Back
The U.S. is a nation of air-conditioned houses, and this ubiquitous cooling machinery drives an outsize chunk of the country’s electrical demand, especially during heat waves. Now, as utilities scramble to meet even more power demand for AI computing, legacy air-conditioning giant Carrier has launched a new business venture to make regular old HVAC equipment part of the solution.
The concept is simple enough: Put a battery on central ACs that can charge up when energy is plentiful and take over the job of running the appliances when the grid is stressed. But actually doing that requires grappling with the forces that shape America’s energy system — monopoly utilities, regulators, decentralized energy, intermittent renewable power, and the looming colossus of data centers’ energy consumption.
“The homes we have and the fact that they all have air conditioning or a heat pump defines how the grid is sized, built, and operated today,” said Hakan Yilmaz, Carrier’s chief technology and sustainability officer and head of its energy-solutions arm, in an interview at this month’s RE+ conference. “The [U.S.’s] peak load is about 750 gigawatts — that’s what the grid can manage today. Around 300 gigawatts of that is reserved for HVAC.”
Now Carrier has begun installing its HVAC-connected batteries in a pilot test with utilities to prove that the product works in customers’ homes. Some 15 households have the batteries already, and the company plans to install more by the end of the year. The Electric Power Research Institute, a nonprofit that studies emerging grid technologies to inform the power sector, will document the performance.
“We want to measure the reality of what happens — the profile of load shifting across weather conditions,” said Ron Domitrovic, senior program manager for electrification and customer solutions at EPRI.
Carrier hopes to eventually scale up the plan by getting electric utilities to pay for the batteries when households in their territory buy the company’s air conditioners. Then Carrier would operate the batteries based on signals from each utility, charging the devices at times of cheap, clean energy — like during midday in regions with lots of solar generation — and powering the cooling system directly from the battery when electricity demand surges.
“If we replace an HVAC unit today with a battery-integrated HVAC, the load of that HVAC unit never shows up at the peak for the next 15 years,” Yilmaz said. “Use that electricity somewhere else, [like] in the data center.”
Carrier’s market domination — the company has been making air conditioners since its founder, Willis Carrier, invented the thing in 1902 — means that it could scale up and reach far more households far more quickly than residential batteries have thus far.
Carrier, in short, is the rare century-old incumbent trying to shake up its own business to respond to the dynamic shifts in the contemporary energy market.
“Air conditioners really rely on electricity, and in most parts of the world the electricity is still being powered by fossil-based sources,” said Ankit Kalanki, who studies HVAC climate impacts as a principal on the carbon-free buildings team at think tank RMI. “The most demand for air conditioning happens on the hottest days, and at that time the grid is already under strain.”
The power mix gets dirtier in the peak hours — California regularly runs on huge amounts of solar power at noon on sunny days but fires up its gas-burning peaker plants to meet demand in the evenings. So HVAC use at peak times exacerbates carbon emissions and challenges the grid’s ability to deliver enough power.
To mitigate those effects, Yilmaz’s team at Carrier designed a modular battery that sits under or next to its outdoor HVAC units and matches their electricity consumption during peak hours. The batteries range from 5 to 10 kilowatt-hours.
The alternating-current electricity from the home gets converted to direct current for storage in the battery; then the battery supplies DC power right into the HVAC equipment. The duo operate like a nanogrid, connected to the house but separate from all the other appliances. This improves efficiency compared to shipping electricity into and out of a general home battery, losing some energy on each AC-to-DC conversion.
Carrier’s software tracks when the grid supply is “cleaner, greener, cheaper, and more resilient,” Yilmaz said. The goal would be to load up at the cheapest and cleanest times to offset demand in the more expensive and carbon-intensive hours.
Of course, that interaction with the broader energy system goes beyond the usual scope of an HVAC vendor.
“Carrier has a scale that can really make this a much more viable solution for consumers, but it will require the right channels and the right partners to make it happen,” Kalanki said. “It has to be a collaborative effort between utilities and manufacturers and also consumers.”
Carrier has already worked to get utilities on board — hence the testing with EPRI, designed to show the hardware and its controls are up to the industry’s specifications. The company convened an advisory board of utilities covering “the most congested grids” across the country, Yilmaz said. Some of them want to dispatch the batteries based on day-ahead signals, others want to toggle them in real time.
Clearing that hurdle, Carrier wants to help utilities win regulatory approval to pay for these batteries on behalf of all their customers. Regulators have long granted funds for utilities to invest in energy efficiency or demand reduction for individual households as a way to save money for consumers as a whole.
In theory, these HVAC batteries could deliver all the benefits that distributed-energy startups have pitched over the last decade or two: They could defer or eliminate upgrades to the distribution or transmission grid; reduce the need for expensive, fossil-fueled peaker plants; expand utilization of renewable power by shifting it from hours of surplus; and, that new imperative of all grid planners, free up valuable peak capacity for data centers and factories.
That last point also answers the question of why utilities would go for a concept that seemingly threatens their traditional business model. Regulated utilities earn guaranteed profits from building things, like grid expansions or new power plants; Carrier’s plan would diminish the need for those investments. But in the AI era, customer-sited energy devices could look less like a competitive threat and more like a helpful tool as utilities race to catch up with skyrocketing demand.
“We want this technology to work for the utilities so that they can provide more affordable and reliable power to homeowners and industrial growth companies,” Yilmaz said. “It’s a win-win for everyone.”
Consumers can already reduce their peak demand with tools like smart thermostats that turn down HVAC usage, smart plugs that turn off devices, or smart chargers that delay when an electric vehicle refills its battery. But those techniques generally impose some inconvenience, like a warmer home during peak hours or a task delayed to later.
“People tend to think about energy efficiency in isolation and don’t think that cooling is a people-centric issue,” Kalanki said. “HVAC systems are enabling people to feel comfortable on the hot, humid days of the year. In trying to solve for efficiency or the emissions problem, you can create a thermal comfort problem, which should not be the case.”
Also, for many households, Yilmaz noted, the air conditioner is the biggest purchase after a home and a vehicle.
“We have such a big investment from the homeowner, and when they need it the most, the hottest day of the year, you ask them to [dial it back],” he said. “It is very counterintuitive. We think we can do better.”
The software to accomplish this will be powered by Carrier’s acquisition of Viessmann Climate Solutions, a home-energy-management company from Germany. That team includes a large group of software engineers who manage everything from solar to batteries and heat pumps in Europe, Yilmaz said, providing Carrier expertise to lean on as it works to control batteries in the U.S.
The residential battery market, led by brands like Tesla and Enphase, keeps setting records: Last year, homes in the U.S. installed more than 1,250 megawatts of capacity. But the scale of home air-conditioning adoption is staggering compared to residential batteries so far.
Two-thirds of U.S. households use central air conditioning (or heat pumps), and those systems need to be replaced every 10 to 15 years. That translates to around 7 million home HVAC units getting swapped out every year, and Carrier alone sells about 2.5 million of those. The average peak HVAC consumption is 3 kilowatts, Yilmaz said. That math works out to an average of more than 20 megawatts of new electricity demand installed every day from Carrier HVAC alone.
Put another way, if Carrier can get to the point of selling batteries alongside just 16% of its U.S. HVAC units, it would singlehandedly match the current rate of home battery deployment nationwide. Something like that seems eminently doable, over a few years, if Carrier can bring along a handful of the biggest utilities and their regulators.
The company also has to convince customers to participate, even if the battery is free. Domitrovic, from EPRI, noted that the Carrier batteries come with “limited” or “potentially undetectable” impacts on the consumer, while conferring good things like bill savings and greater grid reliability.
The bill savings could be significant, provided that the customer pays different rates for electricity during peak and off-peak times. That approach has been adopted via “time-of-use” rates in some utility territories. Carrier envisions that the batteries would charge up during the hours when customers pay a lower rate, then would reduce consumption in the hours when power prices surge. (Some energy is lost in the process of storing and retrieving electricity, but Yilmaz said utilities can compensate customers so they aren’t negatively affected.)
Volunteering for an HVAC battery also could incrementally reduce the risk of local outages during extreme weather, but is that something that motivates the average person to raise their hand? Perhaps an up-front cash bonus would do the trick. Carrier is considering a range of possible incentives, and finding the right consumer-psychology strategy will be a crucial step for the plan to succeed.
.svg)
