[darth_avocado]

I’m in California, I have two heat pumps installed. I can sum up the problems as follows:

1. They are EXPENSIVE. The equipment itself isn’t that expensive tbh but installation is pretty expensive. The government subsidies have made sure that the contractors jack up their own prices by as much.

2. I end up paying more in utilities because electricity is very expensive and heat pumps aren’t nearly as good at heating in the winters as old fashioned gas furnaces when it comes to the cost.

I made the massive investment because I could and I eventually want my house to run completely on rooftop solar as a way to reduce my carbon footprint. But the cost is nowhere near mass market adoption price range.

[sitharus]

I was shocked when I saw the price of heat pump installation in the US, even with an existing ducted system. There’s no reason a reversible heat pump system should be significantly more expensive than a cooling only one.

[yojo]

It’s bonkers. I bought a pre-charged ductless mini split to DIY. Took my dad and I about four hours to do the install. So call it 8 hours of semi-skilled labor.

The unit was $1350, I added a line set cover, pad and feet for another $200, and needed about $200 in electrical equipment - it was a long wire run and code requires installing a disconnect box. The only special tool was a hole saw bit for running the coolant lines.

So maybe $1850 all-in, plus 8 hours labor. I’m sure a pro could do it in half the time. But the low end for a pro install is $5k.

I get that they have insurance and warranty or whatever, but that’s a damn juicy margin.

[raddan]

I did the same thing and spent slightly less than you did because I did not need the extra linesets, etc. I was also able to install this in a location that few professionals would have tolerated (interior wall). My thinking was that even if the unit died, I would have saved so much on installation that it wouldn’t even matter. It’s a great unit too. Installation costs are kind of a racket.

[ghtbircshotbe]

It's not that different for other contractors either. That's part of the reason housing prices are so high. As unbelievable as it is, someone must be willing to pay the high prices. Economic inequality is the basic reason for the housing shortage.

[0xDEAFBEAD]

If prices are high, that typically means demand exceeds supply. What is preventing supply from expanding to meet demand? Elsewhere in this thread someone mentioned regulation.

Suppose we wave a magic wand and everyone in society becomes equally wealthy. That doesn't solve the fundamental problem of a contractor shortage. It just means we no longer have prices as a method for matching contractors with jobs to the same degree as previously. Without prices being bid up as high, there is less incentive to go into contracting, meaning that the shortage is liable to persist for longer.

[sitharus]

In New Zealand a pretty basic 3.5kW (the internet told me that’s about a “ton”) mini split will cost about NZ$2000 including basic installation - that’s with the units on the same wall, ground floor, including the line set cover and running a new circuit if you need one. A 9.7kW model is only $3500. Again New Zealand dollars so halve that for US. Also that includes a 10 year warranty.

I know our labour costs are going to be lower, but not that much lower. Glassdoor indicates that salary for a US HVAC installer is about US$60k, and in NZ a local equivalent says NZ$60k, so I’d expect the numbers to be the same.

Oh and that price includes all taxes and excludes rebates (which most of us don’t qualify for anyway)

[yojo]

I’ve heard similar prices for Europe and elsewhere in the world. The US pricing seems to be uniquely out of step with everywhere else.

[0xDEAFBEAD]

Now that you've got some experience, maybe you should start a heat pump installation company :-)

[mothballed]

Lol it's protected by the licensing mafia. You'll have to change $5 capacitors for $1000 a pop for 4 years first while being paid peanuts to do it.

Hardly anyone wants to do that so we're stuck with the status quo. You're basically stuck either paying through the nose or finding a family/friend with the equipment and expertise or doing it yourself.

[yojo]

My time is still worth more slinging bits. But if that well runs dry, I’d consider it.

[EngCanMan]

Umm, I encourage you to do that math a little closer. A contractor would have to;

Come to your house to quote, and only land 1/4 quotes maybe.

Schedule the workers

Order the equipment.

Get an electrical permit.

Pay for the truck and all the tools.

Insurance for the company and trucks.

Advertising costs

Warranty and callbacks

I can assure you that this is not the get rich quick scheme you may think it is.

[relaxing]

Look up private equity buying up HVAC firms.

It is in fact a get rich scheme.

[aradox66]

I thought private equity was all about liquidating nearly bankrupt businesses

[relaxing]

That too, but in this case they’ve got a formula for enshitifying local firms.

[thelastgallon]

I don't know why you're being downvoted (it shows as slightly greyed out). This is true. I had a roommate who is a HVAC salesman. Very smooth talked. The 'HVAC' company offers free HVAC maintenance. They techs go in, do some stuff and they point out some problems. Sales guy goes in, smooth talks his way to 5K - 70K bill to most people. Of course, when something goes out and people don't have a choice (like in peak summer or winter), they make out like bandits.

Most of the local firms (Dick's local $town hvac/plumbing/electrical) are owned by massive PE firms (Saudi + other billionaires) which pretty much own the entire businesses all over US. They keep the local name to make people believe they are giving business to a local guy.

Another roommate of mine was a plumber.

The guys who do the actual work get paid close to nothing ($20 - $22/hour) and live on day to day basis.

Plumbing company quoted me $3000 to replace a broken water heater in the middle of peak winter. I paid my guy $300 for labor (heaters are $500 - $1000 from lowes depending on how long of warranty you want) and he was super happy for making a lot of money.

[SoftTalker]

The good local contractors have all the work they can handle on commercial accounts. Residential is an annoyance. That leaves the very small fish (if you can find them) and the PE-owned scam companies.

[yojo]

The equipment is actually a lot cheaper if you’re a pro - the DIY pre-charged line-set adds about $500 over an equivalent unit. Pulling a vacuum and adding coolant is not hard, just requires specialized tools that still aren’t that expensive.

I mentioned warranty and insurance.

You don’t need to “schedule workers” if you are owner operating. Maybe you want a (non-skilled) helper to speed up the install, but you absolutely could install solo. That said, you will need a licensed electrician to run the circuit.

In my metro, hvac contractors can get ten-packs of permits for mini-split installs, and at most one out of ten is inspected. It’s a rubber stamp if you’re a pro, and the individual permit is maybe $50.

And that $5k I mentioned is the low bid, which you’ll only see if you know how to find contractors who aren’t private equity fronts. These guys are not advertising, but they stay busy by having the best price. There are shops that will happily charge you double for the same work.

I never said it’s a get rich quick scheme. It is just highly compensated for owners without requiring the level of expertise of something like a plumber or electrician. I’m curious what is happening in the market to support these margins.

[mothballed]

Devils advocate here, it cost me ~$1500 in equipment to buy the vacuum pump, vacuum gauge, nitrogen air tank to flush the lines and pressure test, pressure manifold set and gauge, air lines, good flaring tool, copper bending tool, schrader valve pulling tools, various air tools, and a book on mini split installations.

Then it took me 2 days between pouring concrete pad for the heat pump, installing the heat pump and bolting it in, running the copper lines, drilling the exit hole, running the drain piping, learning how to use all the tools, running the electric and control cables and installing a new breaker and 220 subpanel, pressure testing, vacuum testing, flaring, releasing vacuum and all the stuff you have to do. I also had to spend several nights watching youtube and get a EPA 608 certification for handling refrigant which took another day.

Wouldn't have been worth it for a single unit, but was worth it for installing 3, and now I can do additional units for basically $0 overhead and of course no one would even have to know if I installed it and now I can order unlimited amount of refrigerants to my doorstep.

Having plumbed my entire house, and done my entire house electrical system, I would say the level of expertise to install a mini split is higher than either alone. You have to do electrical, plumbing, refrigerant handling, pressurized equipment handling, be liable for massive federal/EPA fines if you do something wrong, and on top of that I had to do masonry work.

[brianwawok]

There is a 0.00000% chance of getting into EPA trouble installing one minisplit. You got crews dumping 5 a day into a bucket of water all over and no one will answer a report

[rootusrootus]

It's going to vary by installer, of course, but when I looked into getting a heat pump it was about $1500 more than just replacing the A/C condenser and evaporator with a like-for-like unit. Keeping the existing natural gas furnace as backup. This was in the PNW, about three years ago. $4500 for A/C, $6000 to replace it with a heat pump instead.

[smileysteve]

Re #2.

Tuning a heat pump vs resistive heat is a much tougher game than it should be. In a moderate climate, I use my ecobee to ensure aux heat doesn't come on until it's below freezing, and it should only come on if something has gone wrong at that point too. Unfortunately, many thermostats by default will use resistive heat in relatively normal scenarios, of worse, when you've programmed home and away times intended for efficiency but disparate enough to activate resistive heat.

[relaxing]

In a moderate climate you should have no need for resistive heat. Why isn’t running the heat pump alone enough?

[maxerickson]

They are saying that badly configured controls often run the resistive heat when it isn't needed.

[ssuds]

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-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), 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...

[pureagave]

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

[darth_avocado]

> 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]

I feel like home solar makes no sense without subsidies, even now with economies of scale. Commercial solar may be a different story.

[kevin_thibedeau]

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]

That is awesome and I wish I had these skills. But it also rules out the vast majority of homeowners.

[doubleg72]

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]

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]

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.

[parpfish]

home solar makes sense when you live out in the boonies and there's an unreliable grid that goes down in storms

[kragen]

> 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]

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...)

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]

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]

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

[nwallin]

In Southern California it costs $120 just for a guy to come out and look at your HVAC. Not fix anything--not install anything--just to look at it and give you an estimate for how much the repair is going to take. I went to the website for a local installer and they give a ballpark of $13,000-$25,000 for a heat pump installation.

I don't know why it's so expensive here. It shouldn't be, it makes no sense. But it is.

[ssuds]

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.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).

"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-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]

. . . and how many people do you assume own $3M homes? Good grief.

[ssuds]

The median home in the SF Bay Area is $2M, so given that this thread is focused on California I think it’s a reasonable number to anchor on… https://www.sfgate.com/realestate/article/bay-area-metro-are...

Even if we changed the number to $1M, the overall point remains the same

[owenthejumper]

Good article, but I must point out that in no way will private equity reduce prices. It will be the exact opposite

[vladgur]

That is precisely why im not planning to install a heatpump until i have rooftop solar.

Here in Bay Area my gas furnace is generally off late March through late october and while gas costs have gone up over the years, electricity easily goes up 10% year over year. We are currently in $0.43 per kwh territory OFF-PEAK. This is nearly 3 times the average rate in the United States.

I wont be investing $$$ in heatpumps until i spend $$$$ on solar panels and that wont happen till i replace my roof in a few years.

PS. this is why buying a hybrid a few years ago instead of buying an electric was a good call. Our gas prices stayed pretty much the same, while our electricity is up 30% since that time.

[surajrmal]

The same problems apply to evs and yet people seem to buy those too. Maybe most folks end up getting them second hand which is not an option for heat pump.

Solar + heat pump will take me 10+ years to come out financially ahead (if not longer) but if you're invested for the long term it does come out ahead (even factoring in opportunity cost). The comfort level is also dramatically better in my house due to more even temperature, so I would argue in many situations it can be worth a premium. I thought for sure I was going to need ductless per room to get this level of comfort but it turned out to not be true. If you didn't have ac before, it's also nice to have the option to use it on hot days.

[thevillagechief]

I got a heat pump with a backup gas furnace this year. A heat pump just felt like a no-brainer of I was going to get an AC anyway. But gas in PA tends to be cheaper, so the system will use gas at a certain point. The problem is I couldn't have picked a whose installer if I was throwing darts at the wall, but that's another story.