November 4, 2025
Dear Mayor Hudes and Los Gatos Councilmembers,
The undersigned organizations are writing to voice our strong support for adoption of the 2025 CALGreen reach code to encourage that all air conditioning (AC) replacements in single-family homes include both cooling and heating modes. These two-way ACs, commonly known as heat pumps, reduce climate pollution and lower energy costs. Our communities are already directly experiencing the impacts of the climate crisis, and the time for bold action is now.
The policy, often referred to as an Air Conditioner to Heat Pump Replacement Policy or “AC2HP” code, is in line with Los Gatos’ sustainability goals. With available incentives, the upfront cost of a heat pump is equivalent to AC replacement, and the superior efficiency of heat pumps can provide monthly bill savings, making this policy a win-win for Los Gatos.
AC2HP Policies Support Los Gatos’ General Plan Goals and Policies
The Los Gatos General Plan Goal ENV-9 states that the Town should “support local and regional efforts in the Town’s response to climate change.” The adoption of AC2HP building codes is supported by numerous policies within this goal, including the following policies.
ENV-9.3 Support Climate Change Initiatives: Support initiatives, legislation, and actions to respond to climate change.
ENV-9.6 Energy Conservation and Renewable Energy Use: Promote energy conservation in business and residential uses by encouraging installation of fixture and appliance upgrades, installation of solar panels, and other retrofits to existing structures.
ENV-9.10 Encourage and Incentivize Alternative Fuels: Support the use of non-polluting fuels by encouraging the inclusion of facilities for alternative fuels in new public and private developments and by offering incentives to encourage retrofits.
ENV-9.11 Green Building: Foster awareness and encourage adoption of green building practices that include the design and development of environmentally responsible commercial and residential development and retrofits.
ENV-9.13 Regional Green Building Programs: Coordinate with other local governments, special districts, nonprofits, and other public organizations to share resources, achieve economies of scale, and develop green building policies and programs that are optimized on a regional scale.
Heat Pumps Reduce Greenhouse Gas Emissions and Air Pollution
AC2HP policies not only incentivize appliances with twice the functionality of conventional air conditioning units, they also help to offset or completely eliminate the use and future replacement of fossil fuel powered furnaces, because heat pumps can both heat and cool homes.
A heat pump with a backup furnace uses about 95% less gas compared to a conventional air conditioner paired with a gas furnace. Greenhouse gas emissions are reduced significantly in the first year, and over the life of the appliance, emissions will continue to decline toward zero as the electric grid is decarbonized.
Beyond just greenhouse gas emission reductions, heat pumps also eliminate harmful indoor and outdoor nitrogen oxides (NOx), which cause smog. This local air pollution worsens many health conditions, such as asthma. Malfunctioning gas furnaces can also cause fatal carbon monoxide poisoning. Based on national trends, outdoor air pollution disproportionately impacts low income and Black, Indigenous and People of Color (BIPOC) communities, as non-white racial and ethnic groups are disproportionately exposed to ozone and other criteria pollutants such as NOx, PM2.5, and CO.1 By adopting AC2HP policy, Los Gatos would take meaningful steps to reduce this pollution, and ensure clean air for all.
AC2HP Policies Can Save Households Money on Monthly Energy Bills
The best time for households to switch to a heat pump is when they need to replace their air conditioner, rather than when they need to replace their furnace. This is because an existing AC system has the necessary electric wiring and capacity in place to allow for a drop-in replacement with a heat pump. In contrast, replacing a gas furnace with a heat pump could require electric upgrades that could make installation more costly.
However, when air conditioners fail, HVAC contractors often recommend like-for-like replacements, depriving customers of the opportunity to instead install a heat pump which displaces polluting gas heating and the need for an expensive furnace replacement later. While the initial cost of installing two-way heat pumps is about $2,000 more than one-way air conditioning, the significant financial incentives in place at the state level and through the Silicon Valley Clean Energy Community Choice Aggregator can actually make these appliances more affordable for Los Gatos residents.2 Furthermore, eliminating the need to replace a gas furnace will avoid thousands of dollars in future costs.
In addition to being all electric, heat pumps are also extremely efficient, generally 3 to 4 times more so than conventional gas furnaces. This means that when households make the switch to heat pumps, they can reduce their monthly energy consumption and utility bills.
We urge you to adopt the AC2HP reach code to further Los Gatos’ progress in reducing air and climate pollution and helping residents save money on their energy bills. We support additional efforts to make permitting for these appliance replacements quicker and easier for residents.
Thank you for your consideration.
Sincerely,
Dashiell Leeds
Conservation Coordinator
Sierra Club Loma Prieta Chapter
1 Timothy Q. Donaghy et al., “Fossil fuel racism in the United States: How phasing out coal, oil, and gas can protect communities," Energy Research & Social Science 100:103104, June 2023.
2 Silicon Valley Clean Energy, Home Rebates, https://svcleanenergy.org/home-rebates/