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Inside Innovation: Watching and learning from electric heat pump incentives in the U.K. and California

John Bleasby
Inside Innovation: Watching and learning from electric heat pump incentives in the U.K. and California

At first glance, California and the United Kingdom wouldn’t appear to have much in common. However, both are undertaking ambitious initiatives towards a net-zero future by committing to reduced operational carbon and GHGs in buildings.

California took a big step recently by adopting changes to state building energy efficiency standards. These include the encouraged use of electric heat pumps in new or renovated buildings, both residential and non-residential, beginning Jan. 1, 2023. Although not specifically mandated, a builder not installing an electric heat pump instead of a gas device for space and water heating must undertake alternate and costly energy efficiency improvements.

The British government is moving in the same direction. There, efforts are directed at residential energy retrofits using financial incentives with the aim of installing 600,000 electric heat pumps over the next six years. Homes in the U.K. are reportedly among the least energy efficient anywhere in Europe.

However, there is a premium to installing electric heat pumps in the U.K. Gas boilers, popular in that country, typically cost about £1,000-£2,000. Air sourced heat pumps cost as much as 14 times that and geothermal heat pumps 15 to 35 times. As a result, the British government is proposing individual grants as high as £7,000 each. 

Some feel that may not be enough. An open letter signed by a group of U.K. energy experts and environmental groups is asking the government to provide heat pumps free of charge to poorer home owners and to take steps to ensure the operating costs of an electric heat pump will always be less than that of a gas device.

Cost premiums may not be as high in the United States. Air sourced heat pumps are estimated to cost about the same as gas furnaces, although geothermal heat pumps are several times more. Operational costs for both are said to be lower than those of a gas furnace.

Market factors aside, California and the United Kingdom are both demonstrating a strong resolve to de-carbonize the operations of buildings within their jurisdictions. Several municipalities in California already have new policies to prevent or discourage the installation of natural gas in new building projects. It is thought that the state may next ban all gas installations in buildings, or mandate all-electric appliances. Other states, like New York, are hopping onboard with their own carbon reduction initiatives that might even surpass those in California.

Returning to heat pumps in particular, any rapid and widespread installation of electric heat pumps requires a workforce infrastructure that may be currently lagging in trained installers.

In the United Kingdom, resistance to outright grants has come from the Federation of Master Builders, the trade association representing the country’s small to medium-sized builders. Chief Executive Brian Berry says heat pumps are too noisy, do not produce sufficient heat and are too large to be installed in many existing homes.

Berry’s organization supports a broader, 20-year energy retrofit program that would provide a huge industry stimulus, further suggesting the heat pump initiative could “undermine the whole retrofit approach.”

Using language similar to that associated with Canada’s homebuilding industry, Berry expresses concerns about the speed with which the government’s heat pump program is being rolled out and the lack of qualified installers. He sees an advantage to slowing things down.

“One person’s delay is another person’s chance to get it right. We don’t want false starts and missteps.”

Canada faces climatic conditions different than both California and the U.K., and which varies widely coast-to-coast. Heat pumps can both heat and cool a building; however, geothermal heat pumps are recognized as being more effective than air-sourced versions in regions with cold winter temperatures. That means a significant increase in cost for many building operators and may give pause to any concerted Canadian effort to switch over from gas.

There is, however, the option for Canada to consider electric furnaces, an effective GHG-reduction strategy if the power is clean-sourced.

John Bleasby is a Coldwater, Ont.-based freelance writer. Send comments and Inside Innovation column ideas to editor@dailycommercialnews.com.

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