Larry Heiman is no stranger to making clean energy upgrades to his Dunwoody, Georgia home – from solar panels, to do-it-yourself weatherization upgrades, to driving an electric vehicle. In our Part 1 blog of Larry’s home energy improvement journey, he explained the long-term planning of his clean energy projects, the savings he has already made along the way by using federal tax credits and local utility rebates, and his motivation to reduce his community’s carbon footprint by addressing energy inefficiencies in his own home.

Next up, Larry planned to replace his aging AC with a heat pump HVAC system this May, then make the switch from gas to a heat pump water heater in 2025 in order to disperse the costs and use financial incentives to their fullest potential. In other words, heat pumps galore! And rightfully so: both heat pump HVACs and water heaters are much more energy efficient than their counterparts, so they use less power to produce the same amount of heating and cooling.  

But a not-so-fun surprise shook Larry’s plans while in the midst of his planned HVAC upgrade: his gas water heater sprung a leak, and he had to act fast. 

Follow along for Part 2 of Larry’s home energy journey, this one with a heat pump focus: which systems he found best for his lifestyle, how prepared he was for an emergency water heater installation, what role tax credits and rebates played this go around, and more! 

And don’t worry – it can get a little confusing, but we’ve placed some resources throughout this blog to help you in your own heat pump journey, whether you’re just here to learn, you’re looking to prepare for an emergency replacement, or you’re all ready to take the plunge. 

Planned: Heat Pump HVAC System

Explain the heat pump HVAC system you chose to best fit your situation.

We installed what is called a “dual-fuel heat pump HVAC system” – something we planned to do – in May. I knew our air conditioner was going to die at some point soon, and I didn’t want it to be this summer and be stuck with no air conditioning. Something that people forget is that the heat pump is both your air conditioner and your heater. We’re glad we planned and installed our system during a shoulder season, because in the summer and winter months, contractors tend to be busy responding to more desperate situations due to the harsher temperatures. We got a lot of attention and questions answered from our contractor, and it’s better not to be desperate when making such an investment.  

With an all-electric heat pump HVAC system, you don’t have a gas furnace. But, with the “dual-fuel” system we opted for, you keep your gas furnace for backup heating – you just set a cold temperature at which the system switches over from electric to gas. This dual-fuel system exists because heat pumps use more power when temperatures reach a certain low outside, at which point a dual-fuel heat pump switches from electricity to gas automatically. It can be more efficient if you live in a colder climate.

Our system can efficiently run down to 10 degrees outside, which we only get in Atlanta once every few years. I plan to set our heat pump to switch to gas heating only once the outside temperature reaches maybe 20 degrees, and since that kind of low is not common for us, our dual-fuel system will basically always run on electricity, functioning the same as an all-electric system. It just felt like the right choice for us. 

Our new heat pump is also variable-speed, which means it runs at a lower power level – determined by what the inside and outside temperatures and humidity levels are – for a longer period of time, and it dehumidifies the house constantly. With our old HVAC, the AC would come on full blast and cause the lights in the house to flicker, and it would only stay on for ten minutes, shut off, then come on again ten minutes later. But this variable-speed system can run at different speeds other than full blast, 100%.

We also wanted to zone our home’s heating and cooling but only have one HVAC unit, unlike other zoned homes that have an HVAC unit for each floor. The variable-speed system we chose allows us to zone without ripping up walls to install ductwork for a second HVAC.

For us, this dual-fuel, variable-speed system felt like the best of both worlds. And it so far cools our home in the Atlanta summer with no problem. 

Larry’s new heat pump HVAC system.

This year brought the hottest summer on record. Have you noticed increased comfort, cooling capability, or energy savings with your new heat pump HVAC system?

It’s absolutely more comfortable because it’s simply a more efficient, higher functioning machine than our old air conditioner. It dehumidifies: there are times in the summer when it’s rainy and humid and you don’t really need the air conditioner – you need a dehumidifier to get you to a comfortable temperature, and this has that. Instead of running the air conditioner at a lower temperature than normal to dry out the humidity, wasting energy and money, the system uses dehumidification. 

This new heat pump HVAC system used about 40% less electricity this July than our old system used in August 2022, before we’d made other energy upgrades that could skew the data, such as installing solar panels. 

By looking at power bills from then and now, viewing data in the app used to control the new system, and factoring out power usage from charging our EVs, I can estimate that our HVAC used about 800 kilowatts of energy back in August 2022, compared to the heat pump only using 421 kilowatts this past July. And whatever we’ve saved on energy this summer, we’re saving in money on our power bill. 

Surprise: Heat Pump Water Heater

Had you done research to prepare for replacing your gas water heater with a heat pump water heater for when the time came?

Our gas water heater was 20 years old, much like our HVAC, so I’d planned to replace it with a heat pump water heater maybe next year. But, while down in the basement during our planned heat pump installation in May, we noticed liquid around the gas water heater tank – and when your water heater starts leaking, it basically means it’s unfixable. I thought: okay, this changes my plans a little bit. 

I had researched heat pump water heaters a bit before this surprise. I had listened to a podcast to learn how they work. I knew that they were more efficient than even traditional electric water heaters. I knew that the newest models of heat pump water heaters only have a heat pump function, but I wanted a hybrid – one with a normal, traditional electric resistance element – in case I needed to heat up more water much faster, like when I have extended family visiting from out of the country. 

And, I knew from research beforehand that while heat pump water heaters are more expensive than gas or even traditional electric resistance water heaters, there’s a $2,000 tax credit from the Inflation Reduction Act for heat pumps, and my utility, Georgia Power, offers a $500 rebate. Though, that local rebate could be different for other utilities, so is worth researching beforehand. 

Were there any particular challenges you faced during your emergency heat pump water heater installation?

The thing I was most worried about going into the installation was the electric hookup in the basement – we had a gas water heater before, so we had no electric hookup down there. Often, the costs associated with running those thick wires – the wiring itself plus the work to have an electrician do it – is expensive, and it did end up adding $700 to the final installation cost, to run wiring from the heat pump water heater in the basement to the electrical panel in the garage above. 

Larry’s new heat pump HVAC system.

If someone already has an electric water heater, whether it’s because they lack access to gas or just happen to have an electric water heater, that process is much cheaper and easier. 

How knowledgeable did you find vendors and installers to be of heat pump water heaters? 

The company I used installs all types of water heaters, including heat pump water heaters, so they were knowledgeable about them. They came to take a look and installed it the next day. They sent an electrician out in the morning to run the wiring to the garage, and they had someone come out to install the water heater in the afternoon. 

Because it was an emergency, I didn’t get a chance to shop around, I just luckily found the right one pretty quickly. It is really important to research beforehand so you have the chance to talk to multiple vendors. 

Explain the financial incentives you planned to take advantage of – whether federal tax credits or local utility rebates – to help make your heat pump installation(s) more affordable. 

This is where it got a little tricky. You can get the IRA tax credit of up to $2,000 a year for installing a “heat pump” of any sort in your home, but that means if you use that tax credit on a heat pump HVAC system, you can’t get the credit again for installing a heat pump water heater in the same year. I planned to split the two heat pump projects into separate years and therefore be eligible for the $2,000 tax credit for both. 

That turned out not to matter, because the heat pump HVAC system we wanted turned out to be ineligible for the IRA tax credit this year, despite being more efficient than many of the heat pumps that were eligible. But, we needed the variable-speed system to zone our home, so we stuck with it despite losing the $2,000 tax credit. But, since we didn’t use it on the HVAC, we were then able to use it on the water heater for this year, so it worked out in the end. 

What’s next in your home energy improvement journey? 

Hopefully, I won’t be doing any more large home improvements this year. I hope next year to do either the duct sealing project or the air sealing and insulation project. We’d thought about doing those before the heat pump HVAC installation, for energy efficiency. But, we went ahead and got the heat pump first because our old HVAC needed to go, and our insulation works for us for now and is not terrible. 

As far as space heating goes with the new heat pump HVAC, we’ll see how this winter goes. I’m interested to find out…maybe that will be a “part three.” 

Get Involved in the Clean Energy Generation

As members of the Clean Energy Generation, we’re alive during a time of unprecedented climate funding, support, and technology, and there are all kinds of ways to get involved in the movement. Like Larry, each of us has the power to spark clean energy change in our lives, homes, or communities – but it doesn’t have to be a heat pump!  Spreading the word with your community, making DIY weatherization upgrades to your home, and sharing what motivates you to fight for a safer, cleaner future can inspire others.  

If you’re looking for a place to start, join our next Clean Energy Generation member call, every second Friday of the month. All are welcome! We have the power to make our clean energy future a reality – especially when we rise up together. 

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Demystifying Heat Pump Water Heaters & HVACs: Comfier Home, Lower Bills