Heat pump technician on a home exterior using the heat pump incentive money to get more heat pumps installed.
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Heat pumps get a boost

Is There a Heat Pump in Your Future? A Lot of Governors Hope So.

Daren Wang
October 27, 2023

Heat pumps are cost-effective, efficient, climate-friendly, and seldom installed in the United States. But if the country is going to reach its net zero goals over the next two decades, heat pumps will need to become a much more popular option.

A big step was taken earlier this month to make that a reality.

Explore the Future of Home Heating: 25 Governors Pledge to Boost Heat Pump Adoption

In a landmark move to combat carbon emissions from homes and buildings, the governors of 25 states, representing over half of the U.S. population, pledged to accelerate the adoption of heat pumps. The plan, unveiled on October 17 during the Climate Week NYC 2023 event in New York City, is part of the U.S. Climate Alliance's efforts to address the pressing issue of decarbonizing home heating. The coalition’s stated goal is to install 20 million heat pumps by 2030, a target that necessitates quadrupling the current installation rate.

The advantages of heat pumps are clear: under most conditions, they are about three times more efficient than heaters that run on electric resistance or furnaces fueled by fossils, such as gas, coal, or oil. And even in the most extreme cold, they are twice as efficient. And because they run on electricity, they can be fueled by clean, renewable energy.

This efficiency, combined with existing state and federal incentive programs, has already led to increased heat pump adoption in the U.S., with h sales surpassing those of gas furnaces for the first time last year. But the transition to cleaner technology is happening much too slowly to reach the nation's goals.

Heat pumps are currently used in only about 16 percent of the approximately 140 million U.S. homes. And in many areas of the country, HVAC installers continue to discourage buyers from purchasing heat pumps out of misunderstanding the technology's advantages.

An old technology, newly relevant

But what, exactly, is a heat pump? They are essentially reversible air conditioners. The technology, pioneered by Willis Carrier in 1902, also drives our refrigerators and freezers. In essence, the mechanism gathers heat and humidity and moves it via a compressible gas. When it is cooling a home, it shifts the heat out of the building. When it warms a home, it gathers warmth from the outside and pumps it indoors.

These machines are incredibly efficient, using two to four times less energy than traditional gas furnaces for heating, thus reducing the carbon impact of home heating. In fact, the reduced carbon emissions from a modern heat pump can offset its manufacturing carbon footprint in just over a year. However, they still face resistance in the American market, most notably because of the idea that they do not perform well when it’s cold out.

Heat pumps have already become the default choice in some of the coldest places in Europe. In the Nordic region, the governments of Sweden, Finland, and Norway all promoted heat pumps as a path toward energy independence and climate responsibility in the earliest years of the century. Now, four in ten homes in that region use heat pumps. Cumulatively, adopting heat pumps in the Nordic region has led to a 72% drop in carbon dioxide (CO2) emissions from heating in Finland, 83% in Norway, and 95% in Sweden.

Maine leads the way

In the U.S., the state that has shown the quickest adoption of heat pumps is also one of the coldest.

In 2019, Maine’s governor, Janet Mills, set an ambitious goal of installing 100,000 heat pumps in her state by 2025 as part of its climate strategy. In August 0f 2023, she announced that Maine had surpassed that goal two years ahead of schedule, with over 104,000 heat pumps now installed in homes and businesses. With the winds of change at its back, the state promptly set a new goal to install an additional 175,000 heat pumps by 2027.

At a ceremony announcing the new goals, Governor Mills said, “We are setting an example for the nation. Our transition to heat pumps is creating good-paying jobs, reducing our dependence on fossil fuels, and lowering costs for Maine families, all while enhancing their home comfort – a significant achievement for our state.”

An essential part of Maine's strategy has been to create programs to train installers and service technicians on the equipment. Encouraged by the governor's office, several of the state's community colleges have opened programs specializing in heat pump technology. With state-wide incentives and rebates in place and trained technicians available, both cost and practical barriers to adoption have disappeared, and heat pumps have become a popular choice in one of the country's coldest states. (3)

Making heat pumps affordable

One of the challenges for heat pumps is a higher initial price tag. On average, homeowners can expect to spend around $5,500 for a new unit. But if the home doesn’t have existing ductwork that can be adapted, installation costs can jump to $30,000 or higher.

Overcoming cost barriers and achieving widespread adoption of heat pumps will require a mix of upfront incentives and clever financing structures. The Inflation Reduction Act has introduced new federal tax credits, and state-level incentives, efficiency standards, and building codes have played a significant role in driving adoption in some states.

California, for example, has set building codes and air-quality regulations that will primarily require heat pumps in new buildings starting in 2030. The state also offers incentives for heat pumps and heat-pump water heaters. Other states in the U.S. Climate Alliance have imposed regulations limiting fossil fuel use in new buildings.

To achieve the goal of installing 20 million heat pumps by 2030, U.S. Climate Alliance members will need to double down on existing state and utility incentives, especially those focused on lower-income households. The successful implementation of forthcoming Inflation Reduction Act incentives will also be crucial.

While this pledge by 25 states is a significant step forward, it is worth noting that to achieve the broader U.S. goal of reaching net-zero carbon emissions by 2050, the entire country must triple today's heat-pump adoption rates by 2032, according to the nonprofit advocacy group Rewiring America. The challenges ahead are substantial, but the commitment to heat pumps is a positive stride toward a more sustainable future.

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