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| Fig. 1: Heat pump operating cycle. (Source: Wikimedia Commons) |
As countries around the world work to achieve ambitious decarbonization goals, one significant target of residential emissions has become heating and cooling, traditionally powered with fossil fuels. [1] An alternative to this is the heat pump, which can use temperature disparities in the air or ground to more efficiently control temperatures. Due to heat pump subsidization in a variety of US states, new heat pump purchases outpaced gas furnaces for the first time in 2022, and The Washington Post reports that electric heat pumps are now used for space heating in 16% of US homes. [2] This number appears consistent with data from the US Energy Information Administration (EIA), which found that 13.9% of US homes used heat pumps or ductless heat pumps for space heating in 2020. [3] With the passage of the US Inflation Reduction Act in 2022, heat pumps are newly eligible for federal tax credits or, in some cases, for federal rebates. [4] This could have important implications for the cost-effectiveness of heat pumps. However, it is first important to understand the different forms of heat pumps and potential environmental and health impacts associated with their use.
Heat pumps generally fall into the categories of air-source heat pumps (ASHPs) and ground-source heat pumps (GSHPs). [4] ASHPs rely on disparities in outside air temperatures, whereas GSHPs take advantage of the greater differences in underground temperatures. Although GSHPs operate more efficiently, manufacturing and installation of GSHPs can be more environmentally and financially burdensome. [5] As per Fig. 1, commercially available heat pumps use a refrigerant which absorbs heat as it evaporates or releases heat as it condenses, meaning it can act as both a heater and cooler. The same form of technology can be used for water heaters. In addition, heat pumps can have either a fixed-capacity compressor which switches on and off, or a more efficient inverter-driven compressor which adjusts its speed according to demand. [5]
The general advantage of heat pumps is that they can operate more efficiently than traditional heating/cooling systems. Heat pump efficiency is often expressed in terms of the coefficient of performance (COP = Heating Capacity [W] / Electrical Input [W]), though another important metric is the Energy Efficiency Ratio (EER = Cooling Capacity [W] / Electrical Input [W]). [5] Efficiency is highly dependent on temperature, and heat pumps tend to operate at lower efficiencies in colder climates. [1] At normal heating/cooling temperatures, air-source heat pumps may be more efficient at heating, however one study found that in Germany, ground-source heat pumps are far more efficient at cooling. [5,6] On average, heat pumps tend to operate with COPs in the range of 1.8-2.5, though COPs could increase to 5 or higher depending on the technology. [5,7] By way of comparison, furnace energy efficiencies are often required to be in the range of 78-90%, with Addo- Binney et al. (2021) stating that 100% efficiency is equivalent to a COP of 1. [8] These figures are not provided in a perfectly comparable way but provide a sense of the efficiency improvements of heat pumps in terms of energy usage.
The overall environmental impact of heat pumps is heavily contingent on the electricity mix and existing infrastructure in a given area. Heat pumps may also have the effect of decreasing CO2 emissions on net while simultaneously increasing local co-pollution of SO2, NOx , and PM2.5. This is because residential furnaces and boilers tend to produce relatively less criteria air pollutants than fossil fuel power plants. [1] One study finds that 70% of the non-heat-pump US housing stock would experience net positive climate and health benefits from the adoption of heat pumps. [1] Another finds that heat pumps would provide net positive environmental benefits in only 40 of 883 study locations in the US, all of which are in California or Arizona. [9] Differences may be due to assumptions about future renewable uptake, costs, and type of heat pump. It is also important to note that these studies were published in 2021 and 2020, respectively, with uptake of heat pumps, renewable energy, and supportive policies having increased in the subsequent years. In terms of the electricity mix available for operation, heat pumps are likely to become more environmentally attractive over time. However, heat pump adoption could also drive up peak residential energy demand, particularly in colder climates, putting additional strains on the supply. [1] This could be especially significant in areas dependent on intermittent renewable energy.
Another consideration is the potential leakage of refrigerants and lifecycle factors associated with heat pumps. For instance, Marinelli et al. estimate that a heat pump's environmental impacts come 50% from use, 36% from production, 9% from construction, and 5% from end-of-life. [10] There is also expected to be some leakage of volatile refrigerants associated with the general use of heat pumps, estimated by some studies around 2% annually. [10] While it is challenging to assess the precise environmental impacts of heat pump usage in each household, new US policies have important implications for the cost analysis.
At baseline, heat pumps are a more expensive alternative to conventional systems. The cost varies greatly depending on the size and type of heat pump, but on average in the US, the cost and installation is estimated at $16,000. [11] This cost can go up to $40,000, compared to $4,000-$7,000 for a furnace. [12] Most existing homes will require some kind of retrofitting to utilize heat pumps, and the initial cost is estimated at around 50% of the total life cycle cost. [10] Deetjen et al. estimate that 21% of the US single-family residential stock could benefit economically from installing a heat pump. [1] Vaishnav and Fatimah find that in houses heated by natural gas, heat pumps would reduce costs in the Pacific Northwest and in the South. [9] However, both the policy support and the cost of electricity have since increased.
In 2020, US residential consumers paid an average of 13.15 cents per kilowatt hour of electricity, which increased to 15.04 cents by 2022. [13] US consumers will have to consider whether these operating costs along with the initial investments outcompete the local price of natural gas. Historically, this has not been the case in places like the Midwest. [9] One study compares the cost of operating a natural gas furnace versus a heat pump in Ontario, finding an annual cost saving of $312 given the 2020 prices of electricity and gas, but this will be highly location dependent. [12] The lifespan of heat pumps is estimated to be between 15 and 35 years, with more studies using a lower estimate and air-source heat pumps tending to have a shorter lifespan. [10] Gas furnaces are given a similar lifespan of 15 to 20 years. [12]
Although a number of states have already subsidized heat pumps with Massachusetts offering up to a $15,000 rebate the Inflation Reduction Act (IRA) of 2022 was the first to provide broad federal incentives. [12] Specifically, the IRA establishes a 30% tax credit for heat pumps or heat pump water heaters, capped at $2,000 for air-source heat pumps and uncapped for ground-source heat pumps. [4] Low- or moderate- income households may be eligible for rebates of up to $1,750 for heat pump water heaters or $8,000 for heat pumps, although these programs have been slow to roll out. [4,11] Given the average heat pump cost of $16,000, this could cushion upfront investments but likely will not bring them to parity with conventional furnaces. For an air-source heat pump costing $16,000, a 30% tax credit would equate to $4,800 and would thus exceed the cap, meaning the credit would be $2,000 for an effective rate of 12.5%. Thus, individual consumers will still need to consider whether the more efficient operating costs make up for the price differential in their area.
Ultimately, heat pumps seem to be both environmentally and economically-conscious choices in some but not all US households. Given the anticipated shift towards and subsidization of renewable energy sources, heat pumps may become the greener, healthier option in a growing proportion of the country. Economically, however, variability in the costs of fuels and electricity due to geopolitical or other events makes it difficult to make general conclusions about heat pump viability. The IRA and other policies make heat pumps a cost-competitive choice for a greater number of US households, though the decision remains context-specific.
© Julia Ilhardt. The author grants permission to copy, distribute and display this work in unaltered form, with attribution to the author, for noncommercial purposes only. All other rights, including commercial rights, are reserved to the author.
[1] T. A. Deetjen, L. Walsh, and P. Vaishnav, "US Residential Heat Pumps: The Private Economic Potential and Its Emissions, Health, and Grid Impacts," Environ. Res. Lett., 16, 084024 (2021).
[2] M. J. Coren and N. Kommenda, "How Soon Do You Have to Buy Heat Pumps and EVs to Avoid Climate Catastrophe?," The Washington Post, 14 Nov 23.
[3] "Space Heating in U.S. Homes, By Housing Unit Type, 2020," U.S. Energy Information Administration, March 2023.
[4] "Inflation Reduction Act of 2022," Pub. L. 117-169, August 16, 2022, 136 Stat. 181 (2022).
[5] G. Mouzeviris and K. Papakostas, "Comparative Analysis of Air-to-Water and Ground Source Heat Pumps Performances," Int. J. Sustain. Energy, 40, 69 (2020).
[6] J. Luo et al., "Heating and Cooling Performance Analysis of a Ground Source Heat Pump System in Southern Germany," Geothermics 53,57 (2015).
[7] H. Willem, Y. Lin, and A. Lekov, "Review of Energy Efficiency and System Performance of Residential Heat Pump Water Heaters," Energy Build. 143, 191 (2017).
[8] B. Addo-Binney et al., "A Comparative Life Cycle Assessment of a Cascade Heat Pump and a Natural Gas Furnace For Residential Heating Purposes," Integr. Environ. Assess. Manag. 18, 572 (2022).
[9] P. Vaishnav and A. M. Fatimah, "The Environmental Consequences of Electrifying Space Heating," Environ. Sci. Technol. 54, 1914 (2020).
[10] S. Marinelli et al., "Life Cycle Thinking (LCT) Applied to Residential Heat Pump Systems: A Critical Review," Energy Build. 185, 210 (2019).
[11] S. Nerkar and M. Ngo, "Heat Pump Installations Slow, Impeding Biden's Climate Goals," New York Times, 9 Nov 23.
[12] A. Carrns, "How to Save on High Heating Bills This Winter," New York Times, 11 Nov 22.
[13] "Electric Power Annual 2022," U.S. Energy Information Administration, October 2023.
