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The Perfect Solution, and Why it is Not Working

Posted by Charley Cormany, EFCA Executive Director

Recently, California has made great progress in setting and charting a course toward ambitious energy and climate goals. There is, however, one huge regulatory and political roadblock that’s creating a barrier to achieving greater savings by blocking one of our most promising technologies: heat pumps.

Why Heat Pumps are Good for California

Heat pumps are devices that transfers heat to the air (air source heat pumps) or the ground (ground source heat pumps or geothermal). In residential use the most common applications of heat pump technology has been in heating and cooling systems. The focus of this discussion is on air source heat pumps.

In California, because of our mild climate and summer cooling requirements, heat pump technology is a proven and ideal solution to achieving energy savings. (This humble home appliance could be San Francisco’s secret climate weapon.) Leaders in the residential energy efficiency sector have embraced heat pump technology as the “go to” solution for heating, cooling, and domestic hot water production. (The Shocking Truth About Heat Pumps.) Combined with site-produced electricity from solar panels, heat pumps are paving the road to Zero Net Energy. We should all embrace this technology and encourage its adoption as fast as we can.

By comparison, gas furnaces do a good job but they have limitations. Some of the best performing gas furnaces are rated as high as 97 or 98 percent efficient. Physics limits further gains, as the combustion process is never 100 percent efficient.

Gas furnaces rely on burning fossil fuels, typically natural gas or propane, neither of which are a long term solution from a carbon footprint perspective. By contrast, heat pumps rely on electricity and refrigerants instead of combustion, and have long been achieving over 100 percent efficiency. In fact, properly designed and installed heat pumps routinely achieve over 300 percent efficiency. This extreme performance has been verified on installed systems in real homes, not in a lab environment with perfect conditions.

Heat pumps are not some mystery technology: they have been around for years. In fact, the concept was first proposed by Lord Kelvin in 1852 and the first working system was created in 1855 by Peter von Rittinger. (The History of Heat Pumps)

In the 1970s use of heat pumps grew due to the oil embargo and the high cost of petroleum based fuels. Unfortunately, many systems installed in this period did not perform very well. This was not a problem with the technology, but with the industry. Heat pumps are not as forgiving as gas furnaces; correct sizing and ductwork are critical to optimal performance. HVAC contractors did not fully understand the technology; many still don’t.

Another myth is that heat pumps only work in mild climates. This thinking stems from the fact that heat pump performance falls off as the ambient air temperature drops. An old rule of thumb was that heat pumps are great as long as the outside temperature is above 30 degrees Fahrenheit. In some cases this is true, but heat pumps have been used in extreme climates (like Alaska) for years. Today’s heat pumps easily perform well into the teens, and special low temperature units will work well to -15 degrees below zero and lower without electric resistance heat strips.

Today, heat pumps are being used in a wide variety of residential applications. They can be used to heat and cool the home in central heating systems. They are used to condition small spaces in the form of ductless mini-split heat pumps. A more recent application is the heating of domestic hot water. Heat pumps can even be used to heat swimming pools.

Since heat pumps are electric, they are a perfect fit for solar applications. By installing heat pumps, we can use the sun’s energy to heat and cool our home and make domestic hot water. This is a very effective carbon free model that does not rely on fossil fuels.

In fact, many experts believe the future for residential energy is site-produced electricity from photovoltaics (PV solar), combined with heat pump technology, and storage (batteries). This is a carbon free, long-term solution for residential energy. It has worked for NASA and the space program for years it should work for your home too. In short, there are lots of smart folks who support this technology and see it as a critical part of a sustainable clean energy future.

Political and Regulatory Roadblocks to Heat Pumps

The case for heat pump technology is strong, and we should be encouraging their use in a variety of applications. So what’s the catch? Answer: policy and politics. There are regulatory and political restrictions in California are limiting the adoption of this proven technology.

Restrictions against “fuel switching” (which usually involves moving from natural gas to electricity for heating) has been used to prevent widespread adoption of heat pumps. Politically, this is probably because gas-only utilities don’t want to give up customers to an electrical provider. In some cases policies even penalize those who embrace the technology.

Here are a Couple of Real World Examples:

  1. A contractor upgrades a small home that was heated with an 80 percent efficient natural gas wall furnace. The contractor air seals the home, adds insulation, installs a mini-split heat pump, and adds a small PV system. The homeowner is ecstatic: she has increased her comfort considerably, reduced her operational costs, and reduced her carbon footprint substantially. We should reward and encourage this type of upgrade as it is embracing the future, right? All is well until the contractor submits for the state-sponsored rebates he promised his customer. It seems he missed the detail about fuel switching, and as a result the rebates are much less than he anticipated. The client is disappointed, he is disillusioned and in the end the homeowner is being penalized for doing the right thing. This is a true story.
  2. Even worse is the story of some homeowners who are being excluded completely from participating in the state-sponsored rebate program because their project includes fuel switching to a heat pump, never mind all other related upgrades such as air sealing, insulation improvements, windows, etc. Local contractors challenged this, and the utility responded with a battery of documents from their attorneys citing how they interpret the program requirements. It seems if you switch fuels, (even to a more efficient solution) other improvements don’t count. Again, a true story.

In the first example above, the customer was in a territory where the utility provided gas and electricity, therefore they were not completely opposed to fuel switching. It was more of a paperwork concern for them than a financial one. In the second example, the utility only provides natural gas. This might explain why their attorneys interpret the rules differently and are actively discouraging moving to heat-pumps. It seems that keeping customers and revenue takes priority over saving energy.

All of this is antiquated thinking and nonsense. If we are to meet the state’s goals and move to a sustainable future, we cannot let outdated and cumbersome legislation and antiquated utility politics dictate business models. This issue is no secret to the California Public Utilities Commission or the California Energy Commission. Both of these regulatory agencies are aware of the problem and yet neither are willing to take a stand and find a solution. From a policy standpoint fuel switching has become somewhat of a taboo subject, the 800lb. gorilla, the elephant in the room, the scarlet letter, whatever metaphor you want to use. The utilities all have their own concerns; after all how could they promote something that might lead to them losing a client? This issue is not limited to California, but concerns communities across the nation.

When it comes to fuel switching, California lawmakers and utilities are delivering mixed messages. On one hand they are looking for ways to get more contractors involved in the industry with greater savings per job. Yet at the same time they are restricting business models and penalizing those who are charting a course to a sustainable clean energy future. The CPUC and CEC acknowledge that fuel switching is a problem. They are aware there will be winners and losers when the regulations change. There is no question the utilities don’t want to loose customers, especially on the natural gas side of the equation.

The real question is, when will the policymakers have the courage to take a stance for clean energy over the politics and profits? What is it going to take to bring this conversation off the back burner and into the spotlight? Who will stand up and address the fact that this is a real barrier to achieving our goals? There is no question this will be a challenging conversation as there is a lot at stake. But if the policymakers continue to allow the utilities to play by their own rules, in the name of shareholders, our industry will suffer and we will never meet our state’s ambitious energy saving goals.

We can only hope that collectively we can keep the pressure on and force policymakers to finally bring this issue to forefront of the conversation. We need to support switching from fossil fuels to site generated or sustainably produced electricity. Our policymakers need to embrace new solutions and look forward. This is not a time to play favorites and grant the utilities special favors. Sacramento needs to step aside and let the market decide how we create our clean energy future. Policymakers need to support growth by removing the barriers of outdated and politically motivated regulations.

This journey is hard enough as it is. We need support and action from our policymakers to pave the way. It will not be easy, and unfortunately there will be winners and losers. Let’s just hope that this time, the winners are the public and the planet.

Charles Cormany
Executive Director
Efficiency First California

Image from iStock.