3. Heat Pump Survey Response and Strategy — original pdf

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Heat Pump Survey and Roadmap Zach Baumer Chief Sustainability Officer Sara Norris Director, Energy Efficiency Services November 2024 © Austin Energy Agenda Office of Sustainability • Heat Pump Technology Overview • HVAC Contractor Survey Summary and Recommendations Austin Energy • Heat Pump Roadmap • Current Austin Energy Incentives (ADD Federal and upcoming State) 2 Austin Climate Equity Plan Austin Climate Equity Plan: Commissioned in 2020 and adopted in 2021, the plan identifies 17 goals and 75 strategies to equitably achieve net-zero greenhouse gas emissions by 2040. Included in the plan were calls for energy- efficient buildings and support for evaluating and improving access to high- efficiency heating and cooling options like heat pumps and heat pump water heaters. 3 Austin’s Community Carbon Footprint Waste 3% Industrial 10% Electricity 35% Transportation 38% 2021: Total 11 Million Metric Tons (MT) of CO2 Equivalent (CO2e) Refrigerants 5% Natural Gas 9% ~9% from on-site use of natural gas; ~1 Million MT CO2e/year • ~ 50% from single-family homes • ~ 50% of single-family usage from gas furnaces ~ 2.25% from natural gas furnaces at single-family homes; ~250,000 Metric Tons of CO2e per year 4 Heat Pump Overview • HVAC systems that efficiently move hot air from inside your home to the outside to cool down the interior. • • In the winter, it runs in reverse to heat your home by transferring heat through compression and expansion of refrigerant These are a single-system alternative to air conditioners installed with gas furnaces or electrical resistance heating • Most common: 1) ductless mini-split and 2) ducted system with exterior condenser and interior air-handler • Most efficient is a variable-speed, inverter-based heat pump Ductless mini-split: exterior and interior units Ducted System: 3 ton 15 SEER2 exterior condenser and interior air handler Photo sources: Shutterstock, HVAC Direct, and https://www.energy.gov/energysaver/heat-pump-systems 5 Residential Heat Pump Benefits • Simplicity - Only 1 system, not 2 (AC and gas furnace) • Consistent all-season heating and cooling • Potential improved indoor air quality • Potential lower bills if switching from resistance heating • Renewable energy to run a heat pump less carbon intensive than burning natural gas onsite 6 Residential Heat Pump Challenges Building and Fuel Type • Approx. 70% of single-family and 35% of Customers and Contractors • Heat pump equipment and installation costs multifamily households rely on gas for heating* vary • Heat pump compatibility and cost savings vary across building and HVAC type • Installation costs increase if changes to ducting, mechanical space, heat load, etc are needed • Customer perception of bill impacts, efficiency, and value impacted when replacing broken HVAC • Colder winter may result in higher electricity usage and bills compared to gas furnace • Electrical panel upgrades may be required • Local HVAC contractors and maintenance industry could benefit from additional training, experience, and decision tools * From Austin Energy analysis of Energy Audit and Disclosure Ordinance (ECAD) data 7 New Building Scenario Source: Rocky Mt. Institute Analysis 8 Existing Building Retrofits Gas Furnace + AC >> Heat Pump Elec. Resistance + AC >> Heat Pump Equipment Costs Comparable for similar efficiency units (<$5k difference) Comparable for similar efficiency units (<$5k difference) Installation Costs Bill Impact Higher: Elec. panel upgrade ($2k), or other modifications (e.g. larger concrete pad for condenser or new conduit) Summer: Potential Moderate Bill Savings Winter: potential savings during mild winters (<$100/household); higher bills in cold winters Similar (assuming no other upgrades required for code compliance) Summer: Potential Moderate Bill Savings Winter: High Bill Savings Emissions Impact Reduced Overall Assessment Emissions reduction but customer payback impacted by winter temperatures No change locally, some impacts at utility scale Ideal target for heat pump conversion, particularly at multifamily properties that do not require building or HVAC modifications Data based on Austin Energy project data and high-level estimates 9 Heat Pump Study Overview FY2023-2024, the City of Austin’s Office of Sustainability contracted with Terra Lumina Consulting to engage with residential HVAC contractors and develop a report to: • Identify barriers to prioritizing energy efficient technologies like high-efficiency heat pumps and heat pump water heaters in building retrofits and • Provide recommendations for steps the City can take to address those barriers • Consider research of national trends and best practices 10 Heat Pump Study Key Results • > 75% of survey respondents indicated that at least 15% of new and replacement HVAC system installations are heat pumps • 88% of contractors report that customers are satisfied with heat pumps • Contractors confirmed that cost is the biggest barrier to residential heat pump adoption • 75% of survey respondents reported that Austin Energy’s rebates make them more likely to encourage customers to choose heat pumps 11 Challenges + Recommendations Challenge Recommendations Higher Upfront Costs Longer sales cycle Cold temperature performance Increase and modify incentives 1. 2. Provide unbiased cost-benefit information 3. Stimulate bulk purchasing discounts 4. Require 200-amp panel sizing for new construction and major renovations 5. Provide education / marketing support to drive heat pump sales 6. Panel sizing requirement 7. Require inverter-based models with variable speed motors to maximize efficient operations in all Austin climate 8. Provide un-biased local cold temperature performance data Limited contractor experience with electrical upgrades 9. Provide publicly available tools and guidance on electrical upgrades 10. Offer networking and electrical skill building opportunities Contractor resistance to adoption 13. Increase positive messaging 14. Phase out cooling-only systems where HP options are available 12 Challenges + Recommendations Multifamily Properties Challenge Recommendations High Maintenance Costs 1. Offer fundraising support for affordable housing providers. Incentive design components and labor 2. Redesign multifamily incentives to rebate individual HP system 3. Offer rebate project management support for multifamily customers Lack of maintenance staff training 4. Provide free onsite training for affordable housing maintenance staff 13 Austin Energy Heat Pump Strategy: Past, Present, Future Sara Norris Director, Energy Efficiency Services 14 Austin Energy Heat Pump Incentives Residential Multifamily • Equipment: $400-$750/system • Equipment: $300-$400/ton • Whole Home Retrofit: $800- • Tune-Up: $312-360/system $1200/system Tune-Up: $175/system • • Federal Incentive: $2k/household Commercial • Equipment: $30-$290/ton • Small Businesses Receive Additional 30% Bonus • Tune-Up: $180-$680/system • Host HVAC and building performance contractor trainings • Contractor reimbursement for equipment and field staff training • New Construction Pilot Incentives • Annual evaluation and analysis of program design and incentive rates 15 Heat Pump Analysis and Planning • Cost Effectiveness: develop customer friendly calculators and decision tools that consider existing building/fuel type and cold weather performance Increased Electric Load: quantify impact on customer bills and local electric system • Austin Energy Goal Alignment: potential GHG metric and shift from MW savings Equity KPI’s: ensure balanced program design, outreach, and incentives • • only 16 Heat Pump Preliminary Roadmap FY25-FY27 Customer Outreach Contractor Engagement Program Design and Incentives • Cost benefit tool, support data gathering • Provide Heat Pump training and and decision guides resources • Develop a Heat Pump savings calculator to support customer decision making • • Education to support proactive decision making – avoid emergency HVAC failure Increase networking opportunities and collaboration with installers, distributors, and manufacturers • Support partnerships between HVAC and electrical trades • Align incentives with goals (MW or GHG) using 3rd party evaluation consultant. • Shift focus to more holistic GHG metrics to better capture fuel transition • Evaluate support for customer electric upgrades (incentive, technical, etc.) 17 Questions? 18