August 11, 2025
Dear Mayor Lauing and Members of the Palo Alto City Council,
The undersigned organizations are writing to voice our strong support for the City of Palo Alto to adopt the 2025 CALGreen standards to encourage that all air conditioning (AC) replacements in single-family homes be upgraded to high efficiency heat pumps in order to 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 Palo Alto's Sustainability and Climate Action Plan (S/CAP) Goals to reduce emissions to 80% below 1990 levels by 2030, and achieve carbon neutrality by 2030.1 AC2HP policies are compatible with the following S/CAP Key Actions:
E1. Reduce all or nearly all greenhouse gas emissions in single-family appliances and equipment, including water heating, space heating, cooking, clothes drying, and other appliances that use natural gas,
E2. Reduce greenhouse gas emissions in non-residential equipment, including mixed-fuel rooftop packaged HVAC units, cooking equipment, and small nonresidential gas appliances, and
E7. Use codes and ordinances - such as the energy reach code, green building ordinance, zoning code, or other mandates - to facilitate electrification in both existing buildings and new-construction projects where feasible.
AC2HP policies can save Palo Alto's residents money, reduce energy consumption, and help to decarbonize existing buildings.
Heat pumps reduce emissions, air pollution and energy use
AC2HP policies not only incentivize more efficient alternatives to conventional air conditioning units, they also help to offset or completely eliminate the future use and replacement of fossil fuel powered furnaces due to the ability of heat pumps to both heat and cool homes. Additionally, unlike most furnaces on the market that are powered by fossil fuels, e.g. methane gas (so-called "natural" gas), propane, and oil, heat pumps are electrically powered. This means that heat pumps do not burn dirty fuels inside homes to be breathed or released into the atmosphere.
For the average US home, installing electric heat pumps in place of a gas furnace and gas water heater would reduce heating greenhouse gas emissions by more than 45 percent during the next 10 years.2 That is the equivalent of cutting a gas-powered car's carbon pollution by more than half. In Palo Alto, these GHG savings will be even higher because of the City of Palo Alto Utility's (CPAU) current ability to provide 100% carbon neutral electricity.3 Beyond just greenhouse reductions, heat pumps also eliminate harmful indoor and outdoor NOx pollution as well. Palo Alto's 2022 Citywide Greenhouse Gas Emission by Sector attributes 35.4% of Citywide emissions to methane gas use in buildings.4 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.5 By adopting AC2HP policy, Palo Alto would take meaningful steps to reduce this pollution, and ensure clean air for all.
In addition to being all electric, heat pumps are also extremely efficient, generally 3 - 4 times more efficient than conventional heaters and air conditioning units. Therefore, when households switch to heat pumps, they reduce emissions and reduce their monthly energy consumption and energy bills. Highly efficient electric appliances that use less energy will help cut electricity demand, and make sure we have more than enough power for all.
If Palo Alto is to achieve its ambitious goals to transition from natural gas in existing buildings to carbon-free electricity by 2045,6 the City must move quickly to enact policies to support the widespread adoption of heat pumps in homes and businesses. That's where this clean heating and cooling policy applies. By adopting locally the California Energy Commission approved air conditioner to heat pump replacement policy, Palo Alto can support its residents to begin the transition to high efficiency heat pumps for clean heating and cooling.
AC2HP policies save households time and money
Upgrading existing homes with highly-efficient heat pump systems can also save families' energy costs, which is especially important as Palo Alto residents struggle with rising energy prices. While the upfront cost of installing heat pumps is higher than conventional air conditioning, the long-term efficiency savings, along with significant financial incentives in place at the state level and through CPAU, can make these appliances more cost effective and affordable than the fossil fuel alternatives, both upfront and over the long term.7 Furthermore, residents will no longer need to replace a gas furnace, saving them potentially ten thousand dollars or more.
The best time for households to switch to a heat pump is when they need to replace their air conditioner (AC), not their furnace. Air conditioners and heat pumps are similar in price, but heat pumps can also easily replace central AC units without requiring electrical upgrades or other expenses that might come with replacing only a gas furnace. Heat pumps come with the added benefit of providing both heating and cooling, negating the necessity to replace a gas furnace down the line. Critically, an air conditioner to heat pump replacement policy can save households the hassle of potentially costly heat pump replacements for gas furnaces after 2029, when gas furnaces will no longer be sold as the Bay Area Air Quality Management District (BAAQMD) rule 9-4 on polluting furnaces goes into effect.8
Palo Alto should act quickly to get the reach code approved before October 1st
California Assembly Bill 130 has established a moratorium effective on October 1st that could prevent cities from adopting reach codes. AB 130 could therefore render Palo Alto unable to adopt its own residential building electrification standards. Therefore, it is prudent for Palo Alto to accelerate progress on creating and adopting its building code, so that code can be submitted to the Building Standards Commission and approved before the October 1st cutoff. Please move quickly and adopt the AC2HP policy in order to support Palo Alto residents to reduce emissions, air pollution and energy use, and save money. Thank you for your consideration.
| Dashiell Leeds, Conservation Coordinator Sierra Club Loma Prieta Chapter | Andrea Gara and Hilary Glann, Co-Leaders 350 Silicon Valley, Palo Alto Climate Action |
| Ben Stapleton, Executive Director USGBC California | Brian Schmidt, Executive Director Menlo Spark |
| Lauren Weston, Executive Director Acterra: Action for a Healthy Planet | Matt Vespa, Senior Attorney Earthjustice |
| Bruce Hodge, Chair Carbon Free Palo Alto | Debbie Mytels, Chair Peninsula Interfaith Climate Action |
| Cc: James Eggers, Chapter Director, Sierra Club Loma Prieta Chapter |
1 City of Palo Alto, "2022 Sustainability and Climate Action Plan," June 5, 2023
https://www.paloalto.gov/files/assets/public/v/1/sustainability/reports/2022-scap-report_final.pdf
2 The Sierra Club, New Analysis: Heat Pumps Slow Climate Change in Every Corner of the Country, April 2020
https://www.sierraclub.org/articles/2020/04/new-analysis-heat-pumps-slow-climate-change-every-corner-country
3 City of Palo Alto Utilities, "Utilities At A Glance," 2023
https://www.paloalto.gov/files/assets/public/v/5/utilities/utilities-at-a-glance-fy-2023_final.pdf
4 City of Palo Alto, "Citywide Greenhouse Gas Inventory," 2022 https://www.cityofpaloalto.org/files/assets/public/v/1/sustainability/reports/cy2022-citywide-ghg-inventory.pdf
5 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.
6 City of Palo Alto, "2022 Sustainability and Climate Action Plan," June 5, 2023 https://www.paloalto.gov/files/assets/public/v/1/sustainability/reports/2022-scap-report_final.pdf
7 Supra note 1
8 Bay Area Air Quality Management District, Regulation 9 Rule 4: Nitrogen Oxides from Natural Gas-Fired Furnaces - 2023 Amendment (Current),
https://www.baaqmd.gov/rules-and-compliance/rules/reg-9-rule-4-nitrogen-oxides-from-fan-type-residential-central-furnaces