When heat waves descended on California this summer, Shreyas Sudhakar, founder and chief executive officer of heat pump installation firm Vayu, took his chance.
Just 54 percent of homes in the state have central air-conditioning, but rising temperatures are making cooling a must-have. Sudhakar saw the hot weather as an opportunity to sign up multiple households to a heat pump “group-buy” scheme, offering them a chance to purchase technology that provides carbon-free heating and cooling at a discount. After advertising the venture online, he was flooded with queries.
Heat pumps often cost more than cooling-only air conditioners, which is why adoption hasn’t been more widespread in the US. But the group-buy approach offers would-be purchasers a bulk discount that can defray part of the cost. Group-buys also mean installers can line up a tidy string of jobs—a win-win potentially enabling whole neighborhoods to switch to heat pumps.
Along with heat pump marketplace VoltHub, Vayu launched the first California Heat Pump Group Buy last year. “Nobody, to our knowledge, had done it in California,” recalls Sudhakar. “We thought, ‘Let’s try it out.’” The program is available around Los Angeles and the Bay Area.
Air-source heat pumps run on electricity. They work by harvesting heat from outside air and distributing it indoors, or gathering excess internal heat and dumping it outside.
This isn’t exactly rocket science. Except, perhaps, to a former rocket propulsion engineer.
“I tell people this all the time,” laughs Sudhakar, who previously designed rocket engines at Blue Origin. “At the end of the day, it’s a bunch of pipes and a heat exchanger moving energy from one place to another.”
Among the first group of roughly 10 customers in the initial group-buy scheme was Naoya Kanai, a data scientist who lives with his wife and toddler in the Bay Area city of San Mateo. Kanai stumbled on the group-buy online and jumped at the chance, knowing that federal rebates for carbon-free appliances would soon disappear under the Trump administration.
“It was one of the most affordable ways to get a quality system,” he says of the program. Kanai recalls thinking, “I can really sell it to my spouse.”
Once households are signed up to the group-buy, Sudhakar and his colleagues work out what equipment they’ll need for each installation. Then, they shop around for deals from distributors so they can make offers to participants. “We’re looking for what is the best value across the entire group,” he adds. “Typically, we’re getting 15 to 30 percent discounts on the equipment.”
Kanai’s house is a two-story 1980s suburban home that has about 2,500 square feet of space. The new heat pump system cost roughly $14,500 and provides heating and cooling via ductwork that was already in place. Kanai says the flow of temperature-controlled air is much more comfortable and steady compared to his old gas furnace and air conditioner. He’s barely noticed this summer’s heat waves until going outside. “A lot of times we’ll step out the front door [and realize] ‘Oh, wow, it was actually really hot today.’”
Other group-buy programs are available across North America, with one of the oldest operational programs on Gabriola Island, British Columbia, a 58-square-kilometer land mass home to about 4,500 people. In 2010, a group called Energy Gabriola set itself up as a heat pump dealer via a distributor, so it could buy heat pumps in bulk and sell them at cost. This was possible because, until that point, there was no heat pump market or installation service on the island whatsoever.
Relying partly on volunteers, the group has installed more than 1,000 heat pumps to date, electrifying nearly half of the island’s households. “We think we’re the heat pump capital of Canada,” says Steven Earle, of Vancouver Island University, who is involved in Energy Gabriola.
Energy Gabriola had a relatively easy time because there were no installers to compete with. “Any other place where there are already people doing this, I’m pretty sure they wouldn’t tolerate that,” Earle says.
Enthusiasm can also be weather-dependent. Sudhakar and his colleagues attempted a group-buy in early 2026, but he says it was “a total flop” due to lack of interest. Then, those heat waves hit California over the summer.
“What we learned through that is we do need to promote this stuff when people have the external trigger,” he says. “The weather is our natural partner.”
With a renewed group-buy scheme on offer during the hotter weather, queries flowed again. Now, another 10 to 15 households are in line to get a heat pump in the next few months. Sudhakar hopes to scale up these numbers in the coming years.
“It’s a good idea,” says Andrew Sissons, director for a sustainable future at Nesta, a charity in the UK that promotes policy innovations.
Seeing neighbors install heat pumps can convince others on the block to do the same. “That’s a really important effect,” says Sissons, saying such ventures can build “social contagion”—the same phenomenon that makes people want to install solar panels after seeing them on their neighbors’ roofs.
However, he cautions that high-quality installations and good aftercare are needed ensure the positivity lasts. Because every home generally requires a slightly different system, it’s key to ensure that participants don’t get stuck with a heat pump that’s ill-suited to their needs.
Sudhakar says that he has three or four installation designs that he matches to most homes. But they might not work for older properties without ductwork or those with asbestos-laden ducts that require remediation. These wouldn’t be a good fit for the group-buy, says Sudhakar, though they could still get a heat pump through a more bespoke installation.
As for the quality of the heat pumps themselves, most of the models Sudhakar recommends have a cooling efficiency rating that would be considered good. Another key measure of efficiency called coefficient of performance refers to the number of kilowatt-hours of heat the system produces per kilowatt-hour of electricity it consumes. The higher this number is, the more likely it is that a heat pump will cost less to run than a gas furnace. That’s particularly important in a place like California, where electricity is notoriously expensive.
Although some case studies have found heat pumps cost less to run than gas furnaces when factoring in installation costs, this is not always the case. Roxana Shafiee at the Harvard University Center for the Environment says that group-buy schemes may not be able to overcome this problem, except with the most efficient installations. She and colleagues have studied energy consumption data in colder areas of the US and worked out that heat pumps could end up costing some households more to run than gas-based heating.
“We still see bill increases in a lot of cases,” she says. “It depends where you are.”
Kanai, for one, “crunched some numbers on an Excel spreadsheet” and found that his new heat pump would probably not cost much more to operate than a gas furnace.
Some people aren’t too worried about the running costs. “We didn’t do it for the payback, we did it for the environment,” says Paul Holroyd, a resident of Ottawa, Ontario. He found a heat pump group-buy scheme offered by a company called Fern, which he says stood out because of the apparent expertise of those running it. In total, he spent almost $20,000 CAD. The group-buy meant he got a roughly 7 percent discount, he estimates.
“Not huge but it all helps,” says Holroyd.
Being part of something that could encourage the wider adoption of heat pumps was also a motivator. Holroyd has recently watched as the skies above Ontario turned orange due to smoke from massive wildfires in Canada.
“If we can be part of a process that gets more people into doing things for the environment, like heat pumps and solar,” he says, “I think that’s a good thing.”
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