The growing trend toward electrified heating and cooling

As the world continues to search for solutions to reduce and eliminate carbon emissions, the plumbing industry suddenly finds itself at the forefront of change and an integral part of creating a greener, more sustainable future.

To curb reliance on fossil fuels, policymakers at both the federal and state levels have introduced and, in some instances, recently passed legislation phasing out the use of natural gas for heating and cooling systems specifically. These policies range from strict regulations to outright bans. While New York became the first state to pass legislation banning the use of natural gas in some new buildings beginning in 2025, similar legislation exists in various forms all across the country.

While these bans aim to accelerate the transition to cleaner energy sources, they present both challenges and opportunities for plumbing professionals. They can increase the adoption of electrified solutions like heat pumps and are often supported by incentives. However, they can also mean new requirements, costs and other considerations when scoping new projects.

For plumbing contractors, it’s essential to stay informed about natural gas bans and leverage available incentives to maximize the benefits for your clients and projects.

All about heat pumps

The Department of Energy and the Environmental Protection Agency are actively working to increase the use of smart heating technologies. Additionally, Energy Star is in the process of creating draft language that would remove air conditioning-only products and gas furnaces from the Energy Star ratings. If implemented, this language could mean that even current high-efficiency technology in these areas would not qualify for consumer rebates and incentives.

Going forward, it is likely that electric heating and cooling solutions will be required. That’s where heat pumps come in.

Heat pumps are highly energy-efficient systems that operate by transferring heat rather than generating it, making them much more efficient than traditional furnaces. They extract heat from the surrounding environment, either from the air (air-source heat pumps) or ground (ground-source heat pumps).

It's estimated that the widespread usage of heat pumps would reduce reliance on fossil fuel-based heating and can be powered by renewable energy sources, contributing to a significant reduction in greenhouse gas emissions—including a potential cut of CO2 emissions by half a gigaton by the end of the decade.

Heat pumps not only provide heating during colder months but also offer cooling during warmer seasons. This dual functionality eliminates the need for separate heating and cooling systems, streamlining installation and maintenance processes for contractors. Heat pumps also excel at maintaining consistent indoor temperatures, avoiding the temperature fluctuations experienced with conventional heating methods.

Incentives, incentives, incentives!

The most common concern associated with the transition away from natural gas is the potential increase in upfront costs for homeowners. Although electric heat pumps may in some cases require higher initial investments compared to traditional natural gas systems, it is essential to consider the long-term benefits. Between reduced energy bills, rebates and incentives, and the positive environmental impact, the gains often outweigh the initial costs.

The federal government is already offering rebates and incentives for specific types of electric-based technology, including heat pumps. For example, the Inflation Reduction Act (IRA) prioritizes electric products like heat pumps. The IRA allows states to offer up to $8,000 in tax rebates for electrified-products (based on income) and consumers may also qualify for Federal Tax Credits of up to $2,000.

There are a few other federal incentives that contractors can leverage to benefit their customers, including:

• Weatherization Assistance Program (WAP): The U.S. Department of Energy's WAP provides funds to low-income households for energy efficiency upgrades. Home builders can collaborate with local WAP agencies to incorporate energy-efficient heating technologies into affordable housing projects, ensuring compliance with program guidelines;
• Department of Agriculture Rural Energy for America Program (REAP): REAP provides grants and loans to rural homeowners and businesses for renewable energy installations; and
• The High-Efficiency Electric Home Rebate Program (HEEHR) also offers considerable Federal incentives and rebates for upgrades to electrical wiring and panels for qualified electrification projects.

In addition to federal programs, many states have implemented their own incentives to promote sustainable heating technologies. These state-level incentives vary widely, making it important to understand the offerings specific to your project's location so you can guide clients through the application process to access these financial resources.

While these types of incentives make heat pumps much more appealing to cost-conscious homeowners, they won’t detract from your bottom line as a contractor — creating a best-of-both-worlds scenario for contractors and their clients alike.

Working toward an electrified future

As more appliances in the home depend on electricity for power, it will become increasingly important to ensure there is proper electrical power available in a home’s main service panel. Older homes may only have 100 amp service, while newer homes are typically equipped with 200 amp service. If there is not sufficient electrical service available to the main electrical panel, it could limit how many electrical appliances the home can power or require expensive electrical upgrades when new electrical appliances are installed.

The federal government is already offering rebates and incentives for specific types of electric-based technology, including heat pumps. For example, the Inflation Reduction Act (IRA) prioritizes electric products like heat pumps. The IRA allows states to offer up to $8,000 in tax rebates for electrified-products (based on income) and consumers may also qualify for Federal Tax Credits of up to $2,000.

Additionally, as the transition to heat pumps happens, the size of the circuit breaker for the HVAC appliance may become much more important. Particularly in southern and western states with warmer climates, switching from cooling-only equipment to heat pumps may require upgrading the wire gage, circuit breaker and/or other wiring. Contractors need to have a clear understanding of the electrical service available in the home when they are quoting a job because upgrading the electrical service box may mean significantly increased costs. It’s crucial that plumbing professionals familiarize themselves with Federal and local incentives and rebates offered for electrical upgrades done as part of a high-efficiency electric appliance upgrades, as this may save homeowners thousands of dollars.

To maximize incentives and ensure compliance with regulations, contractors should take the following steps:

• Stay informed: Be aware of local and regional regulations regarding natural gas bans, and research the specific requirements for compliance;
• Train and certify: Invest in training and certification programs to equip yourself or your team with the necessary skills and expertise to install, maintain, and service heat pump systems effectively. In some states, this may include getting licensed to conduct electrical work or establishing partnerships with local electricians;
• Collaborate with suppliers: Engage with suppliers specializing in heat pump technology now and hit the ground running. Establish partnerships to ensure a reliable supply chain for high-quality equipment, parts, and components necessary for installation and maintenance;
• Educate your customers: Educate homeowners about the benefits of heat pumps as a replacement for natural gas heating systems;
• Practice efficient design: Optimize the design and layout of new homes to accommodate heat pumps. Ensure adequate space allocation and ventilation for the installation of the indoor and outdoor components of the system;
• Collaborate with experts: Engage with renewable energy consultants, HVAC professionals, and energy efficiency experts to gain insights into the latest technologies and incentives; and
• Document and report: Maintain accurate documentation of the heating systems installed in each project, including specifications and certifications. This documentation will be vital when applying for incentives and ensuring compliance with regulations.

As a plumbing professional, understanding natural gas bans and leveraging federal and state incentives for smart heating technologies can significantly benefit your clients and contribute to a sustainable future. By embracing these opportunities, you can position yourself as a leader in sustainable construction practices and provide your clients with efficient and environmentally friendly homes.