3H Hybrid Heat Homes: An Incentive Program to Electrify Space Heating and Reduce Energy Bills in American Homes

Heat pumps are a critical technology on the path to net-zero emissions, but their deployment to date has been slow. This document proposes a low-barrier, least-cost policy package to rapidly deploy efficient space heating and cooling solutions in the United States. It aims to “raise the floor” for electric space heating in the residential HVAC market, delivering 45 million new installations over 10 years and paving the way for more ambitious decarbonization efforts.

Residential heating and cooling account for 51% of household energy use and 40% of household energy bills in the US. Inefficient gas and electric resistance furnaces and air conditioners (ACs) account for more than 80% of all products currently in use. Heat pumps, which can provide both cooling and heating services, are up to four times more efficient than traditional equipment and have the potential to save consumers money on their energy bills and reduce greenhouse gas emissions.

The 3H Hybrid Heat Homes program aims to maximize the speed and scale of heat pump technology deployment in U.S. homes at the least cost and with the fewest barriers to market adoption. Over a ten-year period, the program will save Americans more than $27 billion on their energy bills and deliver $80 billion in additional societal benefits.