State Promotion of Heat Pumps Challenged by Labor, Grid Issues

States promising to quadruple the current number of heat pumps in the US face shortages of the workers who install the systems, an electric grid that still relies heavily on fossil fuels, and questions about how to best steward millions of federal dollars.

Twenty-five US states comprising the US Climate Alliance are creating new programs and leveraging federal funds to install more heat pumps. The heating and cooling systems, which have been around for more than a century but are quickly gaining popularity, are a cleaner alternative to furnaces and air conditioners that could cut greenhouse emissions drastically, especially when joined with other types of climate policy.

The move was billed as an inexpensive, relatively quick way to decarbonize one of the country’s largest sources of greenhouse gasses: buildings.

Now, states are figuring out how to get started.

But the effort faces challenges. HVAC and electrical industry workers are dwindling, fossil fuels power around 60% of the US electric grid, and the country could face the same lack of public understanding that other countries faced when investing in heat pumps.

“We made a big commitment, and now is when we get to work,” Casey Katims, executive director of the US Climate Alliance, said in an interview. “I think that we will look back and think about the time before we predominantly relied on heat pumps to cool and heat our homes.”

Last year’s federal Inflation Reduction Act already created tax credits for heat pump installation and a home energy rebate program that gives millions to states for weatherization and electrification projects. Compounding those dollars are new state-level programs announced last week.

“IRA implementation is an all-hands-on-deck effort,” Katims said.

Maine Gov. Janet Mills (D), whose state has average winter temperatures that are often below 15 degrees, says she wants to install 175,000 new heat pumps over the next two years. The push follows her 2019 initiative that installed 100,000 new heat pumps—and met its goal two years ahead of the 2025 target, she said.

“People are seeing the efficiency, the comfort,” and the financial benefits of heat pumps, Mills said onstage Sept. 21 at Climate Week NYC.

The state is poised to receive $70 million in Inflation Reduction Act funds to help its new goal, said Dan Burgess, director of the Maine Governor’s Energy Office.

Price volatility of legacy fuel sources is a major driver of Maine’s heat pump goals. The state doesn’t produce any of its own fossil fuels, so it spends around $4 billion annually bringing oil and natural gas products into the state, Burgess said.

Fighting Heat Pump Barriers

The fossil fuel industry has previously pushed back on heat pump programs in Maine and surrounding states.

In 2021, the Maine Energy Marketers Association and six other similar groups penned a letter to New England governor warnings of potential winter grid stress due to increased electricity use from the systems. The groups maintained that while they shared net-zero goals, heat pumps were not the way forward for fragile grid systems.

“Our states should immediately abandon efforts to convert homes to natural gas or electric heating. The lives of our states’ residents — your constituents — may very well depend on it,” the letter said.

The fossil fuel industry “and their friends in politics will continue to fight against these programs and spread misinformation about the cost and effectiveness of heat pumps,” said Mike Faulk, deputy communications director in Washington Gov. Jay Inslee’s (D) office.

Heat pumps transfer heat and cold from outdoors to indoors using electricity. They can reduce greenhouse gas emissions by at least 20% compared with a gas boiler, even if they run emissions-heavy electricity, according to the US Energy Information Administration. In countries with cleaner electricity, reductions can reach 80%.

That’s why cleaning up the electric grid is an important “parallel strategy” to deploying more heat pumps, Burgess said. Maine generated 72% of its electricity from renewable sources in 2021, but that percentage slipped from the previous year due to increased generation using natural gas, according to the EIA.

“Decarbonization of the electricity grid is key to decarbonization of the building sector and a number of other key sectors of our economy,” Katims said. “It relates to the embodied emissions that are in construction materials used to build homes. But it’s also about the power that homes are pulling from.”

Along with the US Climate Alliance’s heat pump commitment, member states also agreed to use eight other supporting strategies. Among them are measures to mitigate volatile energy prices, enhance the grid’s reliability, and increase the number of contractors who know how to install heat pumps.

Maine is fighting the latter issue with community college programs and other methods to increase the pipeline of workers, Burgess said.

“We need to train a lot more electricians,” he said.

One of the most important additional commitments from states is a pledge to identify ways to streamline all the local, state, and federal heat pump incentives so consumers can stack them, Katims said.

Washington state is taking several avenues to shore up heat pumps and related infrastructure, and the relationship between state and federal dollars is central to its goals. Its new “cap-and-invest” program, for instance, dedicates $150 million of state funds to making heat pump installation affordable. That amount will grow the $180 million in federal funds that Washington is also expecting, Faulk said in an emailed statement.

“We will ask the Legislature to dedicate more funds for heat pump installations in coming sessions,” he said.