Last October, the governors of 25 Democrat-led states composing the U.S. Climate Alliance signed a collective pledge.

No, they weren't promising to defy the orders of a potential Trump administration in 2025. The real answer is less exciting, but still important.

They agreed to quadruple the number of heat pumps in U.S. homes by 2030, from the current level of 4.7 million to 20 million. That’s a lot of heat pumps.

So, what are heat pumps and why are policymakers offering Americans thousands of dollars (in tax credits) to install them in their homes?

Heat pumps: sustainable home heating

Heat pumps are devices that can heat or cool a building. They use electricity (and physics) to transfer heat, rather than generating it, making them more energy-efficient than other kinds of home heating or cooling systems.

Heat pumps can replace oil or gas furnaces that emit greenhouse gases and contribute to global warming.

Key Facts:

• About 15% of American households have a heat pump

• Heat pumps last between 10-15 years and cost an average of $8,000 to install

• They are 3-5 more energy-efficient than traditional heating systems

• Buildings currently produce more than 30% of global greenhouse emissions worldwide

There are two main kinds of heat pumps: air-source heat pumps (ASHPs) and ground-source heat pumps (GSHPs).

Air-source heat pumps: ASHPs harness the ambient heat from the outdoor air, even in colder climates, and efficiently transfer it indoors for heating purposes. By reversing the process, they can also cool indoor spaces during warmer months.

This technology has become a go-to option for residential heating and cooling, offering a cost-effective and environmentally-friendly alternative to traditional HVAC systems.

Ground-source heat pumps: GSHPs, also known as geothermal heat pumps, tap into the stable temperature of the ground below the Earth's surface.

While the installation cost is higher compared to ASHPs, GSHPs boast higher efficiency levels and a reduced environmental impact. These systems are particularly well-suited for regions with consistent temperature patterns.

The hard part: Manufacturing & installing heat pumps

For the U.S. Climate Alliance to reach its goal of quadrupling the number of heat pump installations over the next six years, a few things need to happen:

• More Americans need to learn about heat pumps — and decide to install them in their homes.

• Heat pump manufacturers need to start producing more to make up for growing demand.

• Universities & employers need to train more people to become heat pump technicians

In 2022, the Biden administration and Congressional Democrats passed legislation aimed at achieving these three related goals.

The Inflation Reduction Act, passed in August 2022, includes tax incentives and government grants aimed at encouraging the expansion of heat pump manufacturing and training for heat pump technicians.

It also includes the High-Efficiency Electric Home Rebate program, which provides Americans with cash (in the form of tax rebates) to help defray the cost of heat pump installations and other energy-efficiency devices like rooftop solar panels or electric water heating systems.

Some Americans are eligible for up to $8,000 in tax rebates for heat pump installation. Electrification non-profit Rewiring America offers a handy calculator tool that can show you how much money the Inflation Reduction Act’s clean energy tax rebates can save you:

Heating the future

These policies seem to be working so far. Heat pump sales grew 11% in 2022, surpassing gas furnace sales for the first time.

Installing more heat pumps nationwide fits with a broader goal of electrifying America's power grids and moving away from reliance on fossil fuels as an energy source.

Lauren Urbanek, who oversees the Climate & Clean Energy Program at the Natural Resources Defense Council, explained:

Journalist Courtney Lindwall, a contributor to the Natural Resource Defense Council, wrote up an excellent summary of how electrification of the power grid fits in with broader goals of decarbonizing our economy:

The article above is worth checking out if you want to understand how different things like heat pumps and electric vehicles fit in together as part of a broader green transition.

Regardless of where you stand on climate change and the green transition, it’s clear that heat pumps offer an energy-efficient alternative to traditional home heating systems.

Regardless of whether the Climate Alliance reaches its lofty goal, heat pumps are here to stay.

ART OF THE DAY

Thank you for reading. Please reply to this email if you have any thoughts or feedback.

Yours,
Dan