How California fueled innovation in its heat pump market
The Challenge
Large-scale incentive programs play a critical role in accelerating market transformation in the clean energy industry, but they often fail to address local barriers to adopting new technology. Financial support alone is not enough to scale decarbonization solutions equitably.
The Solution
VEIC administered a Quick Start Grant program on behalf of TECH Clean California to complement broad-scale efforts and fill gaps at the local level. These grants created space for community voices to address the challenges close to home through innovative real-world solutions. Capabilities: Decarbonization Planning
The Impact
Thanks to flexible funding, grantees were able to design and test innovative approaches to driving heat pump awareness and adoption in their communities. From July 2021 to December 2024, the Quick Start Grant program enabled over 500 heat pump installations that are benefiting 922 households, many of which are low-income.
California is no beginner when it comes to scaling clean energy technologies. The state's investments in electric vehicles and solar have been instrumental in driving adoption and public acceptance. But while large-scale initiatives like incentive programs have successfully expanded participation, they often overlook the complex, interconnected barriers preventing underserved communities from transitioning to clean energy.
This challenge is clear in the heat pump market. Everyone can benefit from the efficiency, sustainability, and comfort that heat pumps provide. But the models and programs that work in many communities may fail in others. For example, low-income homeowners often face significant repair costs before they can install heat pumps, making the transition significantly less affordable. Renters in multifamily buildings experience additional hurdles due to more complicated installations. Accelerating heat pump adoption equitably requires more than just financial incentives—it takes local engagement and tailored solutions. And that's exactly what TECH Clean California set out to provide.
Laying the groundwork for equitable heat pump adoption
TECH Clean California is a market transformation initiative that aims to accelerate the transition to heat pumps and heat pump water heaters through incentives, pilots, technical assistance, and trainings. One program under its umbrella is Quick Start Grants, which VEIC was selected to administer. Quick Start Grants are an ideal complement to California's large-scale initiatives because they support more precise and flexible programs, ensuring underserved communities don't get left behind.
Quick Start Grants offer strategic investments in fast-moving, innovative projects that focus on solutions for low-income households or underserved communities. Over the three-year program span, VEIC awarded $3.85 million to 19 projects on behalf of TECH Clean California. The projects covered everything from technology field testing to marketing and education campaigns. By targeting at the local level, Quick Start Grants invite community voices to come forward and address barriers in their own backyard. Here are a few of the ways grantees are breaking down barriers.
Creating customizable systems with plug-and-play ease
Many central heat pump hot water systems on the market aren't suited for smaller multifamily buildings. These buildings need custom systems, which are time-consuming to design and challenging for plumbers with limited heat pump experience to install correctly. Small Planet Supply wanted to change that.
Small Planet Supply used a Quick Start Grant to create a pre-designed central heat pump boiler system that runs on natural refrigerants. They installed this system into a new, 40-unit, low-income farmworker family community developed by the Housing Authority of Kern County. Though the team encountered challenges—like working in buildings pre-designed to fit smaller gas boiler systems—the flexible funding of Quick Start Grants allowed them to pivot as needed. Now residents have safer, more efficient systems and owners of similar buildings have a new option to make electrification easier.
Folding heat pump installations into existing programs
Innovation isn't just about technology—it includes processes, too. And the Sacramento Home Energy Equity Pilot proved that. The Sacramento Municipal Utility District (SMUD) and the City of Sacramento used a Quick Start Grant to pilot a new method of installing heat pumps and weatherization upgrades in income-qualified homes.
There are many barriers to installing heat pumps in low-income communities, including low awareness about the technology, high up-front costs, and difficult rebate processes. The teams addressed several of these obstacles by taking a neighborhood-level approach and integrating heat pump technology deployment into an existing anti-displacement and home rehabilitation program. The combined approach allowed participants to easily access and benefit from the more comfortable, energy-efficient, and sustainable heat pump systems while also addressing code violations and making their homes safer.
The program was so popular that the City of Sacramento needed to scale back its outreach campaign to prevent over-recruitment, which can erode community trust. The Home Energy Equity Pilot exceeded its original goals, reaching 22 homes with decarbonization improvements, including 22 heat pump HVAC units and 11 heat pump water heaters. Many participants received additional free energy-efficiency and electrification improvements that will lower their energy costs for years to come. Outside of direct program benefits, the pilot also provided a successful model for layering multiple programs to provide comprehensive services to residents.
Tailoring education and outreach to underserved communities
The Diversity Coalition used their Quick Start Grant to help scale decarbonization technology equitably. They realized that many messages around electrification from state, city, and utility marketing don't adequately consider the background context of low-income communities or communities of color. Using Quick Start Grant funding, the Diversity Coalition tailored educational messaging to these communities, developing a playbook of messaging strategies to help electrify all California homes.
The team of community-based organizations developed print marketing materials and social media outreach on the holistic benefits of energy conservation and electrification. The team also directly engaged target communities by tabling at community events and connecting households to the electrification process. Other organizations can now access all of the Diversity Coalition's learnings and resources on their Electrification for Everyone webpage.
From exploration to impact: the power of Quick Start Grants
At the program’s conclusion, it met all its goals and led to the installation of over 500 heat pumps, reducing greenhouse gas emissions by 142 metric tons annually. The program also directed 83% of its funds towards equity-focused projects supporting low-income households, disadvantaged communities, renters, and mobile home residents.
Though the Quick Start Grant program has ended, the innovative solutions it fostered offer essential lessons for equitable clean energy adoption moving forward. As California works to expand the heat pump market to meet bold climate goals, targeted programs like Quick Start Grants will be a crucial complement to large-scale efforts. By prioritizing flexibility, community engagement, and locally driven strategies, future initiatives can ensure that all Californians benefit from the clean energy transition. Read the final report here.
