Dive Brief:
- Installing heat pumps in Texas homes that currently use central air conditioners and electric resistance heating systems would on average save them each more than $300 in utility bills annually, according to estimates in a white paper published this month by the American Council for an Energy-Efficient Economy.
- The study of more than 350 Texas homes also finds that switching these buildings to heat pumps from electric resistance heat would slash peak winter electricity demand, bolstering the state’s strained grid.
- The ACEEE researchers make the case that, given these benefits, Texas policymakers, regulators and utilities should encourage the installation of heat pumps in new construction and when replacing existing central AC and electric resistance heating systems.
Dive Insight:
Heat pump proponents have had a good couple of years. In 2022 and 2023, heat pumps outsold gas furnaces in the United States. Governors and states have pledged to rapidly increase heat pump installations and equipment shipments in their jurisdictions.
More research is backing up the benefits of heat pumps, too. The Department of Energy’s National Renewable Energy Laboratory published a paper earlier this year showing that air-source heat pumps would lower energy bills for a majority of U.S. households. However, those researchers noted that the high cost of installing the equipment remains a challenge.
The recent ACEEE report looks at a smaller slice of heat pumps’ potential: Texas households that are heated and cooled by central AC systems with electric resistance coils that distribute warm air via ducts and registers. Over a quarter of Texas households rely on these systems, ACEEE says.
The ACEEE researchers acknowledge the challenge posed by the upfront cost of heat pumps. In new homes, it costs an average of $391 more to install a heat pump over a central AC and electric resistance heating system. But accounting for energy bill savings, the heat pump pays for itself in a little over a year, the researchers say.
The financial picture changes for existing homes: Replacing the existing central AC with a heat pump costs $697 more on average than replacing it with the same type of equipment.
There’s more than individual homes’ energy bills at stake though, according to the ACEEE researchers. They argue that the state could cut winter peak energy demand by about 12 GW over 15 years if all Texas households relying on central AC and electric resistance heating switched to heat pumps. Avoiding that demand could save billions of dollars in constructing and operating the power plants that would otherwise be needed to meet the demand, the researchers say. Deadly blackouts during winter storms in 2021 illustrated Texas’ need to reduce winter peak energy demand, they add.
Some utilities, states and cities are already implementing policies and programs that align with the researchers’ findings. Georgia, Florida and the city of Austin, Texas, for example, have building codes that bar inefficient resistance heating in new homes and buildings. CenterPoint Energy, the utility serving the Houston area, has a heat pump installation program that prioritizes low-income households, which ACEEE says it should expand.
The researchers specifically recommend that as Texas sets up its Inflation Reduction Act-funded home energy rebate program, it should focus on deploying heat pumps in homes with electric resistance heating.
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