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Cheese. Beer. Clothes. Paper. Manufacturers across the country rely on combustion boilers to produce the heat required for making a range of products. But by burning coal, oil, gas, and other fuels to do so, that equipment spews health-harming and planet-warming pollution into the skies.
A different technology would allow communities to breathe easier. Electric heat pumps, which can provide industrial heat without emissions, are spreading but remain underutilized. They only supply about 5% of global industrial heat.
Now, a new study quantifies what Americans stand to gain from manufacturers switching to heat pumps. A gradual transition would not only decarbonize heating but deliver a staggering $1.1 trillion in public health benefits and avoid 77,200 pollution-inflicted deaths from 2030 to 2050, according to a report released Thursday by the nonprofit American Lung Association.
It’s a move “that’s going to save lives, reduce health emergencies, cut asthma attacks, [and] keep kids healthy enough to be in school rather than missing school days,” said Will Barrett, an assistant vice president at the American Lung Association who works on national clean air policy.
Nearly half of the U.S. population lives in places with very unhealthy levels of ozone or particle pollution, two of the most common and dangerous air pollutants. Antiquated boilers are an oft-overlooked part of the problem.
Like other fossil-fuel-burning machines, such as home appliances and cars, industrial combustion boilers release nitrogen oxides, fine particulate matter, and sulfur dioxide into the air. These toxic byproducts can harm children and adults in severe ways, such as asthma attacks, preterm births, heart attacks, strokes, and an impaired ability to think.
To quantify the benefits of switching to industrial heat pumps, the authors created an inventory of the industrial boilers across the U.S. based on publicly available data. They found that about 33,500 boilers scattered around the nation operate at the low and medium temperatures — i.e., less than 200 degrees Celsius — that make them the best candidates for heat pumps to replace. (For now, heat pumps are most feasible for lower temperatures, though Barrett noted research-and-development efforts will bring down the costs for higher-temperature changeouts over time.)
The team then estimated how much pollution would be avoided by gradually swapping these boilers out for electric heat pumps over the next 15 years, with lower temperatures addressed soonest. By leveraging the U.S. Environmental Protection Agency’s health impacts tool, the team found that switching to heat pumps would not only save thousands of lives but also prevent 33 million asthma attacks, 204,000 asthma cases, 13 million lost school days, and 3.4 million lost work days.
States in which more people live close to industrial pollution sources would experience the greatest boost to public health and productivity, according to the team’s analysis. The three with the biggest estimated health benefits are Florida, which would save $107 billion over the study period, Pennsylvania ($82 billion), and North Carolina ($68 billion). Twenty-three others would save at least $25 billion each.
The transition would also reduce carbon emissions by 1.6 billion metric tons through 2050. That translates to $351 billion in avoided societal costs due to a destabilized climate — which is already being felt in record-breaking heat waves and deadlier floods. Sources of industrial heat, including boilers, account for 9% of all U.S. greenhouse gas pollution, according to the Department of Energy.
The findings come as the Trump administration aggressively rolls back public health protections, emissions regulations, and support for industrial decarbonization projects, having cancelled $3.7 billion in funding in May.
To push industries to switch to heat pumps, the report recommends state and local policymakers offer manufacturers incentives to electrify their heating, launch education campaigns aimed at communities and companies, and require the adoption of nonpolluting equipment. California has taken the lead; its South Coast Air Quality Management District passed a first-in-the-nation measure last year to gradually phase out combustion boilers and process heaters starting in 2026.
“It’s a new paradigm when you’re operating and fulfilling all the needs of these manufacturing heat processes without causing health-harming pollution,” Barrett said.
How do you reduce greenhouse gas emissions from one of the largest sources — buildings — without breaking the bank or the grid? To answer that question, the utility Puget Sound Energy (PSE) turned to DNV, a global risk management and assurance consultancy, to examine the benefits of heat pumps.
While heating, ventilation, and air conditioning technologies have vastly improved in efficiency over time, the intervals at which people replace these systems aren’t that frequent, so it may take decades to upgrade a carbon-intensive but otherwise properly functioning HVAC system. Utility programs to incentivize the replacement of older systems with more efficient ones can speed up the process, but in colder regions, that typically means simply replacing a system fueled by oil or natural gas with a more efficient but still fossil-fueled system. Electric heat was simply too inefficient and expensive for colder climates — until recently. Fortunately, the heat pumps on the market today have matured to the point where they are effective in places with colder climates, like Washington state. But they still need a little push for widespread adoption.
When data met heat pumps
PSE supports approximately 1.1 million electric customers and more than 900,000 natural gas customers and is at the forefront of heat pump deployment across the Evergreen State. The utility, which has worked with DNV on energy projects since 2010, wanted more data on potential customer and system impacts of dual-fuel heat pumps. “I was already in conversation with the customer on a potential project related to load forecasting when a question came up around dual-fuel heat pumps,” said DNV Principal Consultant Kevin Cracknell. “My response was that DNV has the data and expertise to help.”
So DNV and PSE devised a pilot program that provided incentives for two types of heating and cooling systems: dual-fuel heat pump systems and cold-climate heat pump systems. The pilot targeted customers who were either interested in adding a hybrid heat pump system to their natural gas furnace or replacing their electric forced hot-air furnace with a cold-climate heat pump.
What are dual-fuel heat pumps?
Dual-fuel systems have a standard heat pump, which can provide heating down to about 35 degrees Fahrenheit, paired with a natural gas furnace, which turns on when temperatures drop below 35°F. The cold-climate systems are rated to provide 100 percent heating until temperatures drop to about 5°F.
With average winter temperatures between 30 and 40 degrees Fahrenheit, PSE’s territory is an ideal place to deploy heat pumps. But electrification comes with challenges. If the majority of PSE’s 900,000-plus gas customers made the switch to electric heat pumps, the impact on the grid could be significant. Because the impacts on energy savings and peak load from heat pumps hadn’t been closely studied, PSE needed to fully understand the implications before it considered expanding the program. “When it comes to energy efficiency programs, utilities need information backed up by sound science. The DNV team provided critical information on heat pumps to PSE so they can move the energy transformation forward,” said Geoff Barker, a principal consultant at DNV and the sponsor of this project.
To get a clear picture of typical consumption patterns, DNV completed a preliminary analysis using unique localized data, including residential saturation surveys, daily gas data, and interval advanced metering infrastructure (AMI) data. The data was available through DNV’s existing end-use data development work as well as load research completed to support PSE’s gas and electric utility rate cases. Using this data, DNV examined consumption patterns on the basis of outside temperature, home size, and heating technology. DNV’s preliminary analysis enabled PSE to confidently validate assumptions on energy use and changes in load, which got the utility team excited for a more detailed study.
Then PSE engaged DNV to evaluate how much money energy program participants saved and how the new equipment changed peak demand during the heating season. Both these statistics are important — participants need to see at least a small dent in their energy bills to make their investment worthwhile, and the utility needs to make sure the grid can handle the increased demand. Measuring energy savings was relatively simple. DNV analyzed billing data to estimate annual heating savings and hourly peak demand, modeled consumption data, and then estimated annual savings using weather-normalized daily consumption and peak-demand impacts.
A sample of dual-fuel heat pumps were also submetered to determine when the heat pumps or gas furnaces were being used and at what outdoor temperatures. To measure the difference between the modeled and actual consumption, the submeter data was also compared with the consumption data in the AMI billing analysis.
From an energy savings perspective, results were positive: The pilot program showed that all the program participants reduced the total amount of energy used to heat their homes. For participants who switched from an electric furnace to a heat pump, all the energy savings were due to the greater efficiency of the cold-climate heat pump. Results were mixed for participants who switched from a gas furnace to a heat pump and for those who installed a hybrid system. While their electricity use increased, that was countered by a reduction in gas consumption, and thus a reduction in their overall home energy use.
Just as important to PSE was the program’s effectiveness. DNV explored the experiences of the customers who switched to hybrid systems, the contractors who installed the equipment, and PSE staff to understand all aspects of the program. Unlike the energy savings evaluation, this analysis depended on interviews and surveys, and provided PSE with insights on how to improve the program moving forward.
The good news is that all participants were very satisfied with the new equipment. Customers rated their experience with the program very highly, and a majority of them would recommend a similar heat pump system to their friends and family. For energy savings, the average satisfaction rating for customers with a cold-climate heat pump was 4 out of 5. For owners of a hybrid system, it was slightly lower, 3.9 out of 5, likely because the overall savings were a bit less than expected.
What’s next for heat pumps in Washington state? DNV identified several areas where the program could be improved, including the need for more clarity on how to optimally run the hybrid heat pump systems (some participants had their gas heating kick in at temperatures as high as 50°F, and others let it run at any temperature). PSE plans to provide incentives for hybrid heat pump systems for the next 5 years and will continue to evaluate the energy savings, peak demand, and carbon emissions impacts over the next few years.
Additionally, future participants and their systems will provide more data, which will help increase understanding of how hybrid heat pump systems impact energy consumption — giving the industry a greater understanding of this emerging opportunity. PSE plans to provide incentives for hybrid heat pump systems for the next 5 years and will continue to evaluate the energy savings, peak demand, and carbon emissions impacts of the systems over the next few years.
“The collaboration with DNV has allowed us to gather valuable data that will help shape the future of home heating in our region.”
Jesse Durst, senior market analyst at PSE
PSE’s pilot heat pump program is laying the foundation for significant decarbonization in Washington state, ensuring that its customers are saving energy, reducing greenhouse gas emissions, and keeping warm all winter long. But the impact of this pilot program goes beyond the state’s borders. The data and insights DNV has amassed are a solid foundation for utilities, contractors, and customers to understand the value of heat pumps as an effective tool for decarbonization.
Canary Media’s “Electrified Life” column shares real-world tales, tips, and insights to demystify what individuals can do to shift their homes and lives to clean electric power.
As summer temperatures sizzle, are you frantically shopping for central air conditioning? Take a breather, because you could get AC functionality — and more — by opting for an increasingly popular appliance: a heat pump.
All-electric heat pumps are ACs, but better. Equipped with the ability to work in reverse, they not only dump heat outside in the summer, but can also pull heat indoors in the winter.
Heat pumps do often cost a bit more up front, but if you’re on the hunt for a new AC system anyway, the difference can be small enough that it’s worth exploring the option. After all, you could end up with AC and a shiny new heating system, to boot.
Should you join the growing share of households choosing heat pumps over mere ACs? Here are answers to key questions a prospective buyer is likely to have.
When sized right, heat pumps let you simultaneously meet your cooling needs and proactively upgrade your heating system to one that’s better for your health and, typically, your wallet in the long run.
For most households, these two-in-one appliances pay for themselves in reduced energy bills over their estimated 16-year lifetime.
Families that go from relying on expensive delivered fuels to electric heat pumps unlock the biggest cost savings: an average of $840 per year, according to electrification nonprofit Rewiring America. Households ditching gas heating can see an average of $60 in savings per year. Utility customers with access to electricity rates that favor heat pumps can save even more.
Other benefits? Heat pumps slash planet-warming pollution. Adopters report that the appliances produce more even, comfortable heat than gas systems. And unlike their fossil-fuel-burning counterparts, heat pumps don’t emit pollutants linked to asthma, cancer, and premature death.
Oh, and if you’re okay with air-handling units on your walls, a mini-split heat pump system can let you get AC without having to install pricey ductwork.
It’s tricky to find trustworthy data about the cost of central AC, home-energy marketplace EnergySage reports. But the general consensus is that heat pumps do come at a bit of a premium.
Here’s one example: In California, it costs between $900 and $1,900 more to replace a broken central AC with a heat pump instead of a conventional AC. That’s out of a median total heat-pump installation cost of $15,900, per data from the TECH Clean California program from July 2021 to April 2024.
But spending on a heat pump can mean avoiding the expense of getting a new furnace. Southern California’s air-quality agency recently found that installing a heat pump in a single-family home in the region typically costs $1,000 less than installing a gas furnace and AC.
Across the U.S., heat pump installations typically fall between $6,600 and $29,000, according to Rewiring America. That wide range is because project prices for heat pumps, like other HVAC equipment, can depend on a dizzying number of factors, including the size of your home, its energy demand, your local climate, the equipment efficiency rating, the state of your home’s electrical system, and how familiar your local labor market is with the product.
For now, there’s the Energy Efficient Home Improvement Credit, which can take up to $2,000 off your federal tax bill for a qualifying heat pump. But if Republicans’ “Big, Beautiful Bill” passes in its current form, that tax credit will disappear at the end of this year. (All the more reason to get one this summer.)
Income-qualified households can check with their state energy office about the availability of Home Energy Rebates, an $8.8 billion initiative created under the landmark 2022 Inflation Reduction Act. Details vary by state, but the law established an $8,000 incentive for a heat pump, as well as rebates for enabling updates: $2,500 for electrical wiring and $4,000 for an electrical panel upgrade. While some state programs have rolled out after being finalized under the Biden administration, others still awaiting approvals are now stuck in limbo.
Separate state and local incentives may also be available. Ask your utility, Google, and reputable heat-pump contractors in your area. Rewiring America also has a handy calculator that provides information on electrification incentives for residents in 29 states, with more soon to come, a spokesperson said.
Get at least three quotes; the EnergySage marketplace can connect you to vetted local installers so you can compare offers. Some contractors specialize in home electrification — and might offer cutting-edge strategies to navigate a heat pump transition. Utility and local incentive programs may also have lists of participating installers.
But don’t stop there. See if there’s a local electrification group — like Go Electric Colorado, Electrify Oregon, or Go Electric DMV for D.C, Maryland, and Virginia — which can connect you to resources and friendly, knowledgeable electric coaches. Typically volunteers, they can offer free advice and recommend contractors they’ve worked with.
Ideally, you don’t want to find yourself in the sticky and sometimes downright dangerous situation of needing to get your AC replaced in an emergency. But if your AC has suddenly expired, you can give yourself more time to weigh your options by getting a “micro” heat pump as a stopgap measure.
Experts recommend drafting a road map for electrification upgrades in advance. Research contractors, costs, incentives, and logistics of other upgrades, like insulation and air-sealing or electrical system updates; your future self will thank you.
To help you on your electrification journey, Rewiring America offers a free, personalized planning tool, complete with estimated energy-bill impacts.
Changing your HVAC system is a big deal — and you don’t have to figure it out on your own. Got a question or story to share about choosing a heat pump over an AC, tackling another electrification project, or fully electrifying your home? I’d love to hear it! Reach out to me at takemura@canarymedia.com; my aim is to make the energy transition easier for you. Stay cool out there!
On Friday, air-quality regulators for Southern California rejected a plan to gradually phase down a major source of pollution: new gas-burning space and water heaters in homes. It’s a blow to efforts to clean up harmful, planet-warming emissions from buildings — in Southern California and possibly beyond.
The rules would’ve reduced smog-forming emissions in the South Coast Air Quality Management District, home to more than 17 million residents across Los Angeles, Orange, Riverside, and San Bernardino counties — a region with some of the nation’s dirtiest air, according to the American Lung Association.
“We had the opportunity to pass life-saving legislation that would have significantly reduced air pollution from home appliances sold in our region,” Holly J. Mitchell, an LA County supervisor and SCAQMD board member who voted in favor of the measures, said in a statement. The rules were a chance “to improve health, reduce medical expenses, and fulfill our job of bringing our region into compliance with the Clean Air Act.”
Friday’s 7-5 vote against the rules, which were poised to be the agency’s strongest in three decades, came after more than two years of development and months of intense industry-led opposition.
An investigation published by Floodlight and The Guardian last week found that, since December, the Southern California Gas Co. — or SoCalGas, the nation’s largest gas-distribution utility — and allied groups have spread misleading information about the rules and encouraged mayors and other public officials to send letters, testify, and pass resolutions opposing the measures. On Thursday, the Trump administration threatened to sue if the measures were adopted.
At the end of the six-hour meeting Friday, the board sent the rejected rules back to a committee. They won’t be revisited this year, according to the agency. But what comes of any further rejiggering is “almost without a doubt, going to be weaker than what was initially proposed,” said Christopher Chavez, deputy policy director at the California nonprofit Coalition for Clean Air.
Opponents repeatedly claimed the proposals, updates to rules 1111 and 1121, were a mandate to switch to electric equipment and a ban on gas-burning appliances. But they were, in fact, neither.
The rules would have allowed residents to keep their gas-fueled equipment — and even to replace it at the end of its life with gas systems if that’s what they chose. SCAQMD’s staff had proposed a glide path for manufacturers to gradually increase their sales targets of super-efficient electric heat-pump water heaters and heat pumps: from 30% by 2027 to 90% by 2036. Manufacturers would have also paid a nominal mitigation fee of $50 to $500 per gas appliance sold — far less than the actual health costs associated with them, the agency acknowledged in March.
Heat pumps can cost more or less than conventional appliances depending on the equipment and home type. For example, according to the SCAQMD, installing a heat pump in a single-family home typically costs $1,000 less than installing a gas furnace and AC.
Industry-led pressure had already significantly watered down an earlier draft of the rules that would have effectively barred the sale of gas-burning heaters and water heaters. Still, even the weaker measures would have slashed emissions of nitrogen oxides by 6 tons per day by 2060 in the smoggiest region in the country. In its socioeconomic analysis, the agency estimated the regulations would have saved around 2,490 lives and $25 billion in health costs from 2027 to 2053.
Opponents included the Orange County Business Council, the Central Valley Business Federation, and former LA Mayor Antonio Villaraigosa, a Democrat running for California governor. Many claimed the rules would impose a huge financial burden on consumers, referencing a report that puts the cost of the measures at $8.9 billion annually. The report’s author works for the California Business Roundtable, an organization that SoCalGas parent company Sempra paid membership dues to last year.
A SCAQMD staff member called the oft-cited analysis inaccurate, pointing out severe flaws in the modeling approach at Friday’s meeting. The agency’s staff, which is separate from the voting board, maintained that the measures made economic sense, ranging from an estimated price tag of $174 million to an estimated savings of $191 million annually. But even after the staff’s briefing, board members who voted no continued to bring up costs.
Southern California’s decision has put advocates on guard as other jurisdictions aim to develop and implement zero-emissions appliance rules, according to Dylan Plummer, building electrification campaign advisor at the Sierra Club. That includes the San Francisco Bay Area, which adopted a zero-emissions standard for space and water heaters in 2023; the state of California, as air regulators could produce a similar proposal late this year; and Maryland, which is crafting zero-emissions rules for heating homes and businesses.
For SCAQMD’s proposed regulations, the gas industry, real-estate associations, and the California Republican Party mounted an effective campaign of falsehoods about costs and consumer choice, Plummer said. “We have a lot of work to do to inoculate not just the public but regulators and elected decision-makers against those talking points.”
Last week, the Trump administration canceled $3.7 billion in federal funding for two dozen green industrial projects that the Department of Energy claimed “failed to advance the energy needs of the American people, were not economically viable, and would not generate a positive return on investment of taxpayer dollars.”
More than a quarter of that spending would have gone to 11 projects designed to cut planet-warming pollution from generating the heat used in factories — one of the trickiest decarbonization challenges to solve.
“This is a really, really significant setback for clean heat in the U.S.,” said Brad Townsend, the vice president of policy and outreach at the think tank Center for Climate and Energy Solutions (C2ES).
The wide-ranging projects included installing industrial heat pumps at up to 10 plants where giant Kraft Heinz Co. produces its foodstuffs, building an electric boiler at one of plumbing-fixture manufacturer Kohler Co.’s Arizona factories, and adding a heat battery to Eastman Chemical Co.’s facility in Texas.
Distributed under the Industrial Demonstrations Program at the Energy Department’s now-embattled Office of Clean Energy Demonstrations, the funding promised to bolster the manufacturing sector with a major investment in technologies meant to give American companies an edge in global markets.
Groups such as C2ES and the American Council for an Energy-Efficient Economy estimated the federal support would generate hundreds of thousands of jobs in both direct construction and operations and indirect hiring at real estate firms, restaurants, and retailers near the industrial sites. In addition, federal researchers expected to gather information through the projects that could be used broadly throughout U.S. industry to improve output and bring down energy costs.
“The data and lessons learned in de-risking this technology would then translate into follow-up investment in the private sector,” said Marcela Mulholland, a former official at the Office of Clean Energy Demonstrations who now leads advocacy at the nonpartisan climate group Clean Tomorrow.
“If you were in a technology area covered by OCED, you needed public investment to scale,” she added. “Something in the proverbial ‘valley of death’ made it difficult for the private sector to advance the technology on its own.”
With the funding, U.S. industry had the chance to develop new approaches that could produce greener — and cheaper — materials, giving American manufacturers an edge over Asian or European rivals as corporate and national carbon-cutting policies put a premium on products made with less emissions. Absent that, Mulholland said, U.S. companies risk falling behind competitors who benefit from lower-cost labor and easily accessible components from nearby industrial clusters, like those in Vietnam, China, or Germany.
“It’s hard to overstate the scale of the loss,” Mulholland said.
Already, a handful of companies are considering shifting production overseas in the wake of the funding cuts, according to two sources who have directly spoken to leaders of firms that lost federal funding. The sources were granted anonymity because they are not authorized to speak publicly about the plans.
“When these projects don’t go forward, we’re going to see challenges for the companies from a profitability perspective and from a global competitiveness perspective,” said Richard Hart, industry director at the American Council for an Energy-Efficient Economy. “What happens then is other countries and other companies will step in to meet those demands.”
In the long term, he added, the cuts erode the value of a federal contract.
“When the U.S. government signs a contract with you, it’s reasonable to assume that that contract is gold and that you can use that contract to make plans as a company that … you can explain to investors, to employees, and to the full group of stakeholders around your facilities,” Hart said. “The loss of trust that comes from canceling those contracts is likely to be pervasive. That’s very sad.”
Part of the problem is that the contracts were cost-share agreements, which traditionally give the federal government the right to exit the deals without any legal penalty. In theory, OCED could have structured the federal contracts differently through a category known plainly as “Other Transactions.” The Department of Commerce, for example, issued money from the CHIPS and Science Act to semiconductor companies through such “other transactions” that lack the same off-ramps for the government.
But the Commerce Department did so under the advice of a legal memo from its general counsel. By contrast, the Energy Department “is way, way behind” on adopting alternative contract structures when disbursing money, according to a former OCED official who spoke on condition of anonymity.
As a result, the agency stuck to the financing mechanisms with which it was familiar — such as cost-share agreements.
Internally, the Trump administration said the cuts were justified in part because the companies involved were well funded and could manage the investments themselves, the official said.
“But I don’t think that’s the case. They need a government incentive to make the technological changes they were trying to do,” the former OCED official said.
“I would bet less than half of them keep going by themselves,” the official added. “It’s a big blow.”
Canary Media’s “Electrified Life” column shares real-world tales, tips, and insights to demystify what individuals and building owners can do to shift to clean electric power.
An affordable housing complex for older adults in Sacramento, California, boasts some enticing features. Residents of the earth-toned, low-rise structures can cultivate gardens, swim laps in the pool, and toss bocce balls. They can stroll to visit neighbors. And now, after an electric transformation of the buildings, Foothill Farms residents can also enjoy the cleaner air that comes with ditching gas appliances.
The project not only slashes the complex’s health-harming and planet-warming pollution — it also made financial sense for both the owner BRIDGE Housing and its tenants. Two years ago, the 138-unit property’s original gas-fired equipment was nearing the end of its life. Coupled with available financial support, the timing gave executives of BRIDGE, a nonprofit affordable housing developer and manager, a chance to pivot away from fossil fuels.
The “smart, opportunistic” project at Foothill Farms illustrates how properties can electrify while keeping costs low for residents, according to a case study written earlier this year by staff at the Stewards of Affordable Housing for the Future, a collaborative of 13 nonprofits, including BRIDGE. The retrofit is also a trailblazer for the decarbonization journey millions more units of government-supported affordable housing will eventually need to take.
Although single-family housing is by far the most prevalent in the U.S., and the biggest source of carbon pollution from homes, cutting fossil fuels from multifamily affordable housing is a particularly tricky task.
Some of the most vulnerable Americans live in subsidized apartments, including low-income households with older adults, disabled individuals, young families, and veterans — and they usually rent these units. Residents typically lack the power or cash to electrify properties, which presents a hurdle to eradicating emissions from buildings and denies inhabitants the upsides of these retrofits: greater comfort, safer air, and potential bill savings.
“There’s an opportunity for delivering outsized benefits to [these] residents and communities,” said Lucas Toffoli, principal of the carbon-free buildings division at clean-energy think tank RMI.
In 2023, BRIDGE Housing decided Foothill Farms would be a good candidate for energy-efficiency upgrades after Bright Power, an energy services provider, and Carbon Zero Buildings, a company specializing in decarbonization retrofits, analyzed BRIDGE’s entire portfolio of properties.
Carbon Zero carried out the electrifying changes: The turnkey contractor swapped out polluting gas-fueled water heaters for Rheem heat-pump water heaters and replaced ACs with Samsung heat pumps capable of both warming and cooling spaces. The firm also installed LED lighting everywhere, which consumes a tenth of the energy of incandescent light bulbs.
Carbon Zero’s team first piloted the complete retrofit in one unit to work out the kinks. With feedback from staff and residents, the crew honed its approach so that it could complete a unit’s upgrades in a single day during business hours.
“I love that,” said Toffoli, who wasn’t involved in the project. “Displacing folks is not only expensive and burdensome … it’s a real disruption to people who may be juggling a lot of things, like work and family, or who have limited mobility or health problems.”
In the common areas, Carbon Zero installed a new heat-pump pool heater and heat-pump spa heater, 30 EV charging stations, and 240-volt power outlets in the laundry rooms. Foothill Farms still has gas-powered clothes dryers, but BRIDGE plans to replace them with electric dryers when they conk out.
Comparing 2023 average monthly energy usage data to 10 months of data after the in-unit retrofits were completed last spring, natural-gas use has decreased by 98% while electricity use has risen 24% across the whole property, thanks in large part to the almost-magical efficiency of heat pumps.
Virtually all of the project’s $2.6 million cost was covered by state and utility grants: California’s Low-Income Weatherization Program, TECH Clean California, and the Sacramento Municipal Utility District. Other projects, though, are by no means guaranteed to see so much aid, with funding limited and awards variable, said Sebastian Cohn, senior project manager at the nonprofit Association for Energy Affordability and BRIDGE’s primary contact for the weatherization program incentive.
“It is typically in a property’s best interest to enroll [in these incentive programs] sooner than later,” Cohn told Canary Media. “The same project reserved today would receive less than half the [Sacramento Municipal Utility District] incentives Foothill Farms did due to updated incentive levels and per-project limits.”
Unlike many landlords who don’t pay tenants’ utility bills, and thus don’t benefit from energy-efficiency upgrades, BRIDGE actually had a financial incentive to make this switch to electric appliances: The organization pays for residents’ gas usage but not their electricity bills. How then did the project prevent residents’ costs from going up?
Elementary, my dear reader. Federal rules for most subsidized affordable housing protect residents from high rent and utility costs — and make sure these expenses don’t exceed 30% of their income — by requiring owners to provide what are called utility allowances, i.e., rent reductions to tenants paying their own utilities. The exact amounts are set by housing authorities and depend on locale, home size, and types of appliances. Based on the utility allowances for Sacramento when Carbon Zero pitched the project, the contractor estimated that residents would come out ahead, with each unit on average saving over $200 annually. The estimated savings for BRIDGE itself were $25,000 per year.
The real-world results match the initial project modeling very well, Cohn said, though BRIDGE declined to share specific dollar savings.
BRIDGE isn’t planning to stop with this project; a spokesperson said it’s already working with Carbon Zero and Bright Power on similar retrofits at a few other California properties.
Powering Rural Futures: Clean energy is creating new jobs in rural America, generating opportunities for people who install solar panels, build wind turbines, weatherize homes, and more. This five-part series from the Rural News Network explores how industry, state governments, and education systems are training this growing workforce.
The sputtered drone of a vacuum pump filled the former milking barn that now houses Kennebec Valley Community College’s heat pump lab. Instructor Dave Whittemore, who held the yellow vacuum in one hand and displayed an app tracking atmospheric pressure on his phone in the other, explained in a raised voice how to do an “evacuation,” ridding the heat pump of air and moisture to avoid malfunctions down the road.
“The longevity of the equipment is important,” said Whittemore, who teaches students how to install the increasingly popular electric heating and cooling units. “If it’s not done right, then it’s going to fail prematurely. And that’s the biggest reason that I personally try to keep up with industry best standards and I pass that on to my students.”
Six years ago, Gov. Janet Mills traveled to the college to sign a bill aimed at transforming Maine’s market for heat pumps, an environmentally friendly alternative to oil furnaces and gas boilers, and set a goal of installing 100,000 units by 2025.
The state, now a national leader for heat pump adoption, met that goal two years ahead of schedule, and Mills once again traveled to the rural Somerset County campus to announce a new target: another 175,000 heat pumps by 2027.
Maine needs skilled workers to reach this goal, demanding training initiatives from all corners of the state to build HVAC, refrigerant, and electrical knowledge in the clean energy workforce. Without a strong pipeline, the state risks delays in reaching its heat pump target, putting its climate goals at risk.
So far, rural counties have seen some of the fastest rates of clean energy worker growth, according to state data. In Somerset County, where KVCC is located, the number of clean energy workers has grown by 44% since 2020.
As part of this push, the community college launched a high-tech heat pump training lab in 2021 and has trained over 300 students. The initiative is one of many clean energy programs the school offers as part of a broader, state-supported effort to meet Maine’s goal of reaching 30,000 clean energy jobs by 2030.
Efficiency Maine, a quasi-governmental agency that oversees the state’s energy efficiency programs, has invested more than $400,000 in installation and weatherization training programs at KVCC and supports 29 similar programs at other institutions each year.
Another key piece of state support comes through the Governor’s Energy Office’s Clean Energy Partnership, which has awarded nearly $5 million in grants for clean energy training and apprenticeship programs across the state since 2022 and has seen over 3,500 participants. Businesses have also developed their own on-the-job training programs to help meet demand.
But the state still faces a daunting challenge: It must employ more than 14,000 new workers to reach its goal of 30,000 clean energy jobs by the end of the decade. Between 2019 and 2023, the number of workers in the field grew by less than a thousand.
While the state says it remains dedicated to this goal, some in the industry worry federal funding cuts and tariffs could create challenges for the workforce development pipeline.
Heat pumps have emerged as a pillar of Maine’s clean energy strategy: The units can reduce carbon dioxide emissions between 38% and 53% compared to a gas furnace, according to a 2022 study in the academic journal Energy Policy, and have been touted as a way to reduce energy costs.
Rural areas have historically spent more on energy bills and participated less in residential energy and efficiency financing and rebate programs to lower costs, according to a state report from 2023. To help rural Mainers overcome geographic barriers in accessing cost-lowering energy initiatives, the state must bolster its rural workforce, according to a 2018 study the Island Institute produced in partnership with the Governor’s Energy Office.
The demand for cleaner energy has grown not only in response to the state’s climate goals, but also as Maine’s electricity costs rise. A Maine Monitor analysis showed that electricity costs increased at the third-highest rate in the U.S. between 2014 and 2024.
A Maine Monitor analysis of 2023 U.S. Department of Energy and Bureau of Labor Statistics data prepared for E2 shows that two-thirds of the state’s clean energy jobs were in the energy-efficiency sector, while about a fifth of jobs were in renewables.
Workforce development has become a priority for the state as the clean energy industry grows, said Tagwongo Obomsawin, the program manager for the state’s Clean Energy Partnership, noting that it can provide good paying jobs for Mainers and reduce energy costs.
“Employers are definitely a really important part of the picture, but we don’t want to leave out anyone,” Obomsawin said. “We recognize that training providers, academia, state government, organized labor, and industry all have a role to play in making sure that we have a robust system that supports people in finding job opportunities, getting access to training, and localizing the benefits of the energy transition.”
Heat pump training is just one of several clean energy programs offered through the Maine Community College System, which includes KVCC. The system works with industry and state leaders to grow the workforce. The network of schools also trains students in electric vehicle maintenance, fiber optics, aquaculture, and more.
Dan Belyea, the system’s chief workforce development officer, said short-term training and scholarship funding are centered on needs that arise in the industry, which the schools gauge by looking at labor market data and talking to employers. Programs that are highest in demand tend to include electrical and heat pump training, Belyea said.
In 2022, KVCC hoped to use a nearly $250,000 grant from the Clean Energy Partnership to offer programs on electric vehicles and NABCEP solar photovoltaic installation. But trouble finding instructors and low interest among students made it difficult to launch.
Other clean energy workforce initiatives have popped up across the state. Some employers run their own heat pump or solar installation training labs, and several adult education programs and nonprofits also offer classes designed to help people move into the industry.
PassivhausMAINE, a Freeport-based organization, received $180,000 in Clean Energy Partnership money in 2022 to host training programs on the state’s energy code. The company ran 29 trainings across the state, from Portland to Presque Isle.
Naomi Beal, executive director of passivhausMAINE, noted that getting enough students to attend the training was easier in areas like Portland but trickier in more rural areas.
“I always feel like it’s very important to consider when going into Greenfield or Machiasport or wherever that there are just not that many people. … So if we get five people showing up, that’s probably statistically way more interest than [a larger number of attendees] down in Portland,” Beal said. “We just try to be patient and persistent with the smaller towns and the smaller attendance.”
In Freeport, Scott Libby, the owner of Royal River Heat Pumps, walked through his training center as he explained that all his workers go through heat pump training that starts with the basics, regardless of experience, to ensure each worker is equipped to handle the job.
“A lot of these heat pumps have 12-year warranties,” Libby said. “That’s 4,380 days. The most important day is Day 1. It needs to be installed properly.”
Libby, who has worked with the U.S. Department of Energy on workforce development and sits on a new energy-efficiency workforce subcommittee being developed by the Governor’s Energy Office, said he’s aware of a number of different workforce development initiatives but that it’s difficult to comprehend how they all work together.
He said some forms of programming aren’t sufficient for what’s actually needed in the field: Students who sit through a six-week or six-month program that teaches the basics of how heat pumps work may come out with little to no hands-on experience with a power tool or climbing a ladder.
Libby emphasized the need for more collaboration between different workforce development efforts and a more systematic approach, with quality checks in place. He suggested putting more thought into designing industrial arts and home economics programs in middle and high schools to introduce students to different career pathways early on.
He also said more stringent licensing requirements could help with the quality of workers moving into the field. As it stands, there is no specific licensing required to install heat pumps in Maine, though workers need an Environmental Protection Agency Section 608 license to deal with the refrigerant used inside the unit, and an electrical license to complete the wiring.
He acknowledged that new regulation could “cripple” workforce development efforts but said the move is imperative to control the level of training workers receive and make sure everyone is qualified to install heat pumps. There are hundreds of contractors listed as qualified heat pump installers on Efficiency Maine’s website, a list he said in his opinion should be much shorter.
At KVCC’s heat pump lab, Whittemore gestured at eight heat pumps mounted on prop walls used for training, listing the types of new units he hopes to get soon — ideally through donations from companies who have given units in the past.
Regulatory changes to refrigerants that went into effect this year mean the school needs to replace the heat pumps it uses to train students.
“Most of the procedures with the new refrigerants are the same. It’s just that we can’t put this new refrigerant in these existing heat pumps,” he said. “So I’ve got to get eight new heat pumps.”
The broader challenge he sees for the industry is tariffs, which he fears could lead to higher equipment prices and lower demand. This, in turn, could mean a lower need for workers.
“I think that’s going to slow this down,” he said.
Maine has two years to reach its goal of installing 275,000 heat pumps and five years to reach its goal of 30,000 clean energy jobs. But uncertainties in building Maine’s workforce lie ahead.
The Clean Energy Partnership Project, which has funded many of the state’s clean energy workforce development programs, typically announces new grants in the summer, but the Governor’s Energy Office stopped short of committing to another round of funding this year.
“We can’t predict the future, but the existing programs that we have will continue on for at least another couple of years,” Obomsawin said.
She said a partnership the Energy Office has with the Department of Labor to provide career navigation services will continue into 2026, as will workforce development programs that received funding and are already operational. But she cautioned that it is still too early to know what impact policy changes at the federal level will have on the clean energy sector.
Efficiency Maine said that the state is still on track to achieve its heat pump goals — at least for now. Executive Director Michael Stoddard said that the heat pump rebate program has funding from the Electric Utility Conservation Program and the Regional Greenhouse Gas Initiative for at least the next three years.
However, some smaller initiatives, such as a revolving loan to help Mainers buy new heat pump systems, face uncertainty as the federal grants funding the project are in flux.
Libby, of Royal River Heat Pumps, has 40 years of HVAC industry experience and said funding uncertainty will make it a challenge to reach the state’s heat pump goal.
“I think it’s definitely going to be harder,” Libby said. “I mean, I’m not ready to give up on it yet. I don’t think anybody is ready to give up on it.”
This reporting is part of a collaboration between the Institute for Nonprofit News’ Rural News Network and Canary Media, South Dakota News Watch, Cardinal News, The Mendocino Voice, and The Maine Monitor. Support from Ascendium Education Group made the project possible.
A correction was made on May 27: A previous version of this story misstated the name of the Freeport-based organization that received Clean Energy Partnership money. It is passivhausMAINE, not PassivHaus.
Maine’s new energy-efficiency plan is projected to lower electricity bills for the state’s residents — even those who don’t directly benefit from its rebate and incentive programs.
The plan, set to go into effect in July, is heavily focused on getting electric heat pumps in as many homes as possible. It comes as other states debate rolling back efficiency programs funded by utility customers as a short-term fix to rising energy prices. Maine’s strategy takes the opposite approach: It leverages investments in efficiency and electrification to lower rates for everyone.
“This is bucking the trend,” said Michael Stoddard, executive director of Efficiency Maine Trust, the agency that administers the state’s energy-efficiency plans. “This is our pathway to managing electricity prices while also transitioning the consumers of our state to the highest-efficiency, lowest-polluting equipment that is available.”
Maine has been an aggressive adopter of home heat pumps in recent years. In 2019, the state set the goal of deploying 100,000 heat pumps by 2025, a target it blew by two years ahead of schedule. The state now aims to get another 175,000 heat pumps up and running by 2027. Maine is also a member of a five-state coalition that is collaborating to boost heat pump adoption, lower prices, and train installers throughout New England.
The state’s new energy-efficiency plan is geared toward continuing this progress. It is centered largely on the idea of “beneficial electrification,” a somewhat jargony term that refers to switching from fossil fuels to electricity wherever the move would save money and cut emissions. There are plenty of opportunities to make that swap in Maine, where roughly half of households keep warm with heating oil, which can be pricey and inefficient.
Over the next three years, the incentives in the plan are forecast to support 38,000 new whole-home residential heat pump systems — including 6,500 in low-income households — and weatherization for 9,900 houses. A low-income household can get rebates of up to $9,000 for heat pump installations, and homes at high income levels qualify for up to $3,000. The incentives do not offer any money for residential fossil-fuel-burning equipment.
This strategy should decrease annual heating costs by more than $1,000 each for homes that switch to heat pumps from oil, propane, or electric baseboard heat, but it is also expected to lower electricity prices across the board, Stoddard said. Efficiency Maine Trust estimates the plan will suppress electricity rates by more than $490 million over the long term.
How? Utilities have certain fixed costs, such as maintaining power lines. To pay for them — and this is a bit of a simplification — they essentially divide the expense by the amount of power they expect customers to use in a year, and add that number to the rate they charge per kilowatt-hour. When more heat pumps come online, power demand goes up, so the fixed costs are spread out over more kilowatt-hours, lowering bills for the average consumer.
Accomplishing that effect depends on finding ways to make sure much of the added demand occurs during off-peak hours, when there is plenty of room for more power to flow along the lines without building out more infrastructure and thus increasing the utilities’ fixed costs. To achieve this timing, Maine’s plan includes demand-response programs that pay consumers for using less energy at peak times, an incentive for low-income residents to buy electric vehicles with chargers that can be set to work at off-peak times, and other measures.
“We’ve already invested a lot of money in the grid, and yet it sits largely unused for many hours of the day,” Stoddard said. “If we can find ways to manage consumption so that it is occurring during off-peak periods, then it will maximize the use of the grid infrastructure and spread the fixed costs of the utility across many more kilowatt-hours.”
Maine’s plan also includes an innovative program that calls for Efficiency Maine Trust to negotiate with retailers and distributors for discounted prices on electric water heaters and for agreements to keep the equipment in stock. The strategy is particularly effective at getting people to switch from fossil-fuel water heaters in moments when their old equipment has failed and they are searching for an affordable, easily available replacement, said Erin Cosgrove, director of policy and programs for the nonprofit Northeast Energy Efficiency Partnerships.
“This program is unique for the Northeast,” she said.
More states have prioritized electrification in their efficiency programs in recent years, said Mark Kresowik, senior policy director for the research group American Council for an Energy-Efficient Economy. Massachusetts, for example, phased out its incentives for oil and gas equipment last year, and Washington, D.C., has also eliminated rebates for fossil-fuel-powered systems and appliances.
“What a lot of programs across the country are doing is recognizing that providing incentives for fossil-fuel-based systems doesn’t achieve their goals,” he said. “Most of the leading states are prioritizing efficient electric appliances like heat pumps going forward.”
Energy-efficiency programs have traditionally centered the big-picture goal of helping consumers lower their energy use to save money and reduce greenhouse gas emissions, whether that energy comes from an oil-delivery truck, a natural gas pipe, or over power lines.
Amid rising concern about climate change, however, more states have looked for ways to amplify the emissions impact of their programs. The solution has been to limit or eliminate incentives for fossil-fuel equipment and lean into electrification, which can often save consumers money and almost always reduce the emissions associated with heating and cooling their homes.
“When you use those additional metrics, you realize some of those old measures don’t make sense anymore,” Kresowik said.
Canary Media’s “Electrified Life” column shares real-world tales, tips, and insights to demystify what individuals can do to shift their homes and lives to clean electric power.
At 420 East 51st St., nestled in the Midtown East neighborhood of Manhattan, a 13-story beige brick building sits among a handful of other hulking structures. Its tidy facade doesn’t particularly stand out. Nor does its height. In fact, from the street it’s impossible to see what makes the cooperatively owned 1962 building unique among most other apartment properties in New York City: Its residents opted to fully electrify the heating and cooling system.
The co-op board decided in 2023 to swap out the structure’s original fossil-fuel steam system for large-scale electric heat pumps that provide space heating, cooling, and water heating. Utility and state incentives covered a whopping one-third of the $2.9 million project’s cost.
The move, which the seven-member board approved unanimously, puts the co-op well ahead of the curve in complying with Local Law 97, the city’s landmark legislation limiting CO2 emissions from buildings larger than 25,000 square feet. Owners of buildings that overshoot carbon thresholds face financial penalties.
The law’s first reporting deadline is May 1, and the 110-unit co-op has hit its emissions reduction targets far ahead of schedule. With the upgrades completed last September, it’ll avoid triggering penalties through 2049.
Also known as 420 Beekman Hill, the edifice is among the first multifamily structures in Manhattan to switch to all-electric heating, cooling, and water heating, according to staff at NYC Accelerator, a building decarbonization initiative run by the Mayor’s Office of Climate and Environmental Justice.
The retrofit provides a model for the work that will need to happen in buildings around the country in order to achieve climate goals and comply with laws similar to Local Law 97, said Cliff Majersik, senior advisor at the nonprofit Institute for Market Transformation.
There are more than 30 million multifamily housing units in the U.S., 40% of which were heated with fossil fuels as of 2020, according to the Energy Information Administration.
The co-op had originally relied on the local utility Con Edison’s district steam system, which is primarily fed by fossil gas and some fuel oil. The retrofit design team weaned the building off that piped steam, solving a problem that still bedevils building owners connected to the hundreds of steam loops operating across the country, including in Cleveland, Chicago, and Philadelphia.
“Getting off steam is the most challenging transition,” explained Ted Tiffany, senior technical lead at the Building Decarbonization Coalition, who added that he was really excited the Beekman Hill project popped up on his radar. “This gives us an example” for how buildings on steam can go electric cost effectively and in a way that doesn’t disrupt tenants’ lives, he said.
The vanguard achievement in the Empire City comes as four states and 10 other locales have passed their own laws to rein in emissions from existing buildings, and more than 30 other jurisdictions have committed to adopting similar rules, known as building performance standards.
New York City’s policy was among the first such laws to be passed in the U.S.
Under Local Law 97, 92% of buildings are expected to meet emissions standards within this first compliance period, which runs from 2024 to 2029, according to the nonprofit Urban Green Council. But getting buildings to make the deeper cuts needed to cumulatively slash emissions 40% by 2030 will take a lot more action.
NYC Accelerator, which helped on the Beekman Hill retrofit, exists to support city building owners with free resources, training, and one-on-one guidance to complete decarbonization projects.
“What we’re seeing most of all is that these [retrofits] are complex and sometimes difficult,” said Elijah Hutchinson, executive director of the Mayor’s Office of Climate and Environmental Justice. “You do need to hand-hold and get to people very early.”
The accelerator is holding up Beekman Hill as a shining example of what’s doable. Last month, the office threw an open house at the co-op so other building owners could see the climate-friendly upgrades.
Ten gleaming Aermec heat pumps on the roof capture heat from the winter air and shuttle it to heat exchangers in the basement, which then deliver that heat to the building’s water-based hydronic system. The water carries the heat to each residential unit, where warmth wafts out from an unobtrusive piece of equipment called a fan coil.
Because all of the installation work, including an upgrade that tripled the building’s electrical capacity, was done outside of the living spaces, “there was no disruption to the tenants,” said Rahil Shah, engineer and director of sustainability at Ventrop Engineering Consulting Group, the firm that designed and managed the project.
In the summer, the heat pumps work in reverse, drawing heat from inside the apartments and dumping it outside. The double-duty equipment allowed the co-op to ditch its old absorption chillers that ran on Con Edison steam.
The new system also has three additional Colmac heat pumps in the basement that can give the water heated from the rooftop heat pumps a thermal boost. While those on the roof can only reach temperatures up to 110–120 degrees Fahrenheit, the basement heat pumps can reach 160°F — potent enough to store the co-op’s hot water.
Shah said this is the first time that Ventrop Engineering has used both types of heat pumps together to help decarbonize a building’s space and water heating. The firm plans to deploy the winning combo again in the future.
In all, Beekman Hill expects a 60% reduction in energy use and a 76% drop in its greenhouse gas emissions compared with running on steam. The building still has some gas stoves that it will need to replace in the coming years to go fully electric.
Without the updates, the co-op would have faced penalties of about $30,000 per year from 2030 to 2034. Fees would’ve climbed sharply afterward to nearly $90,000 per year by 2040. Plus, the building simply needed an upgrade: Its six-decade-old system was on the brink of breakdown.
What convinced the co-op to electrify? “Me,” said Randolph Gerner, Beekman Hill resident and board member in charge of capital improvements, as well as principal at GKV Architects.
“On a board, you have different expertise. My expertise is very much in this field,” Gerner said. “I’ve designed a number of buildings … and my new buildings are all electrified.”
With assistance from NYC Accelerator, Beekman Hill secured $154,000 from the New York State Energy Research and Development Authority’s Multifamily Buildings Low-Carbon Pathways Program and $1 million from Con Edison’s Clean Heat Program to help cover the project bill of $2.9 million before incentives. The co-op took out a loan to finance the rest over three years at a cost of about $15,000 to $20,000 per unit, depending on its size.
The funding actually made the project about $600,000 cheaper than the alternative — a traditional gas boiler and electric air-conditioning, Gerner said.
It’s rare that building boards have architectural and engineering design pros on them, Gerner added. So neighboring co-ops have sought him out for guidance on how to decarbonize their buildings. He’s already sat down with six other co-op boards in the past two years, he said.
Gerner’s advice for co-ops grappling with whether to embrace heat pumps is simple: “Give me a call.”
A correction was made on April 24, 2025: This story originally stated that staff at NYC Accelerator said Beekman Hill appeared to be the first co-op in Manhattan to electrify its heating, cooling, and water heating. The organization has clarified that although it is among the first, NYC Accelerator cannot confirm it is the first.
Nearly 3 million Massachusetts households will have the chance to start saving money on heating next winter under new seasonal heat-pump rates from the state’s three major electric utilities.
Regulators have approved plans from Unitil and National Grid to reduce electricity rates for heat pump owners during the region’s often-frigid winter months, and Eversource is preparing its own proposal. Together, the three utilities provide service to about 86% of Massachusetts’ households.
The goal of the rates is to accelerate adoption of heat pumps by making it cheaper to run these super-efficient, low-carbon appliances in a region where the economics of switching from fossil-fueled heating don’t always pencil out for homeowners.
“The end result, all over Massachusetts, is that this will change the numbers. It will encourage heat pump adoption,” said Larry Chretien, executive director of the Green Energy Consumers Alliance. “Then the question will be: What do we do for an encore?”
Utility regulators are already looking into that question, opening an investigation in March to determine how to make future iterations of seasonal heat-pump rates as effective as possible.
Expanding the use of heat pumps is a major part of Massachusetts’ strategy for reaching its ambitious goal of going carbon-neutral by 2050. Today, nearly 80% of the state’s homes burn fossil fuels — natural gas, heating oil, or propane — for heat. Many of the remaining homes use inefficient electric resistance heating.
The state’s climate plan calls for installing 500,000 heat pumps by 2030 to tackle emissions associated with building operations. Air-source heat pumps, the most common version of the appliance, use electricity to extract thermal energy from the surrounding air to heat and cool homes. The only greenhouse gas emissions associated with the systems are those that come from generating the electricity used.
The persistently high cost of electricity in Massachusetts — only three states had higher residential prices in January — is an obstacle for many homeowners interested in heat pumps. The Massachusetts Department of Energy Resources has expressed skepticism that the state can reach its heat pump goals without changes to current rates.
Most households now using oil, propane, or electric resistance heating would likely save money by using heat pumps, regardless of electric rates. But for many consumers using relatively cheap natural gas, the added electricity use from switching to heat pumps would drive their total costs up. That’s where seasonal heat-pump rates come into play, charging lower prices to homes using heat pumps so the added power consumption doesn’t translate into higher total energy bills.
Unitil was the first of Massachusetts’ three main investor-owned electric utilities to put forth a seasonal heat-pump rate, receiving regulatory approval in June for a discount of 7 cents per kilowatt-hour — 64% below the summer rate. Regulators then ordered National Grid to do the same; that proposal was approved in February. In the state Department of Public Utilities’ order launching the investigation into heat pump rates, regulators required Eversource to submit its own such plan by May 15 and committed to moving the proposal through the regulatory process quickly enough to make a new rate effective for the coming winter.
These lower rates are possible because utilities are essentially overcharging heat pump customers for their winter electricity use under the current system, said Mark Kresowik, senior policy director for the American Council for an Energy-Efficient Economy.
On each utility bill, customers pay, of course, for the electricity they use. They also pay a delivery charge that funds the construction and maintainence of a grid that can accommodate moments of peak demand: those few hot summer evenings when dishwashers, televisions, and millions of air conditioners are running at the same time.
In the winter, though, average demand is much lower, so the strain on the grid is much lighter. During these months, the delivery charge doesn’t properly reflect the actual costs of keeping the grid running, said Kyle Murray, Massachusetts program director for clean energy nonprofit Acadia Center.
Households that operate heat pumps in the winter are “not actually putting much stress on the system at all,” he said. “They really shouldn’t have to pay as much as they are.”
A collaboration of state agencies, known as the Interagency Rates Working Group, modeled several possible rate designs and found that a 5-cent winter discount, compared to the existing rate, could slightly increase overall costs for a household switching from natural gas. A discount of 18 cents, however, would result in significant savings across the board: A house switching from natural gas could save up to $78 per month, and a home making the move from electric resistance heat could save more than $500 per month.
Though more numbers need to be crunched, energy advocates are inclined to support a deeper discount. Because of the high cost of electricity in Massachusetts, a larger rate reduction might be needed to make a heat pump a competitive choice, they said.
“You do need a pretty significant discount in some states to ensure that a heat pump is lower-cost than a gas furnace going forward,” Kresowik said.
As part of the investigation into seasonal heat-pump rate design, regulators have asked the public to submit comments by June 2. The approach to gathering feedback is a welcome departure from the usual process, Chretien said.
In most cases before utility regulators, outside organizations can only participate if they become formal intervenors and have a lawyer representing them. It is expensive, time-consuming, and beyond the reach of many advocacy groups and most individuals, Chretien said. The request for comments from any interested parties opens up the proceedings, he said, allowing anyone with a stake in climate or energy affordability issues to participate.
“The [Department of Public Utilities] is recognizing that their normal intervention process is onerous,” Chretien said. “To me, it’s good government to do it this way.”
For this approach to make a real impact, however, regulators must have a plan for reaching out to all communities, not just the narrow slice of people who are aware of public utilities regulations and issues, said Charles Hua, founder of consumer education nonprofit PowerLines. It will be important to connect with groups of different income and education levels, to ensure everyone has a voice.
“I would not expect in a vacuum that there would be awareness,” Hua said. “I suspect they need to proactively engage communities.”
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