HomeMy WebLinkAbout2/1/2022 Item 7a, Severance
Delgado, Adriana
From:G.Bruce Severance <zeroenergyexperts@gmail.com>
Sent:Tuesday, February 1,
To:E-mail Council Website
Subject:Comments by Bruce Severance
Attachments:CommentsToCityOfSLO on ElectrificationPolicy2-22.pdf; HPvs.Gas-ACsystWScosts-
NRDCcommentToCEC11-20.pdf
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NRDC Study on Gas Vs. HP Equipment Costs
and Comments by Bruce Severance
1
Comments on the Cost-effectiveness of
The SLO City Clean Energy Choice for New Buildings Program
Submitted by Bruce Severance, Zero Energy Experts Consultants
Introduction
I greatly appreciate the City of San Luis forward thinking and holistic approach to building electrification
and climate mitigation. As a fiscal conservative I have always taken the position that climate mitigations
should always be exercised first where there are high societal and consumer benefits. My research work
for a major US HVAC manufacturer has been focused on removing market barriers for both air source
heat pumps (space heating/cooling) as well as heat pump hot water heaters. I have been a certified
energy analyst and general contractor working with hands-on experience in building electrification, both
new construction and retrofits, for over ten years, and a policy analyst and cost trade-off researcher for
over five. My recent publications to the CEC on advanced heat pump integration practices that reduce
cost and increase return on investment and energy savings for the consumer have become the subject
of investigation into additional compliance options being offered in the 2025 California Energy Code,
including a thorough reconsideration of cost-effectiveness metrics currently adopted into the Energy
Code. Prior to this cost-driven market transformation research, I have had a consulting business advising
architects and mechanical system designers on the most cost-effective means to go zero-energy or
near zero-energy on new and remodel projects.
New Cost Data Reveals Cause of Inflated Electrification Estimates Published by the NAHB
A recent report with confidential sources published by the Natural Resources Defense Council (NRDC) on
the CEC comment docket reveals that among the largest HVAC manufacturers who fabricate both
central ducted heat pumps and conventional gas furnaces plus AC, heat pumps are 15% to 30% cheaper
than gas+AC in head to head comparisons of minimum compliant equipment of the same manufacturer
and same size. (See summary cost data also submitted with these comments). Because National
Association of Home Builders (NAHB, represents new-home production builders only) has published
findings based on HVAC contractor bids that reflect higher installed costs for HPs, the disconnect can
only be explained by immature learning curves. In other words, the average HVAC contractor is still so
unfamiliar with heat pump technology that they are charging between 20% to 40% more than pricing for
gas installs, soley based on installation experience and nervousness about consumer call backs, which
the data show are non-existent. Their fears are unfounded, and it is only a matter of time before
installed contract pricing is 20% below gas+AC installed costs.
What is important to glean from this information is that in the current non-competitive bidding
environment the cost of heat pump hot water heaters (HPWHs) and ASHPs (space heat pumps) is at
least 20%-30% higher due to artificial and transient market variables. For this reason, electrification
reach codes implemented in conjunction with advanced contractor training programs and high-ROI
installation practices is the best method to both achievereduced install costs through more advanced
learning curves and economies of scale on the contractor installation side of the equation. Equipment
costs are in fact less likely to yield such economy of scale cost benefits due to the current supply chain
issues.
IT is also important to note that cost reduction is highest in new construction and the opportunities for
maximizing ROI are highest when a range of simple HVAC optimization strategies are simultaneously
implemented: 1) deeply burying ducts in blown attic insulation (R-60 blown fiberglass, not cellulose and
not fiberglass batts; 2) What is called new-school radial duct design developed and tested by CEC
researcher over the last two decades and found to greatly reduce costs while increasing efficiency; 3)
short duct design which locates supply grills 15-18 feet from outside walls to yield both better comfort
and mixing with lower cost and higher efficiency; and new filter configuration and sizing methods that
meet cost parity, but greatly increase covid mitigating, high filter performance (high-MERV 13-16)
without reducing fan efficiency.
Typical or average HVAC contractors are generally not familiar with these new school methods, so it
they are not required, consumers will pay more for either gas or electric heat pump systems that could
otherwise provide higher comfort and efficiency for significantly lower cost than conventional
installation practices. In short, I am advocating for prescribing electrification across the board but doing
so in a way that maximizes consumer benefits. Protecting consumer interests and avoiding the
possibility of poor quality installs that may meet current code requirements but do not optimize the
installation and systems integration, may yield some unhappy customers. Fortunately, the Central Coast
Community Energy has education grants that can supplement contractor training already initiated by
3C-REN to help bring about more consistent quality on the installation side.
Three different national studies conducted by ACEEE, NIST, and NCI all point to the fact that furnace or
heat pump replacements performed without permits and HERS performance testing only yield an
installed efficiency of between 56% and 58% (high correlation between studies) of the rated or lab-
tested efficiency of the site installed furnace or ASHP equipment. There are several quality parameters
that the average HVAC installers tend to ignore, first and foremost duct leakage and then refrigerant
charge verification. In our own county compliance with permits and HERS equipment and duct testing is
less than 5% of the total furnace and AC replacements. To implement this policy in a manner that truly
protects the consumer, we must also address non-compliance at the permit and building department
level and assure the public the quality HP installation and beneficial electrification they deserve.
I am happy to lend my research and field expertise to the council and city agencies in support of the
proposed electrification programs.
Sincerely,
Bruce Severance
805-268-4444
zeroenergyexperts@gmail.com
DOCKETED
Docket Number:
19-BSTD-03
Project Title:
2022 Energy Code Pre-Rulemaking
TN #:
235580
NRDC Comments - Price comparison of heat pumps vs gas
Document Title:
furnace and AC systems
Description:
N/A
Filer:
System
Organization:
NRDC
Submitter Role:
Public
Submission Date:
11/12/2020 4:00:50 PM
Docketed Date:
11/12/2020
Comment Received From: NRDC
Submitted On: 11/12/2020
Docket Number: 19-BSTD-03
Price comparison of heat pumps vs gas furnace and AC systems
Additional submitted attachment is included below.
Memorandum
To: Commissioner McAllister and CEC Staff
From: Pierre Delforge, Natural Resources Defense Council
Date: November 12, 2020
Subject: Electric vs. gas space heating cost comparison
Summary
The following memo summarizes market data showing that residential heat pump space conditioning
equipment costs are lower than, or similar to gas furnace combined with split air conditioning systems
(gas furnace/AC systems) in new construction.
The data does not cover installation costs, but heat pumps are less complex to install than conventional
gas furnace/AC systems, because installing a central heat pump system only requires the installation of
two pieces of equipment, the outdoor unit and indoor air handler (equal to the AC system), whereas gas
furnace/AC systems require the installation of three pieces of equipment: the outdoor unit, indoor air
handler, and gas furnace; Gas furnaces also require additional gas plumbing and venting inside the
buildings, which add to the gas and AC system installation labor and material costs.
This dataown research of online wholesale prices, and the California
, shows that there is no cost barrier to
including heat pump space conditioning in the baseline for new single- and multi-family homes in the
2022 Building Energy code. In fact,this has the potential to significantly reduce the cost of construction
and help boost new housing development in the state while making home ownership more affordable.
In addition, homes with heat pump space heating will have lower utility bills, as rooftop solar generation
that is now required for new homes since the 2019 building code will offset a significant portion of heat
pump operating costs.
A space heating heat pump installed today in California already reduces air and climate pollution from
1
heating by half and will ultimately produce zero emission as California decarbonizes its electric grid.
Existing Published Studies
According to a 2018 study conducted by Navigant for the California Building Industry Association (CBIA),
electric space heating also has a lower first cost than natural gas space heating. Specifically, that report,
electric appliances for space heating, cooking, and
2
clothes drying have lower costs than natural gas options in new construction.
1
Emissions reduction potential from electric heat pumps in California homes
Electricity Journal, November 2018.
2
California Building Industry Association Comments Impacts of Residential Appliance Electrification, Docketed
9/20/2018, https://efiling.energy.ca.gov/GetDocument.aspx?tn=224761
1
Electricity is also the most common space heating fuel throughout the United States with 43.9 percent
3
of all homes heating with electricity and 42.8 percent of homes heating with gas.
This percentage has generally been growing in newly constructed homes, as documented in the chart
4
below, with nearly 60 percent of new homes currently being constructed with electric space heating.
Figure 1: US Census Data Documenting Home Heating Fuel by Decade of Construction
Manufacturer Distributor Data
In addition to this existing published data, NRDC obtained distributor data from an anonymous
5
distributor for four brands of residential heat pumps and combination gas furnace air conditioners
which is summarized in Table 1. This data represents wholesale base price information that would be
available to a low-volume contractor and does not include any volume discounts that production
builders would be able to obtain.
It represents equipment cost only and not installation cost, which would typically be higher for gas
appliances due to the installation of three instead of two pieces of equipment, as well as venting and
installation of a second fuel type. Overall, this data shows that on average a baseline code-compliant
gas furnace/AC system unit is 14% more expensive than a baseline heat pump.
The table below also provides cost data for ultra-low NOx furnaces, which are required in key California
markets including the South Coast and San Joaquin valley air districts. For these units, the average cost
of the furnace/AC unit is 29% higher (considering 0.80 AFUE ULN units only).
3
https://www.census.gov/content/dam/Census/library/publications/2019/demo/h150-19.pdf
4
Ibid
5
Provided to NRDC via email in October 2020
2
Description Cost Increased cost of gas
equipment
Brand A
Electric: 14 SEER, 8.2 HSPF, 3-ton, Single-speed, central ducted $2309
HP system
Gas: Low-NOx gas/split 14 SEER, .80 AFUE $2434 +5%
Gas: Ultra-Low NOx gas/split 14 SEER, .80 AFUE $2771 +20%
Brand B
Electric: 14 SEER, 8.2 HSPF, 3-ton, Single-speed, central ducted $2682
HP system
Gas: Ultra-Low NOx gas/split 3-ton, 14 SEER, .90 AFUE $3537 +32%
(condensing)
Brand C
Electric: 14 SEER, 8.2 HSPF, 3-ton, Single-speed, central ducted $2004
HP system
Gas: Low-NOx gas/split 14 SEER, .80 AFUE $2445 +22%
Gas: Ultra-Low NOx gas/split 3-ton, 14 SEER, .80 AFUE $2753 +37%
Brand D
Electric: 14 SEER, 8.2 HSPF, 3-ton, Single-speed, central ducted $2512
HP system
Gas: Low-NOx gas/split 14 SEER, .80 AFUE $2867 +14%
Gas: Ultra-Low NOx gas/split 3-ton, 14 SEER, .90 AFUE $3275 +30%
Table 1: Distributor Cost Data
Online Distributor Data
Finally, NRDC conducted a separate analysis of prices for split heat pumps and gas furnace/AC systems
6
using price data found on online wholesaler websites in October 2020. While not necessarily
representative of builder pricing, which may include negotiated contracts and bulk discounts, online
wholesale retailers are typically similar to distributor wholesale pricing. In general,heat pumps and gas
furnace/ACsystems of the same capacities and efficiencieswere compared. This pricing is for
equipment only and does not include the price of installation, which is likely to be higher for dual-fuel,
three-piece gas furnace/AC systems than for two-piece split heat pumps. Similar to the distributor data,
analysis found that heat pumps were generally offered at a similar or lower price than their gas
furnace/AC equivalents.
6
Acwholesalers.com, HVACdirect.com, nationalairwarehouse.com
3
# Brand Cooling SEER AFUE/HSPF HP Gas Source
7
Capacity Price furnace
/AC
Price
1) Airquest/Carrier 3 tons 14 80%/8.2 $2,224 $2,248 HVACdirect.com
2)a) Goodman 3 tons 14 80%/8.2 $2,155 $1,909 acwholesalers.com
2b) Goodman 3 tons 14 80%/8.2 $2,394 $2,344 HVACdirect.com
3) Goodman 3 tons 16 96%/9.5 $2,678 $2,910 acwholesalers.com
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4) Rheem 3 tons 14/14.5 80%/8.2 $,2442 $2,776 Nationalairwarehouse.com
Table 2: Online Distributor Data Gas Furnace/AC
Conclusion
In summary, data from multiple sources indicates that heat pump space heating is generally the lowest
first cost option for new construction. Costs are therefore not a barrier to CEC setting the baseline space
heating type to a heat pump for all residential construction in the 2022 Title 24 Standards. Doing so will
lower construction costs, reduce occupants utility bills, and cut air and climate pollution by half and
more over the life of these buildings.
7
Note that gas furnace/ACs typically have higher heating capacities than their equivalent HP
8
Gas unit is 14.5 SEER
4
Appendix Documentation of Online Price Data
1)
5
2) a)
2)b)
6
3)
7
4)
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