California Faces Heat Pump Adoption Challenge Amid High Power Bills

State aims for 6 million heat pumps by 2030, but residential electricity prices are a major obstacle.

Published on Mar. 2, 2026

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California has ambitious goals to reduce greenhouse gas emissions by electrifying buildings, including installing 6 million heat pumps in homes by 2030. However, the state's high residential electricity prices, which are nearly double the national average and rising faster than inflation, make heat pumps a tough sell for many Californians. A new Harvard University study found that typical households in the American South and Pacific Northwest would likely see lower utility bills by switching to heat pumps, while homes in northern Midwestern states and parts of California would see their bills increase due to the region's relatively cheap gas and high electricity costs.

Why it matters

Reaching California's climate goals amid such high electricity prices is a major challenge. While heat pumps are seen as a necessary step toward electrifying buildings and curbing greenhouse gas emissions, the upfront costs and ongoing high utility bills can discourage homeowners from making the switch, undermining the state's decarbonization strategy.

The details

California has built one of the most aggressive heat pump strategies in the country, aiming to install 6 million heat pumps in homes by 2030. The state is also moving to streamline permitting and make it easier to electrify homes. However, the Harvard study found that high residential electricity prices, which have increased by twice as much as gas prices in California over the past two decades, can make heat pumps a tough financial proposition for many homeowners, especially in counties with larger homes, colder winters, or more expensive electricity. Even in areas where heat pumps can compete with gas on operating costs, the upfront installation costs, which can reach tens of thousands of dollars, remain a major barrier.

  • Between 2001 and 2024, average retail gas prices in California have gone up by 80%.
  • Between 2001 and 2024, retail electricity rates in California, padded out with wildfire prevention costs and state-mandated social programs, have increased by twice as much as gas prices.

The players

Roxana Shafiee

An environmental science policy researcher at Harvard University.

Daniel Schrag

A Harvard environmental science professor who co-authored the recent paper on residential energy costs and heat pump adoption.

Quentin Gee

A manager at the California Energy Commission.

Lucas Davis

A UC Berkeley energy economist whose research has found that the best predictor of whether a household uses electric heating is the price of energy.

Madison Vander Klay

A California policy advocate for the Building Decarbonization Coalition, a national nonprofit that represents appliance manufacturers and utilities.

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What they’re saying

“The public is 'overwhelmed with these sorts of plans now for decarbonization: 'This by 2030,' 'this by 2050,' '”

— Roxana Shafiee, environmental science policy researcher (Harvard University)

“Gas prices have also gone up over time as well — so both are tricky when it comes to heat pumps versus, say, a gas furnace.”

— Quentin Gee, manager (California Energy Commission)

“To this day, where do we see that electric heating is the most common? Throughout the southeast. What do we know about the southeast? Cheap electricity.”

— Lucas Davis, energy economist (UC Berkeley)

What’s next

This year, state lawmakers are considering bills to speed up the local permitting process for heat pumps and to require gas utilities to offer homeowners cash to electrify their homes in lieu of replacing an old gas line.

The takeaway

California's high residential electricity prices, which have risen much faster than inflation, pose a major obstacle to the state's ambitious goals of electrifying buildings and installing millions of heat pumps. Overcoming this challenge will require a multi-pronged approach, including continued efforts to reduce upfront installation costs and find ways to make heat pumps more financially viable for homeowners, even in regions with high power bills.