Client: Green Energy Consumers Alliance (GECA)
Authors: Ricardo Lopez, PhD, Tyler Comings, Liz Stanton, PhD, and Eliandro Tavares
November 2018 - May 2019
Senior Researchers Ricardo Lopez, PhD and Tyler Comings, Clinic Director and Senior Economist Liz Stanton, PhD and Assistant Researcher Eliandro Tavares prepared a report that assessed the cost to replace residential heating and cooling systems with: 1) a gas furnace and electric central air conditioning (AC), or 2) an electric heat pump that provides both heating and cooling. The report finds that the cost-effectiveness of heat pumps depends on home-specific differences—with current Massachusetts rebates, owners of aging oil heating systems save $158 per year by choosing to replace with a heat pump instead of a gas furnace and central AC. For owners of gas heating systems, however, rebates for heat pumps are smaller than rebates for new gas furnaces, raising the relative cost of choosing heat pumps from $36 per year with no rebates to $73 per year with rebates. Even without rebates, the lifetime costs of heat pumps are only marginally more expensive than a gas furnace and central AC (see Figure above).
