On A Heater

Heat pumps have surpassed gas furnaces. The goal now is net zero.

Heat pump, it’s a misleading name but a super-efficient way to keep homes warm in the winter and cool in the summer. Think of it like a two-way air conditioner. In hot weather, it whisks hot air from inside a building to outside. In cold weather, its refrigerants are still colder than the outside air, so a heat pump can absorb warm air and bring it inside. It runs on electricity, not natural gas, so it lowers greenhouse gas emissions and doesn’t come with the risk of methane leaks. For all these reasons and more, sales of heat pumps outpaced gas furnaces in the U.S. in 2022 for the first time, and there’s no looking back.

“In 30 years, no one is going to have a fossil fuel burning engine in their basement,” Dan Yates, CEO of geothermal heat pump startup Dandelion Energy, told Axios.

Pumping Up Efficiency

As global energy demand rose 1% in 2022, efficiency improvements were double their average over the previous five years. High natural gas prices stemming from Russia’s invasion of Ukraine led more Europeans to turn to heat pumps, with sales there growing by close to 40%, the International Energy Agency reported. In the U.S., heat pumps accounted for 53% of residential heating system sales.

“High efficiency electric heat pumps are a key technology to decarbonize space and process heating,” the IEA report said.

Because they transfer heat rather than generate it, heat pumps can operate much more efficiently than gas furnaces, lowering emissions by 20 to 80% depending on how clean the electricity they’re using is.

They are typically more expensive upfront to install than gas furnaces but can save consumers hundreds of dollars a year on energy bills. To entice customers, companies like OVO Energy in the UK are finding ways to cut operating costs to make heat pumps cheaper than gas furnaces. Dandelion, which operates in New York, Massachusetts, and Connecticut with eyes on expansion into neighboring states, is finding ways to be more competitive as well.

“We build our own heat pump, and we have a really groundbreaking new set of models coming out early next year,” Yates told Axios. “It’s going to be the most efficient geothermal heat pump in the country and super low-cost to install.”

The National Association of Home Builders reported that 40% of new homes built in 2021 used an air or ground source heat pump as their primary means of providing heat, up from 23% of new homes built 20 years prior.

While getting the right model for a particular climate is key to getting the best results, heat pumps have proven to stand up to harsh winter conditions.

“In the coldest parts of Europe, we also have the highest share of heat pumps. In Norway, for example, 60% of the households are equipped with heat pumps. And in Sweden and Finland it is also 40%. So, it’s definitely proven that it’s possible,” IEA analyst Yannick Monschauer told NPR.

That’s encouraging to hear, because in order to meet Paris climate goals, heat pumps will need to account for about 20% of heating and cooling in the world’s buildings by 2030, double the rate they do currently. To reach 2050 net-zero goals, the IEA says, heat pump sales need to grow by 15% each year for the remainder of the 2020s.

Carrot & Stick

To encourage continued growth of heat pump usage, governments are offering incentives for buyers and legislating out fossil fuel heating sources. For purchases made from Jan. 1, 2023, the federal government is offering a 30% tax credit, up to $2,000.

The U.S. Climate Alliance, a coalition of 25 governors representing 55% of the U.S. population, launched an initiative this fall to collectively reach 20 million heat pump installations in their states by 2030.

“We are in a climate emergency and the window to act is closing. U.S. Climate Alliance states get that. That’s why we’re taking bold, immediate action by quadrupling heat pump installations by 2030,” Washington Gov. Jay Inslee. “Heat pumps are available and affordable, not to mention better for the air we breathe. So, our commitment today is good for our planet, and for our people.”

The plan includes retrofitting existing homes and retail buildings with heat pumps and developing zero-emission codes and standards for new buildings going forward. Five of the member states (California, New York, Washington, Maryland, and Massachusetts) plan to phase out fossil fuel heating and cooling in new construction by 2027.

The California Air Resources Board plans to phase out sales of gas water heaters and furnaces in the state by 2030, though it won’t set out the rules for accomplishing that until 2025. In Northern California, though, the Bay Area Air Quality Management District voted in March to ban the installation of natural gas furnaces and water heaters in homes and commercial buildings starting in 2027. The move is expected to remove 3,000 tons of nitrogen oxide emissions per year from the Bay Area’s air.

“The 1.8 million water heaters and furnaces in the Bay Area significantly impact our air quality, resulting in dozens of early deaths and a wide range of health impacts, particularly in communities of color,” Dr. Philip Fine, executive officer of the air district, said in a news release. “This groundbreaking regulation will phase out the most polluting appliances in homes and businesses to protect Bay Area residents from the harmful air pollution they cause.”

The sooner other places follow suit, the better we’ll be able to get a handle on the climate.

“Optimizing how we consume energy is the priority of how we tackle the climate-and-energy crisis. We have all the ingredients,” Schneider Electric chairman Jean-Pascal Tricoire said in the IEA report. “What we don’t have is time: We simply can’t let more time go by before we deploy the power of electrification and digital energy-efficiency technologies to the fullest.”