According to s study published earlier this year, if every household in the United States had one, emissions from residential buildings would drop by 36 to 64 percent. The country is heading in that direction faster than you might think, as Americans have bought 21 percent more heat pumps than gas furnaces in 2023.
But here’s a thought experiment: What if American billionaires really pooled their money to put a heat pump in every home? Of course, no one expects billionaires to do such a thing. But the rough calculation shows that a large investment in heat pumps would actually pay for itself. The thought experiment also points to the real challenges the U.S. faces when deploying heat pumps on a wide scale without the help of billionaires — and how to overcome those obstacles.
The folks at Rewiring America, an electrification nonprofit, crunched the numbers and found that it would cost $1.2 trillion to put a heat pump in every single-family home — 70 million of them, at $17,000 apiece. From March, the United States had 737 billionaires with a combined net worth of about $5.5 trillion. To pay that $1.2 trillion bill, they would each have to contribute about $1.6 billion.
Amazingly, that $1.2 trillion investment will pay for itself by reducing utility bills and health care costs as well as avoiding the economic damage caused by climate pollution, according to Isabella Peterson, a quantitative research analyst at Rewiring America.
To be clear, this is a necessarily rough calculation. Rewiring America pegged the pre-installation cost of a medium-efficiency heat pump at about $17,000. In reality, each family home has its own heating and cooling needs: Larger homes require larger, more expensive heat pumps, so some installations will work out cheaper than others.
Labor costs to install a heat pump also vary between regions. And different states offer different incentives to switch. For example, last year Maine reached its goal of installing 100,000 heat pumps, two years ahead of schedule, thanks to improved rebates. Other states are following suit. Earlier in the year, nine of them signed an agreement to accelerate the adoption of heat pumps – for example by developing standards for rolling out the devices. If a given state gets more serious about heat pumps, that will affect the $17,000 price. “That number is a national average, but will definitely go down depending on the state if you add incentives or rebates to it,” Peterson said.
Finally, the calculation looked at the installation of heat pumps in 70 million single-family homes in the US, leaving out apartment dwellers. If you live in a studio, you don’t need a huge heat pump connected to a maze of ducts. In that case, a much cheaper ductless heat pump can attach to the wall. So keep in mind that $1.2 trillion will only cover those 70 million homes, not the quarter of American households in multi-family buildings.
All told, the modeling found that the heat pumps would save $448 billion over the devices’ 15-year lifetime simply by preventing the economic damage that comes from burning fossil fuels, or “avoiding carbon emissions.” The energy savings for the customers who reduce their utility bills will be even higher, at $470 billion. And because the heat pumps would run on electricity instead of burning fossil fuels, the mass deployment would avoid $315 billion in health care costs over those 15 years, because fewer people would get sick or die from air pollution. Add up all those benefits and you get $1.2 trillion saved on an initial $1.2 trillion investment.
Because heat pumps are such a powerful solution, both for public health and the climate, heat pumps feature prominently in the Inflation Reduction Act of 2022. The legislation provides thousands of dollars in rebates and tax credits for a household – depending on income – to install a heat pump, and even more than a house’s electrical system needs an upgrade to accommodate the device. Even if a heat pump can save a homeowner in the long run, that $17,000 upfront cost is still high without help from the IRA. “Some states are implementing it, adding their own subsidies on top of it, and they’re now really making it worthwhile for households to switch,” said Gernot Wagner, a climate economist at Columbia Business School.
But even with the current demand – much less, billionaires who suddenly agree to give everyone a heat pump – there are just not enough trained workers to deploy the devices quickly enough, and then service them all afterwards. The country also faces a shortage of electricians needed to decarbonize homes. In California, for example, there is one certified electrician for every 478 households. But when the federal government puts more money into green technology, the jobs follow: The IRA alone has created more than 300,000 clean energy jobs in less than two years according to one estimate.
A new kind of simplified heat pump is also coming on the scene to convert those apartment dwellers not included in Rewiring America’s modeling. A San Francisco-based company called Gradientwhose heat pumps slide over a windowsill and plug into the wall have installed units in buildings under the supervision of the New York City Public Housing Authority. (Gradient’s units cost $3,800, and are currently sold only to businesses such as apartment building owners. But the plan is to eventually open sales to the general public.) “We found that multifamily buildings were an opportunity for us to use heat pumps. to deploy very quickly. , very cost-effective, and has significant improvements in quality of life and public health outcomes,” said Vince Romanin, Gradient’s CEO.
Whether in an apartment in New York City or a single-family home in the Dallas suburbs, a heat pump can operate more efficiently and cleanly than any fossil fuel system. “We need to stop burning natural gas in our homes,” Wagner said, “and the way to do that is to more or less force heat pumps into the system.”
