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Boston is racing to decarbonize its public housing by 2030. The latest tool it’s deploying to reach that goal? Window-straddling heat pumps.
Last week, the Boston Housing Authority announced that it’s piloting the electric technology at Hassan Apartments, a 50-year-old public housing community with 100 units for older people and adults with disabilities. The modular appliances, made by California-based startup Gradient, plug into a typical 120-volt wall outlet and will replace the apartments’ outdated, much less efficient electric-resistance system.
“We believe that low-income people and the families and individuals who live in our buildings deserve access to 21st-century technologies and home comforts, just like anyone else out there,” said Joel Wool, the agency’s deputy administrator for sustainability and capital transformation. “We’re also doing our part to reduce air pollution and combat climate change.”
The Boston Housing Authority has ordered about 100 window heat pumps for the project. Two other Massachusetts housing agencies are also piloting Gradient’s appliances, the company announced last week: the Chelsea Housing Authority, which is testing about 400 heat pumps, and the Lynn Housing Authority & Neighborhood Development, which is trying out roughly 200 heat pumps, about half of which are already installed.
Outside of Massachusetts, in 2022, the New York City Housing Authority (NYCHA) committed to purchasing a total of 30,000 of the devices from Gradient and global appliance maker Midea over a period of seven years. The agency has been learning from an initial 72 heat pumps installed, and their performance has been positive enough that Gov. Kathy Hochul (D) announced on Friday $10 million to fund demonstration projects statewide.
Heat pumps, which are essentially reversible air conditioners, are key to electrifying heating. They provide potentially life-saving cooling, too. Because they shift around ambient heat instead of generating it anew, the appliances are routinely two to four times as efficient as electric-resistance and fossil-fuel-fired options. (Gradient claims its heat pumps are also about 50% more efficient than plain old window AC units.)
But retrofitting a building with a conventional heat-pump system can be a complex undertaking, requiring electrical upgrades and new refrigerant lines that run to individual air-handling units in each apartment, for example. Window heat pumps might require some trade-offs in terms of efficiency, but they also sidestep those serious installation hurdles.
That ultimately makes them faster and cheaper to deploy, as well as less disruptive to tenants, according to Wool. Two workers can install one of Gradient’s 140-pound heat pumps in about half an hour, NYCHA estimated, draping its saddle shape across a windowsill. And a July study by the American Council for an Energy-Efficient Economy found that window heat pumps are typically the lowest-cost option for efficiently decarbonizing space heating, coming in at an average lifetime cost of about $14,500 per apartment compared to between $22,000 and $30,000 for large-scale heat-pump systems.
For its pilot, the Boston Housing Authority is paying $5,450 per residence to retrofit with window heat pumps — about one-eighth of what it has spent to update other buildings with conventional heat-pump systems: approximately $40,000 per unit, according to Wool.
Electric and gas utility Eversource is fully funding the project through the state’s energy-efficiency collaborative, Mass Save. Once the retrofit’s complete, the Boston Housing Authority expects to save up to $60,000 in energy costs per year.
In New York, window heat pumps are already making deep cuts to energy use. At the NYCHA-owned Woodside Houses, going from a gas-powered steam system to the appliances slashed the amount of energy consumed for heating by 85% to 88%, according to preliminary results from NYCHA.
“This [reduction] sounds unrealistically large,” said Vince Romanin, founder and chief technology officer at Gradient. But “we roughly know the reasons.” Waste abounds with fossil-fuel systems: Boilers don’t perfectly convert fuel into heat, steam leaks on its way to apartments, and residents, lacking control over the temperature, are prone to throw open windows if they’re overheating, he noted. User-controlled window heat pumps avoid all of those issues.
Gradient has raised more than $31 million in venture funding and signed over $9 million worth of federal and California grants to develop its window heat pumps, which it has shipped to multifamily building owners and developers in 18 states, Romanin said. He declined to specify the cost per unit.
At the Hassan Apartments in Boston, installations are already underway and should wrap up by mid-November, said Wool of the city’s housing authority. The agency will monitor energy costs closely, as it weighs whether to deploy the tech at other properties. Across its 10,000-unit portfolio, heat pumps — of the conventional variety — serve just a few hundred apartments so far.
“We do think that window heat pumps are a great technology,” Wool said. “It’s also still an early one. We want to see how it performs.”
LOVELAND, Colo. — For a moment, I held in my hand the cool heart of a heat pump.
I was standing inside the cavernous facility where the startup AtmosZero is building its novel steam-producing heat pumps. The all-electric technology is meant to replace the gas-burning boilers that factories rely on to make everything from Cheez Whiz to notepaper to beer. I visited the 83,000-square-foot plant on a sunny September morning to learn how AtmosZero is working to make industrial heat — but without the planet-warming carbon emissions.
The grapefruit-sized component I grasped, called a compressor wheel, helps to produce the heat that’s needed to make steam with AtmosZero’s tech, Todd Bandhauer, the startup’s chief technology officer and cofounder, explained from the factory floor.
AtmosZero opened the facility, once a mothballed Hewlett-Packard electronics plant, earlier this year to begin commercial production of its Boiler 2.0, a machine the size of a shipping container that can be hoisted by crane and plunked inside another factory.
The company has big ambitions for its electrified solution. In the United States, around 40% of the fossil fuels that factories consume is burned in boilers to make steam for processes including sterilizing equipment, breaking down wood chips for papermaking, and cooking, curing, pasteurizing, and drying food.
“Steam is the most important working fluid, both in industry and the built environment,” said Addison Stark, the startup’s CEO and cofounder. “The boiler is what drove the Industrial Revolution.”
AtmosZero spun out of Bandhauer’s research at Colorado State University in 2021, and it has since raised nearly $30 million from investors and $3.2 million from the Department of Energy to realize its steam-heat dreams. In June, the startup finished installing a 650-kilowatt pilot unit at the New Belgium brewery in Fort Collins, Colorado. At the Loveland facility, the company is working to build and deliver its first commercial heat pumps by around 2026.
The factory floor was quiet when I visited last month, with custom-made parts in open boxes or on pallets awaiting assembly. But Stark said he sees the facility getting much busier as the company works to fill demand from potential buyers, who face increasing pressure from state regulators and their own customers to slash gas-related pollution.
“I want to see electrification [across] industry and actually get ourselves on track to get to the emissions reductions that we all want to see in this century,” Stark said. In his view, “The only path to that is steam decarbonization.”
Industrial heat accounts for about 13% of U.S. energy-related carbon emissions. Much of that comes from burning fossil fuels in boilers to produce steam, though a small fraction of factories have adopted electric-resistance boilers instead. These machines can at most be 100% efficient, meaning that all the energy that goes into the boiler comes out as heat.
Heat pumps, by contrast, move heat instead of making it. The appliances use electricity and a refrigerant to gather thermal energy from someplace else — say, the open air or a water pipe — and concentrate it using a compressor to deliver the heat where it’s needed. This process can be 300% to 400% efficient or higher.
AtmosZero and a handful of other manufacturers are developing new heat pumps that will allow the technology to replace an even larger share of gas-fired boilers in factories.
Existing heat-pump models can churn out heat up to about 160 degrees Celsius (320 degrees Fahrenheit) — hot enough to cover roughly 44% of industrial process-heat energy, according to a 2022 report by nonprofit American Council for an Energy-Efficient Economy, or ACEEE. New designs are expected to reach up to 200˚C (392˚F), addressing about 55% of factory heat needs.
“Being able to meet more than [half of] of industrial heat demand with a single technology is really impactful,” said Ruth Checknoff, senior project and research director at the Renewable Thermal Collaborative, a coalition of organizations working to decarbonize process heat and buildings.
At the AtmosZero factory, Bandhauer broke down how the Boiler 2.0 delivers more than hot air.
The compressor wheel I held had precisely sculpted blades that swept out in a tight spiral. When secured in the heat pump, a motor spins the wheel at up to 30,000 rotations per minute, throwing heat-carrying vapor against the equipment’s chamber walls. That increases the pressure, making the vapor hotter. AtmosZero’s heat pump utilizes two of these compression cycles, a kind of one-two punch, to ramp up the temperature enough to boil water.
Then, voila: You have steam as hot as 165˚C (329˚F).
Still, for all the apparent benefits, industrial heat pumps on the market today have struggled to gain widespread adoption. To start, they’re more expensive to install than gas boilers, which can last for decades — limiting the business case for replacing them. In the United States, fossil gas has historically been cheap enough in many places that a boiler has cost less to run than a heat pump, even though the latter uses a fraction of the energy.
States like California, Colorado, Illinois, New York, and Pennsylvania are adopting policies to help address these hurdles. That includes incentives for manufacturers to invest in tech that slashes emissions, air-quality regulations that limit pollution from their operations, and cheap financing for capital-intensive decarbonization projects. Advocates are also pushing states and utilities to work together to set more favorable electricity rates for factories.
Despite the technology’s high price tag, heat pumps can deliver significant savings on factory owners’ utility bills, according to ACEEE. A heat pump’s payback time — the amount it takes to recoup savings equal to the added installation cost — can be just a handful of years.
“We should invest time and energy into making sure that we have the right policies and enabling conditions to deploy [heat pumps] at scale,” Checknoff said.
AtmosZero isn’t the only company making steam-producing heat pumps. Other manufacturers — including GEA, Karman Industries, Heaten, Piller Blowers and Compressors, and Skyven Technologies — are proving out the tech, and some are starting to install their own machines in factories in the U.S. and Europe.
These systems often supplement existing fossil-fueled boilers by capturing a plant’s excess heat that would otherwise be wasted. That approach helps maximize a heat pump’s efficiency: Since the waste heat is already toasty, it’s easier for the tech to turn that into even higher-temperature heat for making steam.
Customers often want to actively harness this throwaway warmth to keep electric bills as low as possible, Checknoff said. But because every facility is different, installing a heat pump to slurp up that thermal energy can be costly and cumbersome.
AtmosZero is aiming for economies of scale, similar to how solar panels and home heat pumps are mass-manufactured and deployed in a modular way. “We want to bring that to the steam boiler,” Stark said during my visit.
The startup’s heat pump can be installed in a day, requiring only hookups to electricity and water lines and the factory’s control system. It’s as simple as replacing an old gas boiler with a new one, he said. And at New Belgium’s brewery, putting in the pilot heat pump this spring didn’t disrupt operations.
“They were able to continue to brew beer,” Bandhauer added.
AtmosZero’s product does have a key trade-off: It’s not as efficient as heat pumps that competitors install to harness waste heat. Those systems produce more heat with the same amount of energy. That ability is measured with what’s called the coefficient of performance, or COP. Whereas other companies’ installations might render a COP of seven or more, AtmosZero’s heat pump has a COP of up to roughly two.
But the Boiler 2.0 is cheaper to install, costing about one-tenth to one-fifth the expense of integrating a waste-heat system, Stark said. He estimated that the savings on the installation costs should enable AtmosZero’s projects to pencil out financially in five years or less.
At his desk inside the AtmosZero factory, a young engineer named Mason Mollenhauer pulled up on his computer screen a rendering of the 650-kilowatt heat pump installed at New Belgium’s Fort Collins brewery. The appliance sends the AtmosZero team, about 30 people in all, a steady stream of data.
New Belgium, the famed maker of Fat Tire Ale, is using the steam to boil wort, a sugary liquid, with bitter hops to create the libation’s flavor and aroma profile before it’s fermented into beer. When running at full capacity, AtmosZero’s heat pump is able to provide about 30% to 40% of the brewery’s steam needs.
The AtmosZero team has been carefully monitoring the New Belgium installation’s performance since June, and they’ve been able to apply lessons from the pilot project to improve their product, Bandhauer said.
While AtmosZero’s first heat-pump unit was stuffed with equipment, the latest version is roomier. The streamlined model has fewer parts, reducing costs and making it easier to service, Bandhauer said. The team is also finessing the design of its crucial compressor wheels.
Michaela Eagan, a spokesperson for New Belgium, said the brewer is focused on evaluating how the heat pump performs and hasn’t committed to any future orders.
But AtmosZero is in talks with dozens of other potential customers and is anticipating demand through 2027, Stark said. Currently, the startup’s plant contains one crane-assisted heat-pump assembly bay; that’ll grow to four. Whereas the first Boiler 2.0 took roughly three months to build, AtmosZero could be cranking out 120 to 240 heat pumps per year by 2030, he estimated.
So far, the company has primarily targeted factories for its product. But AtmosZero is also branching out into steam for other big buildings. In September, New York awarded the startup $500,000 through the Empire Technology Prize to install two of its heat pumps at the Midtown Hilton hotel in Manhattan, a project that’s still in negotiation, Stark said.
After touring the factory floor, we sat down in a nearby taproom. I asked Stark how he felt about what he and his cofounder Bandhauer were building. “Neither of us were wanting to be founders,” Stark said. “It’s a hard thing to reinvent the boiler.”
Yet “it’s rare to find an opportunity to have such a positive impact [on carbon emissions] and be profitable,” he added. “Todd and I and our whole company see that opportunity.”
A clarification was made on Oct. 16, 2025: This story has been updated to clarify that the money AtmosZero received to install heat pumps at the Midtown Hilton is through the Empire Technology Prize, a combination of private-sector and state funding.
States are ramping up efforts to get residents to switch from fossil-fuel-fired heating systems to all-electric heat pumps. Now, they’ve got a big new tool kit to pull from.
Last week, the interagency nonprofit Northeast States for Coordinated Air Use Management, or NESCAUM, released an 80-page action plan laying out key strategies to turbocharge heat-pump deployment. Individual states are already putting many of these tactics to the test.
California, Colorado, Maine, Maryland, Massachusetts, New Jersey, New York, Oregon, Rhode Island, and the District of Columbia together committed to ambitious heat-pump adoption goals last year. Washington state joined the pact last week. Their targets: By 2030, heat pumps will make up 65% of the sales of residential heating, air conditioning, and water heating equipment. By 2040, that percentage is to climb to 90%.
The goals are essential for addressing climate change. Buildings are directly responsible for 13% of U.S. carbon emissions, in part due to the fossil fuels burned on-site to heat indoor air and water. All-electric heat pumps can do those jobs running on clean power.
The NESCAUM action plan comes as the Trump administration clings tenaciously to fossil fuels. In recent months, the federal government has rolled back energy-efficiency standards for appliances, imposed chaotic tariffs that are raising costs for consumers, and put an early expiration date on the $2,000 federal tax credit that helps homeowners afford heat pumps.
Despite these headwinds, the report shows that “states are still finding creative ways to move forward,” said Emily Levin, policy and program director for NESCAUM.
HVAC heat pumps are routinely two to four times as efficient as gas furnaces, capable of heating and cooling interiors using the same physics that refrigerators employ to chill your cucumbers. Heat-pump water heaters work the same way and are three to five times as efficient as gas water heaters. By eschewing fossil fuels, these technologies improve air quality and typically save people money over the long term, even if, on average, they cost significantly more up-front than conventional heating systems. (At least one startup, though, is trying to change that.)
Heat pumps are slowly catching on. In the U.S., the units outsold gas furnaces by their biggest-ever margin last year, but their share of the market is still modest. Citing data from the Air-Conditioning, Heating, and Refrigeration Institute, a trade association, Levin said that in 2021, heat pumps accounted for about 25% of the combined shipments of gas furnaces, heat pumps, and air conditioners, the three largest reported HVAC categories. In 2024, they’d risen to about 32%.
“No matter how you look at it, there are still a lot of gas furnaces being sold, there are still a lot of one-way central air-conditioners being sold — all of which could really become heat pumps,” Levin said.
Produced in consultation with state agencies, environmental justice organizations, and technical and policy experts, the NESCAUM report lays out a diverse set of more than 50 strategies — both carrots and sticks — covering equity and workforce investments, obligations to reduce carbon, building standards, and utility regulation. A wide range of decision-makers, often in collaboration, can pull these levers — from utility regulators to governor’s offices, state legislatures, and energy, environment, labor, and economic development agencies. Here are six recommendations from the report that stand out.
NESCAUM’s Levin stressed that the report is “a menu — not a recipe.” Each state will need to consider its own goals and constraints to pick the approaches that fit it best, she added.
Still, “I see [heat-pump electricity] rates as one of the areas that’s most promising,” Levin said. Massachusetts’ reforms “are really going to change their customer economics to make it more attractive to switch to a heat pump.”
When done right, rate design also avoids the need for states to find new funding. “You’re not raising costs on anybody, you’re only reducing costs,” Levin said. At a time when households are seeing energy prices rise faster than inflation, the tactic could have widespread political appeal, she noted.
NESCAUM plans to check back in with states and report out on their progress each year, Levin said. “The cool thing about our work is that we bring states together to learn from one another,” she added. “Part of making this transition happen more rapidly is lifting up the things that are really working well.”
Heat pumps can save households money. But the super-efficient, electric HVAC appliances are almost always more expensive to install up-front than gas- or oil-fired options.
Jetson, a Vancouver-based heat-pump startup, thinks it can change that — with a combination of new software, hardware, and a direct-to-consumer approach.
“We are typically anywhere from 30% to 50% below competitive quotes,” said cofounder and CEO Stephen Lake.
The company’s name, which may resonate with certain cartoon-watchers, harkens back to an era when people believed that “technology would enable this exciting, better future for us all,” Lake said.
His roughly 75-person startup, which Lake would only divulge has “raised a bit of money,” launched sales last October to try and deliver on that promise. So far, it’s installed heat pumps — which can both warm and cool spaces — in nearly 1,000 homes in Colorado, Massachusetts, and British Columbia, Canada, and it plans to expand into New York in a few weeks, he said.
Today, Jetson is announcing a move it says will further cut costs: It’s rolling out its very own heat pump, the Jetson Air. The startup has partnered with an undisclosed manufacturer to make the appliance.
Whole-home ducted heat pump projects in the areas where the startup currently operates typically have a price tag of $25,000 to $30,000, Lake said, citing data from bids that customers routinely share with Jetson. Those prices are also about the norm nationwide, according to electrification nonprofit Rewiring America — and are significantly higher than the cost of a new gas furnace ($8,000 to $10,000) plus air conditioner ($3,000 to $5,000), Lake said.
Jetson says its average heat-pump installation cost is way less than the national average: just $15,000.
Many markets also offer thousands of dollars in heat-pump rebates, which the startup deducts from what customers pay out of pocket. In these spots, Jetson can offer heat pumps in some cases for as little as $5,000, Lake said. At that point, it’s a financial no-brainer to choose the electric equipment over a gas furnace.
Bringing down the up-front costs of heat pump adoption is crucial, especially in the U.S., where the federal government is pulling back incentives for the HVAC tech. More than 80 million homes across the U.S. and Canada burn fossil fuels for heat, according to government data. These furnaces and boilers rack up around 3 to 6 metric tons of carbon emissions per household annually, Lake said, and heat pumps are the way to cut that pollution. Swapping a fossil-fueled heater out for a heat pump slashes CO2 about as much as trading in a gas car for an EV.
Jetson is taking a fresh approach to deliver its low heat-pump prices: vertical integration.
Traditionally, equipment manufacturers sell heat pumps to brands, which sell them to distributors, who sell them to HVAC installers, who sell them, finally, to homeowners, Lake explained.
“At each stage, there’s a markup,” said Brett Webster, a principal on RMI’s carbon-free buildings team. “There’s good reason to think that a vertically integrated company could reduce costs.”
Jetson cuts out the middlemen. It buys the heat pumps, stores them in its own warehouses, and has its own in-house installers ride out in the company’s electric vans to put the appliances in homes, Lake said.
Using custom software, Jetson also cuts costs by scoping heat pump projects virtually rather than sending someone out to each would-be customer. Last year, Jetson acquired whole-home decarbonization startup Helio Home and built upon its thermal modeling software that can accurately size heat pump systems remotely. In most cases, the first time an installer comes to an abode is to put in the heat pump. The company additionally uses proprietary software to process rebates.
Jetson’s tech-forward approach flows from Lake’s background. The Canadian entrepreneur previously built a smart-glasses startup called North that Google acquired for an undisclosed amount in 2020. With the climate crisis pressing and heat pumps an undersung solution, Lake and some of his colleagues from North pivoted to HVAC, he said.
Others are also developing software to improve the heat-pump customer experience. Manufacturing startup Quilt uses over-the-air updates to improve its minisplit heat pumps over time. And home-electrification startups, such as Zero Homes, have created software to reduce the cost of heat pump projects.
In the view of RMI’s Webster, Jetson’s vertically integrated approach is “taking the next step.”
Jetson installed a heat pump for Matt Machado, who works as an expert on surface water and groundwater rights at Colorado law firm Lyons Gaddis, for a cost of about $7,000 — a third of what the eight or nine other contractors he got bids from offered. He’ll get another $2,000 off when he claims the federal Energy-Efficient Home Improvement Credit (25C) at tax time. Jetson “made it easy,” Machado told Canary Media. On pricing, “they’re very transparent.”
Jetson’s low cost was thanks in part to the company’s up-front application of state and local rebates, which tallied roughly $6,000, Machado said. Other contractors didn’t make these reductions, which would’ve left him to absorb the cost and file for the rebates on his own.
With the launch of its heat pump, Jetson aims to provide a product that delivers the customer experience of a Tesla or Rivian electric vehicle, Lake said.
The Jetson Air heat pump is “comparable to the best models,” rated to work down to minus 22 degrees Fahrenheit, he added. Brands such as Bosch, Carrier, Lennox, and Mitsubishi already make popular options for cold-climate markets.
What sets Jetson’s appliance apart, Lake said, are its built-in software, sensors, and controls. Homeowners can use these features to schedule their heat pumps to run at times of the day when the grid isn’t strained and power is cheaper. The tech also lets Jetson monitor a system’s performance and reach out if something needs to be fixed.
“What are the amperages being drawn? Is your air filter getting dirty? Are there any error codes coming up? Is anything not running 100%? We can tell all that remotely,” he said. No other heat pump on the market today is capable of that, he noted.
Ultimately, Lake said that these improvements in functionality compound into more savings for the customer.
HVAC “is this very unsexy category, which I love,” Lake said. “So many things we’re doing — applying software to make [products] more efficient and designing better systems — [are] improvements that in other industries have happened a long time ago.” But they’re “completely novel in this HVAC world.”
Cheese. Beer. Clothes. Paper. Manufacturers across the country rely on combustion boilers to produce the heat required for making a range of products. But by burning coal, oil, gas, and other fuels to do so, that equipment spews health-harming and planet-warming pollution into the skies.
A different technology would allow communities to breathe easier. Electric heat pumps, which can provide industrial heat without emissions, are spreading but remain underutilized. They only supply about 5% of global industrial heat.
Now, a new study quantifies what Americans stand to gain from manufacturers switching to heat pumps. A gradual transition would not only decarbonize heating but deliver a staggering $1.1 trillion in public health benefits and avoid 77,200 pollution-inflicted deaths from 2030 to 2050, according to a report released Thursday by the nonprofit American Lung Association.
It’s a move “that’s going to save lives, reduce health emergencies, cut asthma attacks, [and] keep kids healthy enough to be in school rather than missing school days,” said Will Barrett, an assistant vice president at the American Lung Association who works on national clean air policy.
Nearly half of the U.S. population lives in places with very unhealthy levels of ozone or particle pollution, two of the most common and dangerous air pollutants. Antiquated boilers are an oft-overlooked part of the problem.
Like other fossil-fuel-burning machines, such as home appliances and cars, industrial combustion boilers release nitrogen oxides, fine particulate matter, and sulfur dioxide into the air. These toxic byproducts can harm children and adults in severe ways, such as asthma attacks, preterm births, heart attacks, strokes, and an impaired ability to think.
To quantify the benefits of switching to industrial heat pumps, the authors created an inventory of the industrial boilers across the U.S. based on publicly available data. They found that about 33,500 boilers scattered around the nation operate at the low and medium temperatures — i.e., less than 200 degrees Celsius — that make them the best candidates for heat pumps to replace. (For now, heat pumps are most feasible for lower temperatures, though Barrett noted research-and-development efforts will bring down the costs for higher-temperature changeouts over time.)
The team then estimated how much pollution would be avoided by gradually swapping these boilers out for electric heat pumps over the next 15 years, with lower temperatures addressed soonest. By leveraging the U.S. Environmental Protection Agency’s health impacts tool, the team found that switching to heat pumps would not only save thousands of lives but also prevent 33 million asthma attacks, 204,000 asthma cases, 13 million lost school days, and 3.4 million lost work days.
States in which more people live close to industrial pollution sources would experience the greatest boost to public health and productivity, according to the team’s analysis. The three with the biggest estimated health benefits are Florida, which would save $107 billion over the study period, Pennsylvania ($82 billion), and North Carolina ($68 billion). Twenty-three others would save at least $25 billion each.
The transition would also reduce carbon emissions by 1.6 billion metric tons through 2050. That translates to $351 billion in avoided societal costs due to a destabilized climate — which is already being felt in record-breaking heat waves and deadlier floods. Sources of industrial heat, including boilers, account for 9% of all U.S. greenhouse gas pollution, according to the Department of Energy.
The findings come as the Trump administration aggressively rolls back public health protections, emissions regulations, and support for industrial decarbonization projects, having cancelled $3.7 billion in funding in May.
To push industries to switch to heat pumps, the report recommends state and local policymakers offer manufacturers incentives to electrify their heating, launch education campaigns aimed at communities and companies, and require the adoption of nonpolluting equipment. California has taken the lead; its South Coast Air Quality Management District passed a first-in-the-nation measure last year to gradually phase out combustion boilers and process heaters starting in 2026.
“It’s a new paradigm when you’re operating and fulfilling all the needs of these manufacturing heat processes without causing health-harming pollution,” Barrett said.
How do you reduce greenhouse gas emissions from one of the largest sources — buildings — without breaking the bank or the grid? To answer that question, the utility Puget Sound Energy (PSE) turned to DNV, a global risk management and assurance consultancy, to examine the benefits of heat pumps.
While heating, ventilation, and air conditioning technologies have vastly improved in efficiency over time, the intervals at which people replace these systems aren’t that frequent, so it may take decades to upgrade a carbon-intensive but otherwise properly functioning HVAC system. Utility programs to incentivize the replacement of older systems with more efficient ones can speed up the process, but in colder regions, that typically means simply replacing a system fueled by oil or natural gas with a more efficient but still fossil-fueled system. Electric heat was simply too inefficient and expensive for colder climates — until recently. Fortunately, the heat pumps on the market today have matured to the point where they are effective in places with colder climates, like Washington state. But they still need a little push for widespread adoption.
When data met heat pumps
PSE supports approximately 1.1 million electric customers and more than 900,000 natural gas customers and is at the forefront of heat pump deployment across the Evergreen State. The utility, which has worked with DNV on energy projects since 2010, wanted more data on potential customer and system impacts of dual-fuel heat pumps. “I was already in conversation with the customer on a potential project related to load forecasting when a question came up around dual-fuel heat pumps,” said DNV Principal Consultant Kevin Cracknell. “My response was that DNV has the data and expertise to help.”
So DNV and PSE devised a pilot program that provided incentives for two types of heating and cooling systems: dual-fuel heat pump systems and cold-climate heat pump systems. The pilot targeted customers who were either interested in adding a hybrid heat pump system to their natural gas furnace or replacing their electric forced hot-air furnace with a cold-climate heat pump.
What are dual-fuel heat pumps?
Dual-fuel systems have a standard heat pump, which can provide heating down to about 35 degrees Fahrenheit, paired with a natural gas furnace, which turns on when temperatures drop below 35°F. The cold-climate systems are rated to provide 100 percent heating until temperatures drop to about 5°F.
With average winter temperatures between 30 and 40 degrees Fahrenheit, PSE’s territory is an ideal place to deploy heat pumps. But electrification comes with challenges. If the majority of PSE’s 900,000-plus gas customers made the switch to electric heat pumps, the impact on the grid could be significant. Because the impacts on energy savings and peak load from heat pumps hadn’t been closely studied, PSE needed to fully understand the implications before it considered expanding the program. “When it comes to energy efficiency programs, utilities need information backed up by sound science. The DNV team provided critical information on heat pumps to PSE so they can move the energy transformation forward,” said Geoff Barker, a principal consultant at DNV and the sponsor of this project.
To get a clear picture of typical consumption patterns, DNV completed a preliminary analysis using unique localized data, including residential saturation surveys, daily gas data, and interval advanced metering infrastructure (AMI) data. The data was available through DNV’s existing end-use data development work as well as load research completed to support PSE’s gas and electric utility rate cases. Using this data, DNV examined consumption patterns on the basis of outside temperature, home size, and heating technology. DNV’s preliminary analysis enabled PSE to confidently validate assumptions on energy use and changes in load, which got the utility team excited for a more detailed study.
Then PSE engaged DNV to evaluate how much money energy program participants saved and how the new equipment changed peak demand during the heating season. Both these statistics are important — participants need to see at least a small dent in their energy bills to make their investment worthwhile, and the utility needs to make sure the grid can handle the increased demand. Measuring energy savings was relatively simple. DNV analyzed billing data to estimate annual heating savings and hourly peak demand, modeled consumption data, and then estimated annual savings using weather-normalized daily consumption and peak-demand impacts.
A sample of dual-fuel heat pumps were also submetered to determine when the heat pumps or gas furnaces were being used and at what outdoor temperatures. To measure the difference between the modeled and actual consumption, the submeter data was also compared with the consumption data in the AMI billing analysis.
From an energy savings perspective, results were positive: The pilot program showed that all the program participants reduced the total amount of energy used to heat their homes. For participants who switched from an electric furnace to a heat pump, all the energy savings were due to the greater efficiency of the cold-climate heat pump. Results were mixed for participants who switched from a gas furnace to a heat pump and for those who installed a hybrid system. While their electricity use increased, that was countered by a reduction in gas consumption, and thus a reduction in their overall home energy use.
Just as important to PSE was the program’s effectiveness. DNV explored the experiences of the customers who switched to hybrid systems, the contractors who installed the equipment, and PSE staff to understand all aspects of the program. Unlike the energy savings evaluation, this analysis depended on interviews and surveys, and provided PSE with insights on how to improve the program moving forward.
The good news is that all participants were very satisfied with the new equipment. Customers rated their experience with the program very highly, and a majority of them would recommend a similar heat pump system to their friends and family. For energy savings, the average satisfaction rating for customers with a cold-climate heat pump was 4 out of 5. For owners of a hybrid system, it was slightly lower, 3.9 out of 5, likely because the overall savings were a bit less than expected.
What’s next for heat pumps in Washington state? DNV identified several areas where the program could be improved, including the need for more clarity on how to optimally run the hybrid heat pump systems (some participants had their gas heating kick in at temperatures as high as 50°F, and others let it run at any temperature). PSE plans to provide incentives for hybrid heat pump systems for the next 5 years and will continue to evaluate the energy savings, peak demand, and carbon emissions impacts over the next few years.
Additionally, future participants and their systems will provide more data, which will help increase understanding of how hybrid heat pump systems impact energy consumption — giving the industry a greater understanding of this emerging opportunity. PSE plans to provide incentives for hybrid heat pump systems for the next 5 years and will continue to evaluate the energy savings, peak demand, and carbon emissions impacts of the systems over the next few years.
“The collaboration with DNV has allowed us to gather valuable data that will help shape the future of home heating in our region.”
Jesse Durst, senior market analyst at PSE
PSE’s pilot heat pump program is laying the foundation for significant decarbonization in Washington state, ensuring that its customers are saving energy, reducing greenhouse gas emissions, and keeping warm all winter long. But the impact of this pilot program goes beyond the state’s borders. The data and insights DNV has amassed are a solid foundation for utilities, contractors, and customers to understand the value of heat pumps as an effective tool for decarbonization.
Canary Media’s “Electrified Life” column shares real-world tales, tips, and insights to demystify what individuals can do to shift their homes and lives to clean electric power.
As summer temperatures sizzle, are you frantically shopping for central air conditioning? Take a breather, because you could get AC functionality — and more — by opting for an increasingly popular appliance: a heat pump.
All-electric heat pumps are ACs, but better. Equipped with the ability to work in reverse, they not only dump heat outside in the summer, but can also pull heat indoors in the winter.
Heat pumps do often cost a bit more up front, but if you’re on the hunt for a new AC system anyway, the difference can be small enough that it’s worth exploring the option. After all, you could end up with AC and a shiny new heating system, to boot.
Should you join the growing share of households choosing heat pumps over mere ACs? Here are answers to key questions a prospective buyer is likely to have.
When sized right, heat pumps let you simultaneously meet your cooling needs and proactively upgrade your heating system to one that’s better for your health and, typically, your wallet in the long run.
For most households, these two-in-one appliances pay for themselves in reduced energy bills over their estimated 16-year lifetime.
Families that go from relying on expensive delivered fuels to electric heat pumps unlock the biggest cost savings: an average of $840 per year, according to electrification nonprofit Rewiring America. Households ditching gas heating can see an average of $60 in savings per year. Utility customers with access to electricity rates that favor heat pumps can save even more.
Other benefits? Heat pumps slash planet-warming pollution. Adopters report that the appliances produce more even, comfortable heat than gas systems. And unlike their fossil-fuel-burning counterparts, heat pumps don’t emit pollutants linked to asthma, cancer, and premature death.
Oh, and if you’re okay with air-handling units on your walls, a mini-split heat pump system can let you get AC without having to install pricey ductwork.
It’s tricky to find trustworthy data about the cost of central AC, home-energy marketplace EnergySage reports. But the general consensus is that heat pumps do come at a bit of a premium.
Here’s one example: In California, it costs between $900 and $1,900 more to replace a broken central AC with a heat pump instead of a conventional AC. That’s out of a median total heat-pump installation cost of $15,900, per data from the TECH Clean California program from July 2021 to April 2024.
But spending on a heat pump can mean avoiding the expense of getting a new furnace. Southern California’s air-quality agency recently found that installing a heat pump in a single-family home in the region typically costs $1,000 less than installing a gas furnace and AC.
Across the U.S., heat pump installations typically fall between $6,600 and $29,000, according to Rewiring America. That wide range is because project prices for heat pumps, like other HVAC equipment, can depend on a dizzying number of factors, including the size of your home, its energy demand, your local climate, the equipment efficiency rating, the state of your home’s electrical system, and how familiar your local labor market is with the product.
For now, there’s the Energy Efficient Home Improvement Credit, which can take up to $2,000 off your federal tax bill for a qualifying heat pump. But if Republicans’ “Big, Beautiful Bill” passes in its current form, that tax credit will disappear at the end of this year. (All the more reason to get one this summer.)
Income-qualified households can check with their state energy office about the availability of Home Energy Rebates, an $8.8 billion initiative created under the landmark 2022 Inflation Reduction Act. Details vary by state, but the law established an $8,000 incentive for a heat pump, as well as rebates for enabling updates: $2,500 for electrical wiring and $4,000 for an electrical panel upgrade. While some state programs have rolled out after being finalized under the Biden administration, others still awaiting approvals are now stuck in limbo.
Separate state and local incentives may also be available. Ask your utility, Google, and reputable heat-pump contractors in your area. Rewiring America also has a handy calculator that provides information on electrification incentives for residents in 29 states, with more soon to come, a spokesperson said.
Get at least three quotes; the EnergySage marketplace can connect you to vetted local installers so you can compare offers. Some contractors specialize in home electrification — and might offer cutting-edge strategies to navigate a heat pump transition. Utility and local incentive programs may also have lists of participating installers.
But don’t stop there. See if there’s a local electrification group — like Go Electric Colorado, Electrify Oregon, or Go Electric DMV for D.C, Maryland, and Virginia — which can connect you to resources and friendly, knowledgeable electric coaches. Typically volunteers, they can offer free advice and recommend contractors they’ve worked with.
Ideally, you don’t want to find yourself in the sticky and sometimes downright dangerous situation of needing to get your AC replaced in an emergency. But if your AC has suddenly expired, you can give yourself more time to weigh your options by getting a “micro” heat pump as a stopgap measure.
Experts recommend drafting a road map for electrification upgrades in advance. Research contractors, costs, incentives, and logistics of other upgrades, like insulation and air-sealing or electrical system updates; your future self will thank you.
To help you on your electrification journey, Rewiring America offers a free, personalized planning tool, complete with estimated energy-bill impacts.
Changing your HVAC system is a big deal — and you don’t have to figure it out on your own. Got a question or story to share about choosing a heat pump over an AC, tackling another electrification project, or fully electrifying your home? I’d love to hear it! Reach out to me at takemura@canarymedia.com; my aim is to make the energy transition easier for you. Stay cool out there!
On Friday, air-quality regulators for Southern California rejected a plan to gradually phase down a major source of pollution: new gas-burning space and water heaters in homes. It’s a blow to efforts to clean up harmful, planet-warming emissions from buildings — in Southern California and possibly beyond.
The rules would’ve reduced smog-forming emissions in the South Coast Air Quality Management District, home to more than 17 million residents across Los Angeles, Orange, Riverside, and San Bernardino counties — a region with some of the nation’s dirtiest air, according to the American Lung Association.
“We had the opportunity to pass life-saving legislation that would have significantly reduced air pollution from home appliances sold in our region,” Holly J. Mitchell, an LA County supervisor and SCAQMD board member who voted in favor of the measures, said in a statement. The rules were a chance “to improve health, reduce medical expenses, and fulfill our job of bringing our region into compliance with the Clean Air Act.”
Friday’s 7-5 vote against the rules, which were poised to be the agency’s strongest in three decades, came after more than two years of development and months of intense industry-led opposition.
An investigation published by Floodlight and The Guardian last week found that, since December, the Southern California Gas Co. — or SoCalGas, the nation’s largest gas-distribution utility — and allied groups have spread misleading information about the rules and encouraged mayors and other public officials to send letters, testify, and pass resolutions opposing the measures. On Thursday, the Trump administration threatened to sue if the measures were adopted.
At the end of the six-hour meeting Friday, the board sent the rejected rules back to a committee. They won’t be revisited this year, according to the agency. But what comes of any further rejiggering is “almost without a doubt, going to be weaker than what was initially proposed,” said Christopher Chavez, deputy policy director at the California nonprofit Coalition for Clean Air.
Opponents repeatedly claimed the proposals, updates to rules 1111 and 1121, were a mandate to switch to electric equipment and a ban on gas-burning appliances. But they were, in fact, neither.
The rules would have allowed residents to keep their gas-fueled equipment — and even to replace it at the end of its life with gas systems if that’s what they chose. SCAQMD’s staff had proposed a glide path for manufacturers to gradually increase their sales targets of super-efficient electric heat-pump water heaters and heat pumps: from 30% by 2027 to 90% by 2036. Manufacturers would have also paid a nominal mitigation fee of $50 to $500 per gas appliance sold — far less than the actual health costs associated with them, the agency acknowledged in March.
Heat pumps can cost more or less than conventional appliances depending on the equipment and home type. For example, according to the SCAQMD, installing a heat pump in a single-family home typically costs $1,000 less than installing a gas furnace and AC.
Industry-led pressure had already significantly watered down an earlier draft of the rules that would have effectively barred the sale of gas-burning heaters and water heaters. Still, even the weaker measures would have slashed emissions of nitrogen oxides by 6 tons per day by 2060 in the smoggiest region in the country. In its socioeconomic analysis, the agency estimated the regulations would have saved around 2,490 lives and $25 billion in health costs from 2027 to 2053.
Opponents included the Orange County Business Council, the Central Valley Business Federation, and former LA Mayor Antonio Villaraigosa, a Democrat running for California governor. Many claimed the rules would impose a huge financial burden on consumers, referencing a report that puts the cost of the measures at $8.9 billion annually. The report’s author works for the California Business Roundtable, an organization that SoCalGas parent company Sempra paid membership dues to last year.
A SCAQMD staff member called the oft-cited analysis inaccurate, pointing out severe flaws in the modeling approach at Friday’s meeting. The agency’s staff, which is separate from the voting board, maintained that the measures made economic sense, ranging from an estimated price tag of $174 million to an estimated savings of $191 million annually. But even after the staff’s briefing, board members who voted no continued to bring up costs.
Southern California’s decision has put advocates on guard as other jurisdictions aim to develop and implement zero-emissions appliance rules, according to Dylan Plummer, building electrification campaign advisor at the Sierra Club. That includes the San Francisco Bay Area, which adopted a zero-emissions standard for space and water heaters in 2023; the state of California, as air regulators could produce a similar proposal late this year; and Maryland, which is crafting zero-emissions rules for heating homes and businesses.
For SCAQMD’s proposed regulations, the gas industry, real-estate associations, and the California Republican Party mounted an effective campaign of falsehoods about costs and consumer choice, Plummer said. “We have a lot of work to do to inoculate not just the public but regulators and elected decision-makers against those talking points.”
Last week, the Trump administration canceled $3.7 billion in federal funding for two dozen green industrial projects that the Department of Energy claimed “failed to advance the energy needs of the American people, were not economically viable, and would not generate a positive return on investment of taxpayer dollars.”
More than a quarter of that spending would have gone to 11 projects designed to cut planet-warming pollution from generating the heat used in factories — one of the trickiest decarbonization challenges to solve.
“This is a really, really significant setback for clean heat in the U.S.,” said Brad Townsend, the vice president of policy and outreach at the think tank Center for Climate and Energy Solutions (C2ES).
The wide-ranging projects included installing industrial heat pumps at up to 10 plants where giant Kraft Heinz Co. produces its foodstuffs, building an electric boiler at one of plumbing-fixture manufacturer Kohler Co.’s Arizona factories, and adding a heat battery to Eastman Chemical Co.’s facility in Texas.
Distributed under the Industrial Demonstrations Program at the Energy Department’s now-embattled Office of Clean Energy Demonstrations, the funding promised to bolster the manufacturing sector with a major investment in technologies meant to give American companies an edge in global markets.
Groups such as C2ES and the American Council for an Energy-Efficient Economy estimated the federal support would generate hundreds of thousands of jobs in both direct construction and operations and indirect hiring at real estate firms, restaurants, and retailers near the industrial sites. In addition, federal researchers expected to gather information through the projects that could be used broadly throughout U.S. industry to improve output and bring down energy costs.
“The data and lessons learned in de-risking this technology would then translate into follow-up investment in the private sector,” said Marcela Mulholland, a former official at the Office of Clean Energy Demonstrations who now leads advocacy at the nonpartisan climate group Clean Tomorrow.
“If you were in a technology area covered by OCED, you needed public investment to scale,” she added. “Something in the proverbial ‘valley of death’ made it difficult for the private sector to advance the technology on its own.”
With the funding, U.S. industry had the chance to develop new approaches that could produce greener — and cheaper — materials, giving American manufacturers an edge over Asian or European rivals as corporate and national carbon-cutting policies put a premium on products made with less emissions. Absent that, Mulholland said, U.S. companies risk falling behind competitors who benefit from lower-cost labor and easily accessible components from nearby industrial clusters, like those in Vietnam, China, or Germany.
“It’s hard to overstate the scale of the loss,” Mulholland said.
Already, a handful of companies are considering shifting production overseas in the wake of the funding cuts, according to two sources who have directly spoken to leaders of firms that lost federal funding. The sources were granted anonymity because they are not authorized to speak publicly about the plans.
“When these projects don’t go forward, we’re going to see challenges for the companies from a profitability perspective and from a global competitiveness perspective,” said Richard Hart, industry director at the American Council for an Energy-Efficient Economy. “What happens then is other countries and other companies will step in to meet those demands.”
In the long term, he added, the cuts erode the value of a federal contract.
“When the U.S. government signs a contract with you, it’s reasonable to assume that that contract is gold and that you can use that contract to make plans as a company that … you can explain to investors, to employees, and to the full group of stakeholders around your facilities,” Hart said. “The loss of trust that comes from canceling those contracts is likely to be pervasive. That’s very sad.”
Part of the problem is that the contracts were cost-share agreements, which traditionally give the federal government the right to exit the deals without any legal penalty. In theory, OCED could have structured the federal contracts differently through a category known plainly as “Other Transactions.” The Department of Commerce, for example, issued money from the CHIPS and Science Act to semiconductor companies through such “other transactions” that lack the same off-ramps for the government.
But the Commerce Department did so under the advice of a legal memo from its general counsel. By contrast, the Energy Department “is way, way behind” on adopting alternative contract structures when disbursing money, according to a former OCED official who spoke on condition of anonymity.
As a result, the agency stuck to the financing mechanisms with which it was familiar — such as cost-share agreements.
Internally, the Trump administration said the cuts were justified in part because the companies involved were well funded and could manage the investments themselves, the official said.
“But I don’t think that’s the case. They need a government incentive to make the technological changes they were trying to do,” the former OCED official said.
“I would bet less than half of them keep going by themselves,” the official added. “It’s a big blow.”
Canary Media’s “Electrified Life” column shares real-world tales, tips, and insights to demystify what individuals and building owners can do to shift to clean electric power.
An affordable housing complex for older adults in Sacramento, California, boasts some enticing features. Residents of the earth-toned, low-rise structures can cultivate gardens, swim laps in the pool, and toss bocce balls. They can stroll to visit neighbors. And now, after an electric transformation of the buildings, Foothill Farms residents can also enjoy the cleaner air that comes with ditching gas appliances.
The project not only slashes the complex’s health-harming and planet-warming pollution — it also made financial sense for both the owner BRIDGE Housing and its tenants. Two years ago, the 138-unit property’s original gas-fired equipment was nearing the end of its life. Coupled with available financial support, the timing gave executives of BRIDGE, a nonprofit affordable housing developer and manager, a chance to pivot away from fossil fuels.
The “smart, opportunistic” project at Foothill Farms illustrates how properties can electrify while keeping costs low for residents, according to a case study written earlier this year by staff at the Stewards of Affordable Housing for the Future, a collaborative of 13 nonprofits, including BRIDGE. The retrofit is also a trailblazer for the decarbonization journey millions more units of government-supported affordable housing will eventually need to take.
Although single-family housing is by far the most prevalent in the U.S., and the biggest source of carbon pollution from homes, cutting fossil fuels from multifamily affordable housing is a particularly tricky task.
Some of the most vulnerable Americans live in subsidized apartments, including low-income households with older adults, disabled individuals, young families, and veterans — and they usually rent these units. Residents typically lack the power or cash to electrify properties, which presents a hurdle to eradicating emissions from buildings and denies inhabitants the upsides of these retrofits: greater comfort, safer air, and potential bill savings.
“There’s an opportunity for delivering outsized benefits to [these] residents and communities,” said Lucas Toffoli, principal of the carbon-free buildings division at clean-energy think tank RMI.
In 2023, BRIDGE Housing decided Foothill Farms would be a good candidate for energy-efficiency upgrades after Bright Power, an energy services provider, and Carbon Zero Buildings, a company specializing in decarbonization retrofits, analyzed BRIDGE’s entire portfolio of properties.
Carbon Zero carried out the electrifying changes: The turnkey contractor swapped out polluting gas-fueled water heaters for Rheem heat-pump water heaters and replaced ACs with Samsung heat pumps capable of both warming and cooling spaces. The firm also installed LED lighting everywhere, which consumes a tenth of the energy of incandescent light bulbs.
Carbon Zero’s team first piloted the complete retrofit in one unit to work out the kinks. With feedback from staff and residents, the crew honed its approach so that it could complete a unit’s upgrades in a single day during business hours.
“I love that,” said Toffoli, who wasn’t involved in the project. “Displacing folks is not only expensive and burdensome … it’s a real disruption to people who may be juggling a lot of things, like work and family, or who have limited mobility or health problems.”
In the common areas, Carbon Zero installed a new heat-pump pool heater and heat-pump spa heater, 30 EV charging stations, and 240-volt power outlets in the laundry rooms. Foothill Farms still has gas-powered clothes dryers, but BRIDGE plans to replace them with electric dryers when they conk out.
Comparing 2023 average monthly energy usage data to 10 months of data after the in-unit retrofits were completed last spring, natural-gas use has decreased by 98% while electricity use has risen 24% across the whole property, thanks in large part to the almost-magical efficiency of heat pumps.
Virtually all of the project’s $2.6 million cost was covered by state and utility grants: California’s Low-Income Weatherization Program, TECH Clean California, and the Sacramento Municipal Utility District. Other projects, though, are by no means guaranteed to see so much aid, with funding limited and awards variable, said Sebastian Cohn, senior project manager at the nonprofit Association for Energy Affordability and BRIDGE’s primary contact for the weatherization program incentive.
“It is typically in a property’s best interest to enroll [in these incentive programs] sooner than later,” Cohn told Canary Media. “The same project reserved today would receive less than half the [Sacramento Municipal Utility District] incentives Foothill Farms did due to updated incentive levels and per-project limits.”
Unlike many landlords who don’t pay tenants’ utility bills, and thus don’t benefit from energy-efficiency upgrades, BRIDGE actually had a financial incentive to make this switch to electric appliances: The organization pays for residents’ gas usage but not their electricity bills. How then did the project prevent residents’ costs from going up?
Elementary, my dear reader. Federal rules for most subsidized affordable housing protect residents from high rent and utility costs — and make sure these expenses don’t exceed 30% of their income — by requiring owners to provide what are called utility allowances, i.e., rent reductions to tenants paying their own utilities. The exact amounts are set by housing authorities and depend on locale, home size, and types of appliances. Based on the utility allowances for Sacramento when Carbon Zero pitched the project, the contractor estimated that residents would come out ahead, with each unit on average saving over $200 annually. The estimated savings for BRIDGE itself were $25,000 per year.
The real-world results match the initial project modeling very well, Cohn said, though BRIDGE declined to share specific dollar savings.
BRIDGE isn’t planning to stop with this project; a spokesperson said it’s already working with Carbon Zero and Bright Power on similar retrofits at a few other California properties.
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