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.
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%.
I recently read a piece about the "Cost disease in services" that was really enlightening (https://growthecon.com/feed/2017/05/15/What-You-Spend.html).
"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.