September 7, 2022
Energy Resources and Conservation
The past two summers have brought record-breaking heat waves to the Pacific Northwest (e.g., the infamous June 2021 heat dome). As the effects of climate change increasingly affect Washington, communities across the state will face extreme heat events with increased frequency and intensity.
Only 53% of homes in Washington have air conditioning, leaving many residents — especially low-income community members and members of the Black, Indigenous, and Colored (BIPOC) community who are less likely to have access to air conditioning – vulnerable to heat-related illnesses and death. Local governments use a variety of tools to prepare their communities for climate change and extreme weather. One method is to encourage heat pump installations as a means of cooling and heating homes.
This blog will provide an overview of heat pumps, examples of local government incentives in Washington State, and emerging state and federal programs.
What are heat pumps?
Heat pumps use electricity to transfer heat to heat or cool a home. During the heating season, heat pumps transfer heat from the outdoors to the house, and during the cooling season, transfer heat from the house to the outdoors. The most common heat pumps in the country are ducted air-source heat pumps (for homes with existing HVAC ducts) and ductless air-source heat pumps (for homes without existing HVAC ducts).
By transferring heat rather than generating heat or cooling hot air, heat pumps are very energy efficient. These efficiency gains translate into energy savings, reduced greenhouse gas (GHG) emissions, and increased adaptation and resilience of communities facing extreme heat.
Given these benefits, why aren’t heat pumps gaining rapid adoption in Washington? In short: the financial burden. Installing a heat pump system can cost up to $10,000 or more depending on the type of heat pump, the efficiency rate of the heat pump, labor costs and installation costs. other factors. High costs make heat pumps inaccessible for low-income households and prohibitively expensive for most low-income households. This is where incentive programs can have a significant impact.
How local governments are promoting heat pumps
Local governments use rebates, loans, and other approaches to incentivize homeowners to install heat pumps. Let’s take a look at how each is designed and offered.
The most common incentive for heat pump installations is a rebate. Rebates are most often distributed to licensed and qualified installers who then pass the savings on to utility customers in their installation bid. Some utility districts (PUDs), such as Benton PUD and Clark County PUD #1 (commonly known as Clark Public Utilities), offer rebates ranging from $100 to $2,000 depending on the type of pump. heat (ducted or unducted), heat pump efficiency rating, and current home heating method. Some city-owned electric utilities, including Centralia City Light, Ellensburg Electric Utility, and Seattle City Light, offer rebates between $300 and $1,600.
Another approach is to reduce the financial burden on residents through loans. Loans for heat pumps are subject to various requirements, including the use of licensed qualified contractors and that the existing heat source of the house be electricity, among others.
Tacoma Power offers different loaner options for ducted and non-ducted heat pumps. For ducted heat pumps, Tacoma Power offers seven-year, 0% interest loans of up to $10,000. For ductless heat pumps, there are two loan options: the first is a seven-year, 0% interest loan of up to $4,000 and the second loan option, which is designed for income-qualifying customers, offers a loan of $3,500 plus a discount of $500. . The owner must repay the loan if, at a later date, the house is sold to a new owner.
Clark Public Utilities also offers loans for ducted and ductless heat pumps. Loans for both types of heat pumps have an interest rate of 4.99% and repayment terms of five years for projects costing less than $10,000 and seven years for projects over $10,000. $000. Applicable incentives, such as discounts, are deducted from the total loan amount.
Partnerships and group purchases
An innovative approach currently being tested is the Energy Smart Eastside collaborative heat pump program. The program brings together the cities of Bellevue, Issaquah, Kirkland, Mercer Island and Redmond, along with a variety of partners to pool incentive resources and strengthen outreach efforts.
The program uses a group purchase model in which interested eligible residents can purchase heat pumps as part of a bulk order and, in turn, qualify for a discounted rate. The program offers at least $500 off for installation, and the incentive can be stacked with city and utility incentives (in this case, Puget Sound Energy). Residents with qualifying income are entitled to additional benefits. For example, Bellevue residents with qualifying income are eligible for a combination of incentives and financing options that can result in no-cost installations.
State and federal incentives
The Washington State Department of Commerce offers Clean Energy Fund Building Electrification Grants for projects that will support the installation of electrical equipment (e.g. heat pumps) and fuel switching (e.g. example, switching a building’s heat source from gas to electricity). Local governments can apply to receive grants for their own buildings and as program administrators. Application materials will be available in fall 2022.
Passed through the United States. Congress in August 2022, the Cut Inflation Act earmarks funds for a high-efficiency residential electrification rebate program that includes heat pump rebates of up to $8,000 for households in low income (distributed by state energy offices and tribal governments). Households that do not have eligible income will be entitled to a tax credit of up to $2,000 for the installation of a heat pump. The rebates will be available in 2023 and the tax credits will apply to equipment installed on January 1, 2023 or later.
Conclusion and Resources
As extreme heat becomes the norm in the summer, increasing access to affordable, efficient, and reliable cooling for all Washington residents, especially low-income members and members of the BIPOC community, is critical. By encouraging heat pump installations in conjunction with state and federal resources, local governments can help their communities build resilience and adapt to climate change equitably.
Below are additional MRSC resources:
MRSC is a private, nonprofit organization serving local governments in Washington State. Eligible Washington State government agencies can use our free, one-on-one Ask MRSC service to get answers to legal, policy, or financial questions.