How to Sell Heat Pump Technology

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Heat pumps are having their moment in the HVAC industry.

President Biden recently announced a $63 million investment to accelerate electric heat pump manufacturing across America. And in February, nine states signed a memorandum of understanding saying that heat pumps should make up at least 65% of residential HVAC shipments by 2030 with that percentage going up to 90% by 2040.

This, of course, comes on the heels of back-to-back years where heat pump shipments outpaced those of gas furnaces in the industry, according to numbers provided by AHRI.

There are numerous factors for this trend, including energy efficiency, government incentives, and technology improvement. But HVAC contractors are still the boots on the ground in this electrification mission. How do they both educate and convince homeowners that this is the right decision for them to make?

The good part is the Inflation Reduction Act and the corresponding news attention it has received has homeowners familiar with the heat pump concept. But to say those homeowners are completely educated would be inaccurate.

“Through the IRA and local utility incentives the government has done a good job of saying ‘heat pumps, heat pumps, heat pumps,’” said David Rames, senior product manager for Midea. “They have done a good job of getting that term known. But part of the problem is, everyone remembers their grandpa’s heat pump from 20 years ago, and he cursed it because he froze. We have to let people know that the technology has advanced and things have changed.”

Midea recently completed a survey of 20,000 homeowners and contractors about residential heat pump technology.

The manufacturer asked homeowners if they knew what a heat pump is. The results showed that 80% said they did. But when they asked about heat pump capabilities, that 80% number dropped to 50%, which showed homeowners have heard of heat pumps but don’t truly know what they do.

Luckily, the research went one step further. When asked if they were aware that a heat pump could handle 100% of the heating load at -4°F, that awareness number dropped to 4%. So, 96% of the homeowners had no idea a heat pump could accomplish that. What that shows is a learning curve.

“As a manufacturer, we are taking it upon ourselves to educate,” Rames said. “The education process should start with us. We know our product better than anyone. We will work through our distributors and contractors and then to homeowners so they actually know what they are buying.”

Contractors need to be educated on this technology so they can leverage that information with their customers. The name is not doing it any favors, as some homeowners assume that heat pumps are for heat only and can’t take care of the cooling.

The IDS Ultra Cold Climate Heat Pump from Bosch is anticipated to go on the market in late 2024.

“A lot of times, a homeowner knows they have gas furnaces but are not aware yet of the heat pump technology or what the capability is of a heat pump,” said Mohamad Nasab, senior IoT product manager for Bosch. “This is especially true in cold climates. Our job is to really inform them what heat pump technology is. How it is electric instead of gas. Explain to them that it can both cool and heat your home. There is a misconception out there that heat pumps only do cooling. Or only heat so much.”

Leaning on government rebates at a national, state, and local level is a great way to build enthusiasm for the technology. Homeowners are often unaware of what the transformation looks like and might be under the impression that this technology does not work in cold climates due to the history of the product.

HVAC contractors who are having success in the heat pump market talk up the sustainability aspect of the technology while also focusing in on the monthly energy bills. The first cost is mitigated a bit by the incentives and rebates.

“Bosch believes in this mission and we are happy that regulators are pushing this as well,” Nasab said. “We always listen to our customers. Regulators and customers are on the same path. Provide knowledge to them and help them make the right decision.”

Arch is a company out of California that is attempting to help HVAC contractors do just that. CEO Phil Krinner saw this heat pump trend coming and is quick to point out that in other countries such as Japan or Scandinavia. more than 80% of households have heat pumps.

So Krinner had 15 contractors come out to his house on a sales call and asked for them to give him a quote for not only a gas furnace but also a heat pump system. Most of the bids came in between $20,000 and $40,000.

So, according to Krinner, it then comes down to energy savings, and Krinner said none of the contractors were able to tell him how much the technology would save. He started Arch to create a smart sales platform that analyzes a home and automatically sizes the heat pump system.

“It is really designed to make the sale of a heat pump system really easy for a comfort advisor,” Krinner said. “We have all the specs and all the data sheets of basically virtually all heat pumps. At this point, it’s around 30,000 units of heat pumps. So that’s what’s on the platform right now.”

In the next six months, Krinner is planning to introduce a savings forecast where they will compare the installation of a heat pump to a gas furnace.

Krinner has found that for more affluent households, they are fine with a 9- or 10-year payback, while others are looking more in the 5-year range.

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