There’s also the argument to be made (this has manifested in other countries) that as gas usage wanes and more homes electrify, nat gas costs will increase as the infrastructure costs are spread among fewer and fewer people
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
Quality control by the contractor is soooo important. Formicary corrosion like you described can happen if a contractor doesn't pull a proper vacuum on the system to evacuate moisture before releasing refrigerant. I saw an anecdote where Bill Spohn, who literally owns an HVAC tools company, had this happen with the contractor installing a system in his own house! (https://www.heatpumped.org/p/are-heat-pumps-a-commodity)
I suspect it's especially bad with new builds, as new builds are a race to the bottom and every subcontractor is fighting to get the lowest bid. The best way to make it cheaper is skip steps, and that hurts in the long run. Sorry you ended up in that situation, crummy experiences like this set the industry back. For what it's worth, the same corrosion could happen with a traditional AC system too (it's not just heat pumps). But the difference is, often those refrigerant lines don't get as hidden on interior walls as the ones for ductless mini-splits do.
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)
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%.
"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.
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...
I just wrote a big thread yesterday responding to someone with similar concerns to yours (https://bsky.app/profile/shreyassudhakar.com/post/3m3w3nra2h...). Copying it here if it's helpful to other folks. FWIW, the challenges you are facing seem to be grounded in bad design and application, which happens more than it should and really sucks. We need to move the bar much higher for the contractors installing heat pumps. Here's what I wrote on that thread:
This is why contractor & homeowner education are so so so important to get this energy transition right! I always hate to see reviews like this from folks that have installed a heat pump.
It’s almost always a combo of poorly communicated expectations & installer issues.
A few thoughts…
1) “Air doesn’t come out hot” is a common complaint. It’s by design! You don’t need scalding hot air to have a comfortable space. If you’re targeting a 70 degree setpoint, even 80 degree air will get you there eventually. Heat pumps work best when you let them run - they soak the space with heat.
Your furniture, walls, floors all equalize in temp and radiate heat. A totally different form of comfort than standing in front of a vent that blows hot air at you for 5 minutes and then shuts off!
2) AC doesn’t reduce humidity as well. Unfortunately, this is a classic problem with oversized heat pumps. The key to dehumidification is runtime. A well sized system will run for longer, which will pull the humidity out of the space. If the system is too big, it’ll cycle on and off & not dehumidify.
Your contractor should be do load sizing calculations to determine the size of your heat pump, not using rules of thumb or matching the size of the existing equipment! The very best contractors use performance based load calcs, where they look at your past energy bills to size your new system.
3) Supplemental heat runs a lot - this SUCKS. Electric resistance heat is really expensive to run. It really should be something that comes on for emergencies, if ever. Definitely not regularly.
Many contractors set the temperature where the supplemental heat kicks on way too high. You could be running the heat pump (which is way more efficient) to a much lower temperature, but it’ll switch to expensive aux heat instead. Fortunately, the fix to this is simple - just a thermostat setting.
In other cases, they’ll install a cheaper mild climate heat pump in a truly cold climate. This might save money up front, but it’ll kill you in operating costs when you’re paying 4x as much as you could be in the middle of winter to heat your home. The lowest bid could cost you in the long run!
PS - this homeowner later chimed in that swapping the thermostat helped reduce their electricity bill roughly $30/month! A lot of heat pump issues actually boil down to a poorly configured system. Choosing the right contractor is probably the single most important decision you'll make when you get a heat pump installed.
Hey Paul! Good to see ya on here. I'm in a Facebook group of small HVAC contractors, and recently there was a conversation about who is installing heat pumps vs traditional ACs and furnaces. I was thrilled to see that most were saying that they are moving a lot of their business toward heat pumps. Of course, there were a few that were stuck in their ways and were "gas or die" type people, but it's exciting to see the ship slowly starting to turn. There are more and more heat pump forward contractors coming online every day, and it's great that we can team up with folks like you pushing the hardware forward. There is so much work to deploy these systems, and winning is going to look like all of us working together!
Brendan Ballou’s book “Plunder” is an excellent read about the effects of private equity across industries, if you want to go deeper on the topic. I recently had him on my podcast talking about the effects of PE in HVAC. There are quirks in each realm but the themes are common (I guess in libraries, too).