In 2024, Americans bought 32 percent more heat pumps than gas furnaces, and that margin was the biggest gap ever recorded between the two technologies. Across single-family and multifamily residential construction, the majority of new buildings are now heated electrically, a milestone that would have seemed implausible ten years ago. New York State entered 2026 requiring that all new buildings up to seven stories run on electricity. California’s updated energy code makes heat pumps the default compliance path for new commercial construction. These are not distant predictions about where the market is heading. This is what new construction looks like right now, in market after market, and it is arriving faster than most project owners in the middle of the country realize.

The shift is not primarily ideological. What is driving it is a convergence of practical, financial, and regulatory forces that have changed the calculus on how mechanical systems get specified. Gas prices rose 11.7 percent from September 2024 to September 2025, more than twice the rate of electricity and nearly four times the rate of overall inflation. That gap is not temporary noise. It reflects a structural reality: gas utilities have dramatically increased their spending on pipeline infrastructure since the mid-2010s, and those costs flow directly to customers through monthly bills. Meanwhile, heat pump technology has advanced to the point where modern cold-climate units operate effectively at temperatures as low as minus twelve degrees Fahrenheit, eliminating the argument that this technology only works in mild climates. Churches in the Midwest, hotels in the northern plains, and commercial developers in markets well outside the coasts are finding that the financial and operational case for electric heating is stronger than it has ever been.

What Changed and Why It Happened Fast

A decade ago, the conversation about building electrification lived mostly in the realm of policy advocacy and voluntary sustainability targets. What changed is that the market moved, the technology matured, and the policy environment shifted in ways that made all-electric the path of least resistance in a growing number of jurisdictions. The Inflation Reduction Act of 2022 created substantial incentives for commercial building electrification, including deductions tied to energy-efficient new construction and renovation. Though some of those federal credits have since been modified, the state-level landscape has continued to fill the gaps. California, New York, Colorado, and more than a dozen other states have extended requirements or eliminated the subsidies that once made gas hookups artificially cheap. The effect is that building owners who treated a gas connection as the obvious, low-cost default are increasingly finding that assumption no longer holds.

The contractor workforce has followed the market. A 2025 survey published by ACHR News found that 58 percent of HVAC installers reported putting in more heat pumps than they had three years earlier, and 71 percent expected heat pumps to make up a larger fraction of their projects in the next three years. That kind of industry-wide reorientation matters for how we think about construction timelines and subcontractor availability. When a technology shifts from specialty to mainstream, lead times for equipment and experienced installers change accordingly, and those changes have direct implications for how early mechanical decisions need to be made during design. Owners who wait until the construction document phase to have this conversation are arriving late, and late conversations in architecture tend to be expensive ones.

The regulatory landscape varies by region and continues to evolve, which means project owners need to understand their specific jurisdiction rather than assuming the rules are either nonexistent or all-encompassing. New York State’s All-Electric Buildings Act took effect January 1, 2026, requiring that most newly constructed buildings under seven stories be fully electric, with a second phase covering all new construction including large commercial buildings by late 2028. California’s updated energy code makes heat pumps the baseline compliance path for new commercial and multifamily projects, allowing gas but requiring compensating efficiency measures elsewhere in the design to offset it. Other states are moving more incrementally, but the direction is consistent: building codes and utility rate structures are being adjusted to reflect the real cost of maintaining gas infrastructure. Even in markets where no mandate currently exists, the combination of rising gas costs and falling heat pump prices has made the comparison worth doing on every new project.

What the Design Process Has to Account For Now

The practical implications of an all-electric building show up in the architect’s drawing set in specific, concrete ways that have to be addressed well before design development begins. The most immediate is electrical service sizing. An all-electric building requires significantly larger electrical service than a comparable building that uses gas for heating, hot water, and cooking. For a church campus, a hotel, or a commercial building of any real size, that can mean coordinating with the utility for a service upgrade, which carries its own lead time and cost. That conversation does not happen automatically. It happens because someone in the pre-design process asked the right question and engaged the mechanical engineer early enough to factor the answer into the program. Leaving it until the construction document phase means discovering a transformer cost or a utility schedule conflict at exactly the wrong moment, which is the kind of problem that good pre-design coordination is supposed to prevent.

The elimination of combustion equipment also changes the building’s physical design in ways that are less obvious but equally real. Gas-fired equipment requires flues, gas meters, and in some cases dedicated mechanical rooms with specific ventilation and clearance requirements. Remove those from the program and you recover usable space, simplify coordination between trades, and reduce the number of systems that require ongoing inspection and maintenance. All-electric mechanical systems also offer more flexibility in equipment placement than combustion systems do, since heat pump units do not require running flue paths through the building’s structure. For renovation projects in particular, where cutting new flue chases through an existing building is one of the more expensive and disruptive aspects of any mechanical upgrade, that difference can change the financial case for a project entirely.

For church clients and nonprofit organizations with tight operating budgets, the long-term financial picture matters as much as first cost. Heat pumps operate by moving heat rather than generating it, which means they deliver significantly more usable energy per unit of electricity consumed than a gas furnace or boiler produces per unit of fuel. A well-designed all-electric system in a new church or community facility can reduce mechanical operating costs over the life of the building in ways that compound over a 40- or 50-year facility life. When we work through long-range campus and facility planning with a congregation or nonprofit, operating cost per square foot belongs in that program conversation alongside occupancy counts and parking ratios. The mechanical strategy is part of what defines what the building will cost to own.

For hotel and hospitality clients, consistent guest comfort and reliable hot water delivery are the performance standards that matter most, and modern commercial heat pump systems meet those standards in virtually every climate where hotel development is occurring. VRF air systems, heat pump water heaters, and high-performance building envelopes have become standard practice in hospitality construction across many markets. The question is no longer whether all-electric systems can perform at the required level, but whether the design team is experienced enough with the technology to coordinate, specify, and document it correctly. That requires mechanical engineering involvement that starts in schematic design, not in the bid package.

For commercial developers evaluating a new project, the issue extends beyond operating cost to the asset’s long-term value. Institutional lenders and long-term investors are increasingly asking about energy performance as part of underwriting, and buildings locked into gas infrastructure carry growing uncertainty as utility rate structures continue to shift. That uncertainty is not hypothetical. It is priced into the cost and availability of gas service in ways that will compound over a 20- or 30-year hold period. Designing for long-term energy flexibility has become a financial question as much as a sustainability one, and the two are no longer as easy to separate as they once were.

At UNITE, we are having this conversation earlier in the design process than we were two years ago, and the reason is straightforward. Whether to connect to a gas line is a programming decision, not a mechanical detail, and it shapes the electrical service sizing, the structural loads for rooftop equipment, and the long-term operating cost of everything the owner builds. Clients who engage this question during the early stages of project definition end up with more options, better bids, and fewer surprises down the road. That kind of upstream problem-solving, starting with the questions most owners do not yet know to ask, is exactly what we bring to every project we take on. If you are planning a new building or a significant renovation and have not yet had a direct conversation about your mechanical strategy, that is a good place to start, and we are ready for that conversation.