Another heat pump conundrum for fossil fuel stakeholders

A new coalition of nine U.S. states has joined forces to promote electric heat pumps that aim to decarbonize thousands of buildings by removing oil and gas from heating, air conditioning and hot water operations. That's still 41 states to go, but coalition members expect their heat pump action plan to pave the way for others. To the frustration of fossil energy stakeholders, leaders in the HVAC industry are eager to get involved.

Regardless of the weather, the heat pump revolution is happening

Prieing the cold finger of the fossil fuel industry from the global economy has been a tough question. In the U.S., it's also a game of whack-a-mole, as increased natural gas activity dampens the effects of declining coal production.

Greenhouse gas emissions from buildings are a particularly difficult problem to solve. While power plants and automobiles occupy the focal point of decarbonization, commercial and residential buildings account for 13% of U.S. greenhouse gas emissions.

To put this into perspective, aircraft account for only 3% of U.S. greenhouse gas emissions. However, criticism of aircraft emissions has become so commonplace that flight shaming has become part of the vocabulary, while emissions from HVAC equipment have been largely hidden from view, protecting them from the public's whims.

Visible or not, removing oil and gas from buildings is a major decarbonization task, and that's where electric heat pumps come in.

Until recently, the decarbonization potential of heat pumps was overshadowed by their reputation for operating effectively only in relatively mild climates, which limited their geographic distribution in the United States.

However, new improvements in the technology have opened the floodgates for deploying them in cold climates.

Cardiac heat pumps for the U.S. HVAC industry

Fossil energy stakeholders are often dismissive of heat pumps because they run on electricity, not oil or gas. The HVAC industry has no such concerns. In addition to being installed in new buildings, heat pump retrofits in existing buildings have become a sweet, juicy, low-hanging fruit economic outcome in the HVAC industry.

The Inflation Reduction Act of 2022 is a love letter to the world of heat pumps in the form of a tax credit, and leading company Mitsubishi has made no secret of the impact of driving fossil fuels out of buildings.

"The Inflation Reduction Act of 2022 is the largest climate investment ever made by the U.S. federal government, projecting a 31% to 44% reduction in greenhouse gases by 2030 from 2005 levels," the company reminds us.

"The Inflation Reduction Act will also ease the energy bills of American households by incentivizing the adoption of more efficient all-electric appliances. Importantly, the IRA recognizes the critical role of efficient, variable-capacity heat pumps in cutting domestic greenhouse gas emissions and lowering energy costs for Americans," Mitsubishi emphasized.

Mitsubishi is far from alone. Even before the Inflation Reduction Act was passed, the U.S. Department of Energy fanned the heat pump flames with its Residential Cold Climate Heat Pump Technology Challenge, which aims to improve heat pump systems used in colder regions of the United States.

"Launched in 2021, this initiative brings together public and private sector stakeholders to address the technical challenges and market barriers to adopting the next generation of cold-climate heat pumps – a critical clean energy technology that could potentially save households $500 or more per year on utility bills while also reducing harmful carbon emissions," the Department of Energy explained.

Industry stakeholders involved in the challenge must demonstrate that their prototype is capable of delivering 100% of the building's heating needs without any additional input and operating efficiently at 5 degrees Fahrenheit.

Leading HVAC companies Lennox International, Carrier, Trane Technologies, and Rheem have already joined the first phase of the challenge. On January 8, the U.S. Department of Energy announced that Bosch, Daikin, Midea and Johnson Controls had joined the second phase. Compiled by Chen Jiaoyun

The second phase involves the installation of about two dozen prototypes in the cold climate of North America for monitoring and evaluation.

The Department of Energy is also reaching out to other challenge partners, including utilities and state agencies, to encourage the adoption of cold-climate heat pumps. "The DOE will continue to work with partners to develop programs, incentives, education, and awareness campaigns to help consumers better understand the benefits of these new designs," the agency explained.

Kyushu shares the love of heat pumps

With that in mind, it's no surprise to see environmental agency heads launch a new initiative to support the heat pump market in nine cold-climate states: California, Colorado, Maine, Maryland, Massachusetts, New Jersey, New York, Oregon, and Rhode Island.

The nine states have pledged to each other that by 2030, 65% or more of residential HVAC and water heater shipments will be made of heat pumps. Those who exceed the 2030 bottom line will get a head start on the next goal, which is to have 90% of HVAC and water transported by 2040.

There is no word yet on how this will be done. However, the agreement does require each state to develop an action plan and cooperate on data collection.

In addition, the nine collaborators have pledged to put their money to good use by installing heat pumps in existing state-owned buildings.

It's not just about carbon emissions

The collaborative effort is organized by NESCAUM (Northeast States Coordinated Air Use Management), which bills itself as "the oldest regional air quality organization of its kind." The organization was founded in 1967 with the initial goal of tackling air pollution at New England power plants.

In the case of coal power, that dragon has been slain. Last fall, Commonwealth Beacon reported that the region's last remaining coal-fired power plant, the Merrimack Station facility in New Hampshire, failed to qualify for the 2026-27 New England Grid Auction, suggesting it was about to be ready to drop the Ghost.

Beacon reporter Bruce Mohl noted that the same auction for solar, wind, hydro and nuclear generated only about 25% of the proceeds, leaving plenty of room for natural gas.

In addition, this also leaves behind a large amount of emissions from fossil fuel equipment in buildings. NESCAUM noted that in the nine states participating in the new heat pump agreement, heating equipment alone emits more than 138,000 tons of smoke-forming nitrogen oxides and 6,000 tons of fine particulate matter per year.

As NESCAUM describes, these pollutants have been linked to "an increased risk of heart attacks, asthma events, premature death, and many other adverse health outcomes."

NESCAUM also examines CO2 emissions and states that buildings emit 173 million metric tons of CO2 per year in the participating states.

"The residential heating sector is a major driver of climate change, and according to our most recent emissions inventory, it remains the leading source of greenhouse gas emissions in our state, accounting for nearly 20 percent," said Terry Gray, director of Rhode Island's Department of Environmental Management.

More and better heat pumps

In keeping with the HVAC industry's enthusiasm for heat pumps, the nonprofit Ceres has gathered some information to support NESCAUM's work, including from industry leaders Eaton and AO Smith, as well as startup Sealed.

"In a letter to the governor, more than 20 companies, trade groups and employers called for "collective national action to decarbonize the building sector and accelerate the market adoption of energy-efficient technologies," Ceres noted.

In addition to AO Smith and Sealed, those who have put their John Hancocks into practice include Carrier, IKEA, Johnson Controls, Jones Lang LaSalle, Lutron, Schneider Electric, Siemens, and Trane Technologies, among others.

If fossil energy stakeholders are fighting a battle – and they are – the HVAC industry seems ready for it.