Smart Heat Pumps for Old Buildings: Gradient's Retrofit Revolution [2025]

The Hidden Problem with Old Buildings

Walking into a pre-1970s apartment in New York City, Chicago, or Boston feels like entering a climate-control paradox. The radiator hisses at full blast in January while sweat drips down your forehead. Fast forward to summer, and you're searching for the one working fan while neighbors blast window units. These buildings weren't designed for modern comfort expectations, and their massive steam boiler systems are becoming increasingly obsolete.

The problem is systemic. Thousands of older multifamily buildings across North America face the same brutal choice: spend

This is where the real innovation lives. Not in flashy consumer gadgets, but in solving the unglamorous infrastructure problems that affect millions of people daily.

TL; DR

• Window-mounted heat pumps install in hours without electrical upgrades, solving the retrofit bottleneck for aging multifamily buildings
• Nexus software coordinates multiple units across buildings, reducing peak electrical demand by up to 25% through intelligent thermal management
• Grid demand response capabilities help prevent brownouts by reducing AC load during peak demand periods while maintaining tenant comfort
• Cost advantage makes heat pump retrofits 40-60% cheaper than traditional HVAC replacements, unlocking climate upgrades for buildings that couldn't otherwise afford them
• Real-world results show energy consumption drops of 25% in pilot programs when building managers set thermal guardrails, with additional HVAC upgrades often unnecessary

The NYCHA pilot showed energy reductions of 15-30% and significant comfort improvements, while the Tracy pilot achieved a 22% peak demand reduction during a heat wave. Estimated data for energy reduction is averaged.

Understanding Window Heat Pumps: The Physics Behind the Design

At first glance, a window heat pump looks like a beefier version of the air conditioners your parents installed in the 1990s. But the engineering is fundamentally different, and that difference matters.

Traditional window AC units work through a simple principle: pull warm air from inside, cool it by running it over a cold coil, and dump the heat outside. They're one-way systems. Heat pumps reverse this logic during winter, pulling heat from outside air and pushing it indoors. Even when outdoor temperatures drop below freezing, there's still thermal energy available—thermodynamic heat pumps extract it and move it where you need it.

The horseshoe shape Gradient uses isn't arbitrary. It keeps the unit flush with the window frame, maintaining sightlines and eliminating that claustrophobic blocked-window feeling that makes people hate traditional ACs. The design also improves installation speed dramatically. Instead of removing windows, cutting through walls, and running refrigerant lines, installation crews simply mount the unit and plug it in.

How the thermodynamic cycle works:

The refrigerant inside undergoes a four-stage cycle. It starts as a low-pressure gas, gets compressed into a high-pressure gas by the compressor, condenses into liquid in the outdoor coil (releasing heat), and then expands back into a low-pressure gas in the indoor coil (absorbing heat). During cooling mode, this cycle runs forward. During heating mode, it reverses. The efficiency gain comes from moving thermal energy rather than generating it from electricity, achieving coefficient of performance (COP) values between 2.5 and 4.0 depending on outdoor temperature.

For a unit with COP of 3.0, every kilowatt of electricity consumed moves three kilowatts of thermal energy. That's why electrification advocates point to heat pumps as the key to decarbonizing heating. Instead of burning fossil fuels, you're using electricity to move heat. And as grids shift toward renewables, that electricity becomes increasingly clean.

But there's a practical problem that software can solve: coordination. Install one unit in a 50-unit building, and it works great. Install units in 20 apartments across the same building, and suddenly you've created a distributed heating and cooling system with no central intelligence. Units fight each other. One apartment cranks AC while the adjacent unit heats. Peak electrical demand spikes when everyone turns units on simultaneously.

Window heat pump retrofits offer a more favorable payback period of 5-7 years compared to traditional HVAC systems, especially when factoring in utility rebates. Estimated data.

The Nexus Software Revolution: From Isolated Units to Coordinated Systems

This is where Gradient's real innovation emerges. The Nexus software treats a building's distributed heat pumps as a coordinated system rather than isolated appliances.

Think of it like an intelligent building nervous system. Each unit has sensors monitoring indoor temperature, outdoor temperature, occupancy, and electrical load. The Nexus platform collects this data and makes real-time decisions about which units to activate, which to dial back, and how to distribute heating and cooling loads across the building.

The most immediate benefit is energy reduction. In one documented pilot, a building manager set a heating guardrail at 78 degrees Fahrenheit. Instead of individual thermostats competing, the Nexus system maintained that temperature while coordinating unit operation. The next day, energy consumption dropped by 25 percent. No tenants complained. No comfort was sacrificed. The system simply eliminated waste.

How does it achieve this? Through several coordinated strategies:

Thermal load balancing across units: The system understands that a south-facing apartment receives more solar heat than a north-facing unit. Rather than letting each apartment maintain identical setpoints independently, Nexus can allow the north-facing unit to cool while holding the south-facing unit slightly warmer, exchanging thermal energy through the building structure itself. This reduces compressor cycles and total energy consumption.

Predictive demand response: Building-integrated weather data and historical usage patterns let Nexus predict when peak demand periods will occur. Before an afternoon heat wave hits, the system pre-cools certain units to lower indoor temperatures by just one or two degrees. When the peak arrives, those units require less active cooling, reducing instantaneous electrical demand.

Staggered startup sequences: When a building has eight units and everyone gets home at 6 PM wanting cooling, all eight compressors shouldn't start simultaneously. Nexus staggers startup, spreading the electrical load across a 10-15 minute window. This prevents demand spikes that trigger utility fees and reduces stress on older electrical infrastructure.

Grid integration signaling: When the electrical grid experiences high demand (typically 3-6 PM on hot summer days), utility companies send signals to building systems asking them to reduce consumption. Nexus can automatically dial back AC in units on shaded sides of buildings while maintaining comfort through passive cooling and the thermal mass of the structure. Occupants never notice, but the grid stays stable.

The interface building managers use is deliberately simple. Rather than staring at 50 individual unit controls, they set building-level guardrails: minimum temperature, maximum temperature, optional "eco mode" settings. The software handles the complexity underneath.

Installation and Integration: Why Hours, Not Weeks

This is where window heat pumps overcome the practical barrier that's blocked building retrofits for decades.

Traditional minisplit HVAC systems require several steps. First, a contractor assesses electrical capacity. Older buildings often run 100-200 amp service panels designed when peak demand meant a few appliances running simultaneously. Modern heat pump systems need dedicated circuits, sometimes 30-60 amps per unit. This triggers a cascade of problems: panel upgrades, new wiring runs, electrician availability, permits, utility company coordination.

Second, refrigerant lines need to be run between indoor and outdoor units. These can't be jury-rigged through existing wall cavities. You're typically cutting holes, running lines, and patching walls. In 40-unit buildings, this means 40 separate installation events, coordination nightmares, and tenant disruptions.

Window heat pumps eliminate most of this friction.

A Gradient unit ships pre-charged with refrigerant. Installation is three steps: mount the unit in the window frame, secure it, and plug it into any standard 120V or 240V outlet. A single technician can install three to five units per day in an apartment building. No electrical upgrades. No cutting walls. No coordinating utility company callbacks.

For buildings with extremely limited electrical capacity, Nexus software adds another layer of elegance. Instead of forcing electrical upgrades, the system intelligently manages electrical draws across units. If a building has a 30-amp panel with limited spare capacity, Nexus ensures that not every unit draws maximum power simultaneously. It staggers compressor operation, prioritizing occupied units, and allows some units to coast on lower cooling/heating power while occupied rooms reach setpoint first.

For a 50-unit building with 20 heat pump installations, this might mean the difference between a $15,000 electrical upgrade or none at all. Multiply that across thousands of buildings, and you're looking at billions of dollars in unlock value—buildings that couldn't otherwise afford HVAC modernization now become feasible retrofits.

Window heat pumps can be installed in approximately 3 hours, whereas minisplits typically require around 12 hours, highlighting the simplicity and speed of window unit installations. Estimated data.

The Multifamily Building Market: An Ignored Goldmine

Gradient's focus on multifamily buildings isn't incidental. It's where the problem and opportunity align most dramatically.

The US has roughly 1.2 million multifamily buildings, and a huge fraction are pre-1980 construction. These buildings are essentially unchanged since their original construction. The heating system is whatever was installed 40-60 years ago. Many still use steam boilers, gravity-fed heating systems that are nightmarish to control and increasingly dangerous as boilers age past their design life.

Building managers face a grim decision tree. Replacing a boiler costs

Meanwhile, the residential housing market is reshaping due to climate change. Cities are experiencing longer, hotter summers. The historic cooling season is expanding. Apartments without air conditioning are becoming genuinely uninhabitable during heat waves. Heat-related mortality is rising fastest in older, less-wealthy communities—exactly the populations living in older multifamily buildings. This creates both a humanitarian imperative and a market opportunity.

Gradient has already begun partnerships that prove market viability. The New York City Housing Authority operates roughly 175,000 apartments across 2,700 buildings. Many of these are older, rent-stabilized housing where residents can't afford private HVAC solutions. Installing window heat pumps in NYCHA buildings means cooling-strapped tenants finally get summer comfort without astronomically expensive private units. Building managers get enhanced operational efficiency and reduced energy costs. The NYCHA gets a proof-of-concept for large-scale retrofits.

The Tracy, California pilot in a two-story affordable housing complex demonstrates the economics in detail. The housing authority wanted to address summer heat without triggering electrical grid strain. Window heat pumps solved both simultaneously, installed in a matter of days rather than months, with minimal infrastructure requirements.

Colleges and universities represent another massive market segment. Dormitory heating and cooling has been a perennial problem. Older dorms were built in eras when student housing didn't require year-round climate control. Summer occupancy was minimal. Now, with year-round use, extended move-in periods in late August and September, and warming climates, undergraduate housing is genuinely uncomfortable during shoulder seasons. Universities have enormous capital budgets but also bureaucratic procurement processes. Retrofit solutions that are faster, cheaper, and less disruptive have immediate appeal.

Electrical Load Management: The Grid Integration Story

Electrification is heating. But heating with electricity creates a new problem: peak demand.

Electricity grids are sized to handle peak demand, which in most US markets occurs during 3-6 PM on hot summer afternoons. When office workers head home and crank air conditioning, industrial facilities maintain operation, and evening peak load coincides with afternoon solar production decline. This creates a narrow window where demand spikes against available supply.

Historically, utilities managed this through expensive infrastructure: power plants that only run during peak hours, expensive transmission lines built for maximum demand but sitting idle most of the time, and demand management that's often crude (brownout notices, rotating blackouts).

Heat pumps with intelligent controls offer a different approach. A single heat pump running at full capacity in a 300-square-foot apartment uses 6-10 kilowatts. A 50-unit building with 30 heat pumps at full capacity uses 180-300 kilowatts. That's industrial-scale load. But the interesting question is: do all 30 units need to run at full capacity simultaneously?

The answer, obviously, is no. If the system is intelligent about it.

Nexus uses three techniques for load management during peak demand periods:

Passive thermal cooling: This sounds like no-tech, but it's strategic. Turning off AC in north-facing apartments on a hot afternoon seems counterintuitive until you realize that north-facing apartments actually stay cooler through the afternoon because they receive minimal direct solar radiation. By dialing AC back to 76 degrees instead of 74, you're not creating discomfort—the apartment naturally stays cooler than the setpoint anyway. When demand eases at 7 PM, AC ramps back up. The occupant never notices, but you've eliminated 5-10 minutes of peak compressor operation.

Thermal mass pre-cooling: Concrete, tile, drywall, and other building materials have thermal inertia. The system can cool them more aggressively during off-peak hours (11 PM to 6 AM when demand is low), allowing them to absorb thermal energy. During peak hours, AC runs minimally while the building structure slowly releases that stored coolness. It's like preloading a battery before a surge.

Occupancy-aware scheduling: Nexus can integrate with building access systems to understand which apartments are actually occupied. An occupied apartment needs comfort. An unoccupied one doesn't. During peak demand, AC in unoccupied units can dial back more aggressively than in occupied spaces. Occupants come home to a 76-degree apartment instead of 72, save electricity during peak demand, and no one notices because it's still comfortable.

The grid integration signal is crucial here. When utilities send a demand response signal (increasingly common as smart grid infrastructure expands), Nexus can instantly access building-level rules and apply demand reduction. Without this coordination layer, utilities would need to issue customer-by-customer requests, which is inefficient and often ignored.

Gradient's vision goes further. As heat pumps proliferate, the company sees buildings becoming active participants in grid balancing rather than passive consumers. Imagine 10,000 buildings across a region, each with 20-50 coordinated heat pump units. That's a distributed resource network capable of absorbing or shedding hundreds of megawatts of load on command. This could fundamentally change how utilities plan capacity, design infrastructure, and manage peak demand.

The math is compelling. According to Gradient executives, electrifying everything while maintaining grid stability is possible through intelligent load management. The current narrative—"if we switch everything to electric heating, the grid will collapse"—is based on the assumption that everyone uses electricity identically to how they use fossil fuels. Smart systems prove that assumption false.

Heat pump retrofits offer significant benefits over traditional HVAC systems, including higher unit retrofits, energy savings, and additional financial incentives. Estimated data.

Real-World Performance: What the Data Shows

Pilot programs provide crucial evidence of whether software-coordinated heat pump systems actually deliver the promised benefits.

In the NYCHA pilot, documented results showed several key metrics. First, energy consumption reductions of 15-30 percent depending on building characteristics and baseline consumption. NYCHA buildings range from efficient modern buildings to ancient structures with severe thermal losses. Energy reduction correlates with baseline consumption—buildings with terrible original efficiency see larger reductions as heat pumps simply eliminate the worst inefficiencies.

Second, comfort improvements were quantified through tenant surveys. In buildings with previous heating issues (radiators that couldn't be modulated), 87 percent of tenants reported improved winter comfort. In buildings with no previous cooling, 92 percent reported improved summer comfort—a huge quality-of-life improvement for populations living in heat-vulnerable housing.

Third, building operations complexity actually decreased. Steam radiator systems require constant maintenance—bleeding radiators, adjusting water levels, replacing valves. Heat pump systems operate with minimal maintenance. No seasonal changeover required. No emergency boiler repairs at 6 AM on a Saturday. The operational cost savings extend beyond energy to labor and maintenance.

The Tracy affordable housing pilot specifically addressed grid integration. During a summer heat wave when grid demand was constrained, Nexus implemented demand response reducing peak consumption by 22 percent. Occupants reported no temperature discomfort—the system had enough margin to maintain comfort while reducing demand. The utility didn't need to call for rolling blackouts because aggregated demand response from buildings prevented the shortfall.

Electrical upgrade costs proved minimal. The housing complex had a 200-amp panel with approximately 80 amps of available capacity. Twenty heat pump units staggered operation required a peak demand of only 45 amps through Nexus load management, well within available headroom. Had they been installed as independent units with no coordination, peak demand would have exceeded 70 amps, requiring a $15,000 panel upgrade. The software coordination eliminated that cost entirely.

One nuance worth highlighting: performance varies significantly based on building type and retrofit approach. A newer building with good insulation and modern windows sees different performance profiles than a 1950s tenement with single-pane windows and chronic air leakage. In well-insulated buildings, heat pump efficiency is maximized because there's less heat loss to overcome. In leaky buildings, heat pumps work harder but still dramatically outperform old boilers because boilers are so inefficient (60-75 percent) that any modern system is an improvement.

Cost Economics: The Retrofit Equation

Here's where the real breakthrough lives. Pricing and financing determine whether retrofits actually happen.

A traditional HVAC retrofit for a 50-unit building runs roughly

Window heat pump retrofits run

Nexus software adds maybe

Building owners also benefit from utility rebates. As grids shift toward renewable energy, utilities fund efficient electrification. Many utilities offer

The financing angle is crucial. Fannie Mae and other institutional lenders increasingly view heat pump retrofits as positive ESG (environmental, social, governance) improvements that enhance property value and reduce operational risk. Some lenders offer better terms for buildings implementing modern HVAC. Over a 30-year mortgage, even modest rate improvements add up to six figures of value.

Cost comparison for a 50-unit building:

• Traditional HVAC minisplit retrofit:
  $125,000-$
  250,000
• Window heat pump retrofit:
  $60,000-$
  110,000
• Savings:
  $65,000-$
  140,000 per building
• Payback period: 5-7 years (energy savings alone)
• Break-even with demand response rebates: 3-4 years

Multiply this across the US's 1.2 million multifamily buildings. Even if 20 percent retrofit in the next decade, that's 240,000 buildings. At

Estimated data shows that 60% of multifamily buildings in the US were constructed before 1980, highlighting the potential for modernization and HVAC upgrades.

Technical Architecture: How Nexus Actually Works

Understanding the software architecture explains why coordination is non-trivial and why the technology is genuinely innovative rather than straightforward.

Each heat pump unit has an embedded controller with sensors for indoor temperature, outdoor temperature (from local outdoor sensor), electrical current draw, and occupancy signals (often from smart thermostats). This data streams to Nexus cloud infrastructure via standard home Wi-Fi. The cloud system collects signals from all units in a building (or across multiple buildings) and performs optimization.

The optimization problem is computationally non-trivial. Given a building with 30 units, each with independent occupancy, thermal load characteristics, and user preferences, the system needs to continuously solve for the operating state that minimizes energy consumption while maintaining comfort constraints. With 50+ variables per unit and discrete operating modes per compressor, this is a mixed-integer optimization problem.

Nexus solves this through several approaches:

Greedy algorithms for real-time decisions. When a setpoint change occurs or occupancy signals update, the system makes immediate decisions about which units should adjust without waiting for global optimization. These algorithms are simple enough to run in edge devices (the heat pump controllers themselves) while remaining locally optimal.

Periodic global optimization every 5-15 minutes. The cloud system performs full building-level optimization considering longer-term thermal dynamics. Should you pre-cool apartments now to handle predicted afternoon peaks? Should you adjust setpoints to account for weather forecast changes? These decisions benefit from global visibility.

Machine learning for pattern recognition. The system learns occupancy patterns—"Unit 4B is unoccupied every Tuesday afternoon." User preferences—"Residents in west-facing apartments prefer cooler setpoints because of afternoon solar gain." Seasonal patterns—"August requires more aggressive cooling than July despite similar outdoor temperatures because interior thermal load is higher." These patterns inform the optimization.

Grid signal integration. When demand response signals arrive from utilities, Nexus translates them into building operations: "Reduce load 15 percent for 30 minutes starting at 4:47 PM." The system determines the optimal way to achieve this while maintaining comfort—which units dial back, which dial forward, which rely on passive cooling.

The architecture also includes fallback modes. If cloud connectivity drops, units continue operating based on local setpoints and recent historical patterns. The system degrades gracefully rather than failing entirely.

Security is handled through standard approaches: encrypted communication, certificate pinning for API calls, user authentication with role-based access control. Building managers see aggregated data and controls. Individual tenants see only their own unit. Utilities see grid response capability but not private consumption data (handled through aggregation).

Tenant Experience: The Comfort Question

Software that saves energy is only valuable if occupants accept it. If people override settings because they feel uncomfortable, optimization fails.

Gradient's approach here is deliberately conservative. The system sets guardrails that provide "comfort as a floor, efficiency as a ceiling." Within the guardrail bounds (typically 68-78 degrees), tenants retain full control. Their thermostat works identically to a traditional one. They can set 72 degrees, and the system maintains 72 degrees, optimizing efficiency only at the margins.

Nexus never silently adjust a tenant's chosen temperature. It doesn't dial back AC in occupied units during peak demand. It only optimizes in situations where tenants won't notice—pre-cooling before peak hours, passive cooling in unoccupied apartments, staggered startup to avoid demand spikes.

This approach aligns incentives. Tenants get what they expect: comfort. Building managers get what they want: efficiency and cost reduction. The software layer is invisible.

There's also a tenant benefit beyond comfort: air quality. Heat pumps with integrated filters improve indoor air quality compared to boiler-based heating systems that rely on radiators and convection. Some units include smart filters that track replacement schedules, improving respiratory health outcomes for residents—another non-obvious benefit of modernizing HVAC systems.

Reducing retrofit costs from

Scaling Challenges and Future Directions

The current state represents proof-of-concept success. The real test is scaling to thousands of buildings.

Gradient's team is expanding installation capacity. Early deployments relied on the company's own technicians. Scaling requires training and certifying hundreds of independent installation contractors. This is straightforward but time-consuming—each installer needs to understand the specific mounting requirements, electrical connections, and Nexus integration.

Supply chain for heat pump units themselves is improving but remains capacity-constrained. As demand increases, manufacturing must scale. Gradient is likely manufacturing units or contracting with established HVAC manufacturers to produce units to specification. The supply chain is a known bottleneck that resolves with volume.

Regulatory environment varies by jurisdiction. Some cities have updated building codes to enable window heat pump retrofits explicitly. Others require case-by-case approval from building officials. Harmonizing regulations across jurisdictions accelerates deployment.

Utility relationships require ongoing development. Many utilities are still learning how to integrate third-party demand response systems. As more buildings connect, utilities will develop standardized interfaces for real-time communication. We're likely 2-3 years from utility-Nexus integration becoming routine rather than pilot projects.

The long-term vision involves buildings becoming active grid participants. Imagine: it's 5 PM on a hot August day, the grid is stressed, renewable solar production is dropping, demand is peaking. Nexus receives a signal: "Grid is at 95 percent capacity, reduce load by 10 percent." Across a region, 5,000 buildings simultaneously reduce HVAC load by 5 percent. The occupants notice nothing. The grid stays stable. A crisis is averted through distributed intelligence rather than rolling blackouts or expensive infrastructure.

Competitive Landscape and Alternative Approaches

Gradient isn't alone in pursuing window heat pump solutions. Several companies are exploring similar approaches with variations.

Other window heat pump manufacturers focus primarily on the hardware without integrated building-level software. This limits optimization to unit-level controls. Their installations require the same electrical load management headaches that traditional minisplits do when deployed at scale.

Gradient's differentiation is specifically the Nexus software layer. The hardware is good, but the software is the moat. Any competitor can eventually build equivalent window heat pumps. But the demand response algorithms, occupancy integration, grid signaling capability—these require ongoing development and integration with utility infrastructure.

Alternative retrofit approaches persist. Some buildings pursue better insulation and window replacement rather than HVAC modernization. This is complementary rather than competitive—modern windows + heat pumps vastly outperform either alone. Other buildings explore chilled water systems or VRF (variable refrigerant flow) minisplits, which offer different tradeoffs: higher efficiency but higher installation complexity and cost.

District heating/cooling systems appeal to some municipalities as an approach to retrofitting entire blocks simultaneously. This requires infrastructure investment but offers efficiency benefits through system-level optimization. It's orthogonal to the window heat pump approach—both could coexist.

The wind tunnel of technology evolution suggests multiple approaches will persist. Window heat pumps solve problems for certain building types (small-scale multifamily, retrofit constraints, electrical limitations). Other technologies solve problems for other building types. The market is diverse enough to support several solutions.

Environmental and Social Justice Dimensions

This story isn't purely technological. There are justice dimensions worth acknowledging.

Older multifamily buildings are disproportionately occupied by lower-income residents and communities of color. Historical redlining and subsequent disinvestment concentrated poverty in older, poorly-maintained housing stock. These buildings have worse thermal performance, less effective heating and cooling, and higher operating costs that get passed to tenants as higher rents.

Climate change amplifies these inequities. Heat waves are deadliest in neighborhoods with less tree canopy and more poor-quality housing. Elderly residents, children, and people with health conditions face genuine danger from inadequate cooling during extreme heat events. Heat-related mortality has increased 150 percent over the past 20 years, concentrated in exactly the populations living in older multifamily buildings.

Heat pump retrofits directly address these equity issues. Making retrofits cheaper, faster, and simpler removes barriers that previously limited modernization to wealthy buildings. If a retrofit that previously cost

NYCHA's partnership with Gradient reflects this understanding. Public housing occupants deserve the same comfort as wealthy residents. Retrofitting NYCHA buildings with modern HVAC is an equity investment with climate benefits as a bonus.

Utility incentive programs for efficiency retrofits are increasingly targeted toward low-income housing. Some states dedicate 15-20 percent of utility efficiency funds to multifamily retrofits in underserved communities. Making these retrofits cheaper unlocks more funding, enables more projects.

There's also an employment equity angle. Installation and maintenance of heat pump systems creates local jobs. These are skilled technical positions paying

Financing and Long-Term Economics

For a building owner deciding whether to retrofit, financing options and economic assumptions are paramount.

Traditional capital structure for retrofits involves owner equity or bank loans. A building owner with $100,000 budget can retrofit 20-30 units with heat pumps, vs. 5-10 units with traditional HVAC. This dramatically changes decision-making. The retrofit becomes feasible rather than aspirational.

Energy Service Agreements (ESAs) offer another structure. A third-party company finances the retrofit and recovers costs through energy savings. The building owner pays no upfront cost. As utilities drop from efficiency improvements, ESA provider takes their cut and owner captures remainder. This de-risks the retrofit for building owners without capital.

Utility rebates vary by region but commonly range from

Government incentive programs include federal Investment Tax Credits (recently expanded for heat pumps), state efficiency programs, and local building improvement grants. The landscape is fragmented but increasingly favorable to heat pump retrofits.

Emissions reduction creates a quantifiable value. If a building reduces energy consumption 25 percent through heat pump retrofits, and grid carbon intensity is 0.4 kg CO2 per kWh, a 500-unit apartment complex reduces emissions by 500 metric tons annually. In carbon markets or ESG reporting, this translates to quantifiable value. Some institutional investors explicitly bid up valuations for buildings with modern, efficient HVAC systems.

The financing math increasingly favors retrofits. A

Implementation Roadmap: From Pilot to Scale

If you're a building manager considering a retrofit, here's the practical roadmap:

Phase 1: Assessment (1-2 weeks)

• Have an electrical contractor assess panel capacity and available amps
• Calculate current energy consumption and identify baseline for efficiency measurement
• Identify installation locations (typically windows with exterior access)
• Evaluate insulation and window condition (they impact heat pump efficiency)
• Get preliminary quotes from installation contractors

Phase 2: Planning (2-4 weeks)

• Notify tenants and coordinate access schedules
• Apply for utility rebates (do this early—application processing takes time)
• Finalize Nexus software setup with preferences for thermal guardrails
• Plan staggered installation to minimize tenant disruption
• Arrange training for building management staff on software operation

Phase 3: Installation (4-12 weeks depending on building size)

• Install units in phases—20-30 units per month is typical installation pace
• Test units immediately after installation
• Integrate with Nexus cloud system
• Configure thermal guardrails and occupancy rules
• Educate tenants on thermostat operation

Phase 4: Optimization (1-3 months post-installation)

• Monitor energy consumption and compare to baseline
• Fine-tune guardrails based on actual occupancy and weather patterns
• Identify demand response opportunities with utility
• Measure comfort through tenant feedback (expect 80+ percent satisfaction)
• Document performance for rebate fulfillment and ESG reporting

Phase 5: Operations (ongoing)

• Schedule preventive maintenance (filters, outdoor coil cleaning)
• Monitor performance dashboards
• Participate in demand response events when grid is stressed
• Plan future phases (retrofit remaining units or other buildings)

Looking Ahead: The Infrastructure Transformation

We're witnessing the beginning of a fundamental shift in how buildings manage thermal comfort.

The old model: giant centralized HVAC systems designed 40 years ago, operating inefficiently, consuming massive electricity during peak hours. Building managers had minimal control. Tenants had thermostats that worked or didn't, with no middle ground.

The new model: distributed heat pump systems coordinated by intelligent software, communicating with grids, reducing demand during peak periods, improving tenant comfort while reducing energy consumption.

This isn't just a better way to heat and cool buildings. It's infrastructure that enables renewable energy adoption at scale. The grid can't run on 100 percent renewables unless demand becomes flexible. Heat pump systems with smart controls are the demand flexibility that makes 100 percent renewable grids technically and economically viable.

For climate goals, this is non-trivial. Building heating and cooling represents 20 percent of US energy consumption and associated emissions. Electrifying buildings with efficient heat pumps and operating them intelligently could reduce building sector emissions by 60-80 percent. No other single technology offers that magnitude of impact.

The economics are increasingly favorable. Heat pump technology matures, installation costs decline, electricity grids decarbonize, and climate risks increase. Building owners that retrofit early capture value through energy savings, rebates, and improved property valuations. Building owners that delay face increasing risk as climate impacts worsen and regulatory pressure intensifies.

There's also the straightforward human angle. People deserve to be comfortable in their homes. Affordable housing residents shouldn't experience the chronic overheating and underheating that plagues older buildings. Modern comfort is a baseline expectation. Heat pumps make that baseline achievable affordably.

Gradient's innovation is specifically valuable because it solves the retrofit problem that blocked progress for decades. Making retrofits fast, cheap, and architecturally uninvasive removes the main barrier preventing thousands of buildings from modernizing. The Nexus software layer enables buildings to operate as intelligent participants in the grid rather than dumb consumption nodes.

The path from here involves scaling. More buildings retrofitting. More contractors trained. More utilities integrating with demand response systems. More residents experiencing modern thermal comfort in housing that previously lacked it. More grid stability from distributed intelligence rather than expensive infrastructure. More climate progress.

It's not flashy technology. It doesn't dominate tech headlines or venture capital funding announcements. But it's consequential infrastructure solving real problems affecting millions of people and critical climate goals. Sometimes the most important innovations are the ones making existing ideas work at scale.

FAQ

What exactly is a window heat pump and how is it different from a traditional air conditioner?

A window heat pump looks like an air conditioner but functions fundamentally differently. Traditional ACs cool by moving warm air outside. Heat pumps reverse this process during winter, extracting heat from outdoor air (even cold air contains thermal energy) and moving it indoors. The key advantage is that heat pumps provide both heating and cooling from a single unit, with superior efficiency to electric resistance heating. Unlike minisplit systems that require extensive installation, window units mount directly in window frames with no wall cutting or electrical upgrades needed.

How does Nexus software actually reduce energy consumption in buildings?

Nexus software coordinates multiple heat pump units across a building to eliminate redundant operation and waste. Instead of each unit operating independently (potentially fighting each other or running simultaneously), the system staggers startups, balances thermal loads across units, pre-cools before peak demand periods, and reduces cooling in naturally cool areas. In one documented case, setting a 78-degree heating guardrail reduced energy consumption 25 percent the next day without tenant complaints, because the system simply eliminated inefficient operation rather than restricting comfort.

What are the main installation advantages of window heat pumps compared to minisplits?

Window heat pumps install in hours rather than days. There's no need to cut walls, run refrigerant lines, upgrade electrical panels, or coordinate with utility companies. A single technician can install 3-5 units daily in an apartment building. For old buildings with limited electrical capacity or architectural constraints, window heat pumps often represent the only feasible retrofit option. Minisplits offer higher efficiency but at substantially higher installation cost and complexity—typically 3-4 times more expensive for entire-building retrofits.

How does demand response work, and why would a building owner participate?

Demand response means reducing electricity consumption during peak demand periods when the grid is stressed. Utilities send signals requesting load reduction; Nexus software automatically reduces HVAC load by 5-15 percent in ways occupants don't notice (passive cooling, staggered startup, minor setpoint adjustments). In return, buildings receive rebate payments (typically

What's the actual financial payback for retrofitting a multifamily building with heat pumps?

A 50-unit retrofit costs roughly

Will heat pumps work effectively in very cold climates?

Window heat pumps work in cold climates but with reduced efficiency at temperatures below 20°F. Modern cold-climate heat pumps maintain 80-90 percent of heating capacity at 0°F, which is sufficient for most US heating needs. In extremely cold regions (northern Minnesota, Alaska), supplemental resistance heating may activate occasionally. However, the efficiency is still typically better than traditional electric heating, and combined with building improvements (insulation, weatherization), heat pumps are viable in nearly all US climates. Pilot programs in cold climates like upstate New York have performed well.

How does occupant comfort remain acceptable when the building optimizes for efficiency?

Nexus never silently adjusts a tenant's chosen temperature. Tenants retain full thermostat control within guardrail bounds (typically 68-78°F). Optimization happens at the margins where people won't notice—pre-cooling before peak hours, reducing load in unoccupied spaces, passive cooling in naturally cool areas, staggered startup to avoid demand spikes. Tenant surveys from pilot programs report 87-92 percent satisfaction with comfort, indicating that intelligent optimization is transparent to occupants while providing substantial energy savings.

What maintenance do window heat pump units require?

Window heat pump maintenance is minimal compared to traditional HVAC. Filters should be checked monthly and replaced every 3-6 months depending on use and dust levels. Outdoor coils should be cleaned seasonally to remove dust and debris. Unlike boiler systems that require annual inspections, seasonal adjustments, and emergency repairs, heat pumps are simple solid-state systems with no moving parts except the compressor (sealed unit). Building managers report spending 80 percent less time on HVAC maintenance after retrofitting from steam boilers to heat pumps.

Can existing electrical panels handle heat pumps, or do expensive upgrades always occur?

Most residential electrical panels have spare capacity. A 200-amp residential panel typically has 80-100 amps available for new circuits. Since window heat pumps draw 6-10 kilowatts per unit, most buildings can install 5-8 units without upgrades. Nexus software further reduces electrical stress through intelligent load management, often eliminating upgrades that would otherwise be necessary. Even in buildings with tight electrical capacity, Nexus staggers unit operation so peak demand stays within panel limits—avoiding costly upgrades that could cost $15,000+ per installation.

Key Takeaways

• Window heat pumps solve the retrofit bottleneck for aging multifamily buildings by installing in hours without extensive electrical or structural modifications
• Nexus software coordinates distributed units across buildings, reducing energy consumption 15-25 percent through intelligent thermal management and demand response
• Grid integration capabilities help utilities manage peak demand periods, making widespread electrification compatible with grid stability
• Financial payback for retrofits drops from 15+ years with traditional HVAC to 5-7 years with window heat pumps, unlocking climate investments previously considered economically infeasible
• Real-world pilots demonstrate simultaneous improvements in occupant comfort, energy efficiency, building operations cost, and environmental emissions reduction

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