This MTI is titled “Room Heat Pumps” (updated from “Portable/Window Heat Pumps”) because it focuses on products within the federal appliance category “room air conditioner with reverse cycle.” This category of products includes window-mounted and portable heat pumps (listed under the federal appliance category of portable air conditioners). While we prioritize window heat pumps, we recognize that the needs of certain consumers and building types will be better met with either portable heat pumps or through-the-wall heat pumps. The images below show the four main kinds of heat pumps included in this MTI.
Room heat pumps are self-contained products that provide efficient heating and cooling for small spaces, such as single rooms, modest apartments, or small homes. They offer both heating and cooling using efficient heat pump technology and can be installed without a certified technician.
Heating and cooling represent the largest energy consumption end-uses for homes in California, with more than 50% of households still using gas appliances for heating. In coordination with California’s decarbonization goals and targeted reduction in natural gas usage, room heat pumps offer an affordable and highly efficient alternative in certain applications.
The reverse operation, where air conditioners remove heat from indoor spaces and reject it outdoors, has long been utilized to keep homes cool.
Most small heat pump products on the market today are designed for mild climates; they do not have active defrost capabilities, and the compressor cutoff to shut it down is around 40°F. The New York City Housing Authority (NYCHA) Clean Heat for All Challenge aimed to change this with a cold climate specification for window heat pumps to allow efficient all-season heat pump operation in New York City. In response, manufacturers Midea and Gradient created all-weather saddlebag heat pumps designed to provide year-round heating and cooling. These products represent a leap forward in heating performance for small heat pumps with full heating capacity at 17°F and a compressor cutoff below -5°F. This advance is promising for the parts of California where winter temperatures drop significantly, although may be unnecessary for the many California consumers that live in areas with milder winters.
Integrating air filtration into these products could improve indoor air quality that would benefit all Californians, especially during wildfire season or on days with poor air quality. Yet this creates challenges around energy consumption and cost. Adding physical filtration media upstream of the fan can remove micron-sized physical particles from the air but will also increase the pressure drop of the system. To achieve the same airflow, the fan may have to use more energy to provide the same heating or cooling, thus reducing the heat pump’s efficiency. Depending on the system’s design, this may require a slightly larger fan to achieve the same desired flow rates.
Future lab testing and manufacturer engagement will help quantify the cost and energy penalty of high-efficiency air filtration for room heat pumps, and whether a specific intervention is required to create room heat pumps with air quality filtration that are affordable for both upfront and operating costs.
Market transformation (MT) works to remove structural barriers and enact strategic interventions to create lasting change in a market. MT theory is the broad conceptualization of how best to address those barriers in order to accelerate adoption of a targeted energy efficient technology or practice. The changes created by strategic interventions grow market share and pull adoption forward in time.
Figure 1 below shows the area between the Baseline Market Adoption and Total Market Adoption S-curves. The differential is the increase resulting from MT activities that deliver cost-effective energy efficiency, greenhouse gas (GHG) reductions, or other identified benefits.
Market transformation works by removing barriers through a variety of interventions. The logic model expresses a variety of moving – and dependent – parts into a single model. A carefully conceived initiative logic provides a tool for expressing and tracking program logic and is vital to successful market transformation.
Let’s take room heat pumps as an example. Our team identified ambiguous labelling as a barrier preventing consumers from making informed choices about buying a room heat pump. Some products meant to cool or heat a small space through heat pump technology lack clear identification as such. So even if consumers are interested in the efficiency of heat pumps, they are not able tell which products to choose. Without easily understandable labeling, heat pumps will most certainly struggle to find a place in the market.
A logic model not only identifies this barrier, but also any opportunities and interventions to remove it. In this case, federal testing procedures are in development for a new ENERGY STAR label. This is an opportunity to leverage strategic interventions by working with the ENERGY STAR program’s specifications and collaborating with manufacturers to ensure proper labeling of products. The projected outcomes of those interventions are included in the logic model as well. For example, this logic model seeks ENERGY STAR adoption of a new specification within two years and revised test procedures in place within three to five years.
CalMTA uses a stage gate model in its Market Transformation Initiatives (MTI) strategy and program creation. A three-phase process with end-phase stage gates (shown below) helps manage program risk, maximize the use of resources, and increase transparency in our work. Learn more about the process here.
Advancement Plan approval is the stage gate that culminates Phase I: Concept Development and the plan includes a preliminary logic model. After the research and investigation described in the Advancement Plan is complete, an updated logic model is developed for inclusion in the Phase II stage gate deliverable, the MTI Plan. Click the link below to access the draft Room Heat Pump draft logic model.
This report characterizes the California market for room heat pumps, discusses key barriers and opportunities for achieving the envisioned impacts of the MTI from demand and supply side perspectives, and informs the development of a baseline market forecast for room heat pumps.
Market transformation is a strategic process of intervening in a market to create lasting change. CalMTA developed a Market Transformation Initiative Evaluation Framework to lay out how we will track and evaluate the impact and cost-effectiveness of our MTIs. For each of our initiatives we develop a theory of market transformation and logic model that identifies expected short-term, medium-term, and long-term market outcomes resulting from strategic market interventions. Third-party evaluators will evaluate market progress based on the Market Progress Indicators and Milestones developed for each MTI.
An Outcome is the market’s response to one or more MTI’s strategic market interventions. That people buy more room heat pumps may be the end goal, but these are long-term initiatives that must be assessed over time. The end goal that doesn’t track the progress of each market intervention in the short-, mid- and long-term. Some Outcomes will be realistic in a few years, while others may take a decade to realize. For the Room Heat Pumps MTI, there are 21 Outcomes showing in the Logic Model that we would expect to see from our work.
MPIs are metrics that correspond with logic model outcomes and are used to track market progress.
Milestones are the specific expected quantitative or empirical achievements, including timing, that correspond with certain MPIs. While MPIs are used to track market progress, Milestones track specific achievements. Together, these metrics allow CalMTA assess MTI performance and identify areas that are performing differently than expected, so that the MTI can make timely course corrections, as appropriate.
CalMTA has identified several different strategic interventions necessary for transforming the market for RHPs. One of those is to influence manufacturer development of window heat pumps that meet the needs of the California market through technology challenges, demand aggregation, and ongoing manufacturer engagement. The table below shows the Outcomes we seek to achieve in the short-, medium-, and long-term time frames, along with the MPIs and Milestones we’ll use to track our impact. The Milestones will show evidence of change in the market.
Outcome | Time | Market Progress Indicators | Market Milestones |
| Manufacturers respond to specification with product plans for California-suitable products | Short (1-2 years) | Number of manufacturers engaging with CalMTA | Two manufacturers engage with CalMTA Tech Challenge by the end of 2026 |
| Multifamily building owners value product and being to purchase it | Short (1-2 years) | Number of units covered by bulk purchase agreements | Agreements in place by the end of 2026 for multifamily building owners to purchase at least 10,000 units going forward |
Availability of products that fit slider and casement windows and California-suitable temperature performance grows. Some products are available with air filtration capability. | Medium (3-5 years) | Number of Type 2 and Type 3 products for sliding and casement windows available for purchase | Three RHP Type 2 or Type 3 products for sliding and casement windows become available for purchase by 2030 |
Medium (3-5 years) | Number of RHP products with air filtration capabilities available for purchase | Three RHP products with air filtration available by 2030 |
Watch the Idea to Initiative Part 2 section of the Oct. 25 Market Transformation Advisory Board meeting to learn more about the Market Progress Indicators for the Room Heat Pumps Initiative.
The Total System Benefit (TSB) is the dollar-value metric that measures energy savings, grid benefits and reliability, and greenhouse gas (GHG) impacts. In 2021 the California Public Utilities Commission (CPUC) announced its intention to use this approach to evaluate the State’s energy efficiency programs to better align them with GHG emissions reduction, support for customer equity, and long-term grid stability. In the past, the CPUC’s dollar-value metrics had been based on kilowatt-hours, kilowatts, and therms, but this new TSB approach encourages programs to target high-value load reductions without directly comparing one fuel source against another (i.e., gas vs. electricity). It focuses on the benefits to the “total system” – including residents’ health and environmental concerns – rather than one particular fuel source. The CPUC officially adopted this new approach in 2024.
As California’s first Market Transformation Administrator, CalMTA is working to create energy efficiency initiatives that will transform the market. A crucial part of that work is understanding just how much a particular initiative will benefit California. While our market transformation initiatives (MTIs) seek to generate energy savings and related benefits by accelerating and increasing market adoption of energy-efficient technologies and practices, we need to evaluate those MTIs carefully.
TSB helps us measure our MTIs’ impact. Carefully estimating the energy impacts and cost-effectiveness of an MTI is crucial to understanding it and its value to Californians. Good estimates require developing a forecasting model that uses a set of inputs based on well-documented sources, methods, and assumptions. Getting the TSB right is as much about good research as it is about good math.
The Room Heat Pump initiative is estimated to deliver approximately $521 million in TSB from 2024-2045. Most of these benefits come from greenhouse gas emission reductions associated with product efficiency and fuel substitution, especially in later years of the MTI – after more California-appropriate RHP models become available and market adoption accelerates.
Submitting your idea to CalMTA is an opportunity to shape and influence the way California spends ratepayer dollars to meet our climate and energy efficiency goals an Not only do our initiatives need to demonstrate a beneficial TSB; they need to be cost effective. Cost-effectiveness is measured by comparing the initiative’s benefits with the costs. Various tests are used to provide different information about the impacts of the initiative from distinct vantage points. Together, these tests provide a comprehensive picture of the initiative’s cost-effectiveness:
The Room Heat Pump Initiative is estimated to be cost-effective under all test perspectives.
| TRC | PAC | SCT |
| 5.46 | 8.29 | 11.2 |
More details about cost-effectiveness are available in Appendix B of the Room Heat Pumps MTI Plan.
CalMTA has forecasted the baseline market adoption (BMA) and total market adoption (TMA) of RHPs. BMA represents the expected “naturally occurring” market adoption, considering current and expected market, and regulatory and technological trends. Total Market Adoption (TMA) includes the additional adoption resulting from strategic interventions detailed in this MTI plan.
The following strategic interventions have an equity consideration:
The California Market Transformation Administrator (CalMTA) develops and manages market transformation initiatives in the state to reduce energy use and reduce greenhouse gas (GHG) emissions.
CalMTA follows a rigorous process for reviewing, scoring, and then developing relevant, timely market transformation initiatives. The process supports market transformation initiative creation from concept to program development to market deployment, as well as the eventual exiting of the market.
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