Heat pumps have been around for decades as energy-efficient heating systems. But recently, electric heat-pump technology, which has improved and become cost-competitive in certain markets, has become increasingly recognized as the way forward to achieve decarbonization goals. Heat pumps can help provide a cleaner future and the reduction in emissions is a major driver for adoption around the world.
Electrifying space and water heating systems is one way to reduce building emissions—and electric heat-pump technology has emerged as an increasingly viable solution. By using the heat pump cycle, these units can deliver three to five times more heat energy than the electrical energy they consume.
What is a Heat Pump and How Does it Work?
Heat pumps are essentially two-way air conditioners. In the summertime, they work like any other air conditioning unit, removing heat from the air inside and pushing cooled air back into the home. In the cooler months, they do the opposite by drawing heat energy from the air outside and moving it into your home to warm things up. The process is especially efficient, using half as much energy on average than other electric home-heating sources.
The biggest difference between heat pumps and traditional heating and cooling systems is that they are designed to be ultra-energy efficient. This is because heat pumps only move heat, instead of generating it by combusting a fuel source. The system requires an outdoor and an indoor unit (unless using the less common geothermal system), which work together to suck up hot air and introduce it to an inside space or expel it outside.
During warm days, a heat pump moves the uncomfortably hot air out from the home and transfers it to the outside environment. And on cooler days, the heat pump transfers warmer air from outside and pulls it into the home to warm it up. They also provide homeowners with humidity control and air conditioning.
Heat pumps are suitable for areas with moderate cooling and heating needs. So, in the battle between a heat pump vs. an HVAC system featuring a furnace or a boiler, space conditioning costs less with a heat pump in temperate climates.
How Do Heat Pumps Reduce Emissions?
Heat pumps work by moving heat, not air. Most heating systems in the U.S. use forced-air furnaces that run on natural gas or electricity, or in some cases heating oil. To heat the building, the systems burn fuel or use electricity to heat up air, and then blow the warm air through ducts into individual rooms.
A heat pump works more like a refrigerator, which extracts energy from the air inside the fridge and dumps that energy into the room, leaving the inside cooler. To heat a building, a heat pump extracts energy from outdoor air or from the ground and converts it to heat for the house.
Keeping buildings warm produces one-tenth of global energy-related carbon dioxide (CO2) emissions. Reducing the use of fossil fuels to heat buildings therefore comes with a significant emissions reduction. Emissions would fall even though heat pumps often rely on fossil fuel combustion for power, including on coal-heavy grids. This is because heat pumps are between three and five times more efficient than fossil fuel boilers.
Benefits of Heat Pumps
Heat pumps are significantly more efficient than alternative heating methods because they do not convert energy into heat but rather use electricity to transfer heat. Even compared to other electric heating systems, heat pumps win out: they use half the electricity of electric furnaces and baseboard heaters. Compared to gas furnaces, heat pumps can use three to four times less energy, making it even more efficient to use natural gas-generated electricity to power a heat pump than to use natural gas directly in a gas furnace.
Heat energy exists even in cold air. During cold weather, these systems pump heat from outside your home to the inside to warm your interior. During the summer, the system removes warm air from your home and pushes it outside, while delivering cooler air inside. Refrigerant runs through coils connected between indoor and outdoor units. As air is pulled into the system it passes over the coils, cooling it down before delivering it to your interior.
- Lowers Energy Bills
- Reduces Carbon Emissions
- Safe (No Combustion)
- Minimal Maintenance
- Quiet Operation
What is Decarbonization?
In simple terms, decarbonization is nothing more than reducing the amount of greenhouse gases (GHG) released into the atmosphere that result from the burning of fossil fuels. There are two aspects to decarbonization. The first entails reducing the greenhouse gas emissions produced by the combustion of fossil fuels. This can be done by preventing emissions through the use of zero-carbon renewable energy sources such as wind, solar, hydropower, geothermal and biomass, which now make up one-third of global power capacity and electrifying as many sectors as possible. Energy efficiency will reduce the demand for energy, but increasing electrification will increase it, and in 2050, the demand for power is expected to be more than double what it is today.
How HVAC Contributes to Decarbonization Goals
Decarbonization and electrification are often associated because electrification is an important step on the path to decarbonization. But to be an effective decarbonization measure, electrification needs to be managed in conjunction with other strategies, including energy efficiency and the transition of the energy grid.
Essentially, building electrification is shifting HVAC equipment from using on-site fossil fuels toward efficient, electric heat pumps. By operating efficiently and taking advantage of increasingly low-carbon electricity, heat pumps can provide reliable space heating while drastically cutting carbon emissions and utility bills.
Using heat pumps to keep buildings warm, instead of traditional boilers and furnaces, could cut global CO2 emissions by 3 gigatons per year if implemented worldwide. Today’s models are 2.2 to 4.5 times more efficient than gas furnaces, and recent advances, such as multiple or variable-speed compressors, let heat pumps work in cold conditions that once caused problems.
Heat Pump Tax Credits and Rebates for Families
When homes need to replace their heating or cooling systems, families can get tax credits for efficient heat pumps that ensure comfortable home temperatures. By doing the job of both a furnace and air conditioner, heat pumps work to keep homes warm in the winter and cool in the summer.
Right now, households can receive a $300 tax credit for purchasing a heat pump. The total of current and previous year’s credits, including those for energy efficiency improvements, high efficiency furnace and air conditioners cannot exceed $500.
Starting next year, households will be able to claim a tax credit for 30% of the costs of buying and installing a heat pump, up to $2,000 including support for any electric system upgrades needed to make the home heat-pump-ready.
Beginning in 2023 state programs will offer low- and moderate-income households rebates for heat pumps at the point-of-sale, cutting costs of purchase and installation up to $8,000. If home electrical upgrades are needed to integrate new heat pumps, rebates of up to $4,000 will also be available to households.
Heat Pump Installation Tax Credits
You can also claim up to $1,200 in total tax credits per year on a wide range of expenditures related to certain efficiency upgrades, including for heat pumps. These include but are not limited to:
- $600 for air-sealing materials or systems, which can improve your home’s overall energy efficiency
- $150 for a home energy audit, which can point out ways you can improve your overall energy efficiency
- $600 for upgrading your electrical supply if it’s required for efficiency projects—for example, in order to power an electric heat pump when you previously used natural gas to heat your home
State-administered rebates on efficiency and electrification upgrades associated with installing your heat pump may also be available for low- and moderate-income households. Parameters of who qualifies and for how much would be decided by the state according to your household income measured against your state’s median household income. This includes:
- $1,600 for insulation, air sealing, and ventilation
- $4,000 for upgrades to your electrical panel and service
- $2,500 for electrical wiring
Who Qualifies for a Heat Pump Tax Credit or Rebate
Any taxpayer would qualify for the federal tax credits.
For the tax credit program, the new incentives will apply to equipment installed on January 1, 2023 or later. (A smaller tax credit of up to $300 for a heat pump meeting the CEE’s top tier of efficiency is available for heat pumps installed during 2022.)
As for the rebate programs, Urbanek says it would be “surprising” if they turn out to apply retroactively. The rebates depend on income. Specifically:
- If your household income is less than 80 percent of your state’s median household income, you are eligible for 100 percent of the rebates available. So, if you spend $10,000 on a heat pump and a heat pump water heater, you could get $9,750 back, depending on the specifics of your state’s rebate program.
- If your household income is 80 percent to 150 percent of your state’s median income, you are eligible for 50 percent of the rebates available. So, for a $10,000 heat pump and heat pump water heater, you could get $4,875 back, depending on specifics.
- If your household income is more than 150 percent of your state’s median income, you are not eligible for these rebates.
Give Us a Call
At Aire-Tech, we can help keep your home at the optimal temperature! We give you countless resources to help you explore and learn about HVAC options, including incentive programs. We work closely with agencies to pass on savings programs and information to our valued customers.
If your system needs repair or inspection, call Aire-Tech on 951-926-1002. You can also visit our Contact page and complete the contact form.