A new program is successfully helping New York homeowners escape the shackles of fossil fuels.So why shrink?
If you want to see one of the world’s most effective weapons against climate change, you can visit North Chestnut Street in New Paltz, where Rycor HVAC has a warehouse full of these weapons.
Rycor founder and owner Scott Arnold is a big believer in heat pumps.”This is definitely the next step,” he said.”Who wants to keep burning fuel, with gas tanks and carbon dioxide at home, and fires, fire damage, inhaling soot, and paying more for it? Who wants to do it forever? So that’s going to be the next thing.”
Heat pumps have been Rycor’s sole business since 2006, and the company is currently focused on a single device: the Mitsubishi ductless mini-split.Arnold said his company currently powers six to eight homes a day in the Hudson Valley, many with the help of a joint program between the utility and the New York State Energy Research and Development Authority (NYSERDA). Yes, the program partially subsidizes electricity costs.Install.
But while New York’s push for clean heating is intensifying, consumer subsidies for heat pumps of the kind Rycor specializes in are falling sharply on the territory of New York’s three electric utilities: Con Edison, Orange & Rockland and Central Hudson.Subsidies on the other three — NYSEG, Rochester Gas & Electric and National Grid — are currently unchanged.To add to the confusion, each utility offers its own subsidy rate, and subsidies are changing for some forms of heat pump technology, while other forms of heat pump technology (such as requiring excavation are more expensive to install) ground source heat pumps) remain unchanged.
In the Mid-Hudson region, the subsidy for installing an air source heat pump system is set at $1,300 per hour per 10,000 BTU installed.As of March 1, it’s down to $500 — although the subsidy only drops to $1,000 if you get rid of fossil fuel backup heating entirely as part of a project.Heat pumps are fairly simple to install for trained installers and typical single-family home installations, but the cold-weather “mini-split” air-source heat pumps used by Rycor can cost several thousand dollars each, just for the unit itself , and requires multiple appliances to heat the entire house.
“They did it at the worst possible time,” Arnold said.”It’s counterintuitive. They’re destroying a lot of good things that a lot of people are doing. I don’t understand why this is happening.”
New York’s Clean Heating program launched in 2020 after the state’s comprehensive climate law passed the 2019 Climate Leadership and Community Protection Act.The program, which has a total budget of $454 million, is scheduled to run through 2025, or until funding is exhausted, according to a NYSERDA spokesperson.
In the Hudson Valley, the program was a victim of its own success.The Clean Heating Program was originally created by an agreement between the utility company and the state Public Service Commission for a fixed amount of funding to accelerate the adoption of clean heating and cooling technologies.Consumers are adopting heat pumps faster than expected among the three utilities that are now lowering subsidies, and they are trying to expand their cash reserves so they don’t run out before the program’s 2025 sunset date.
The March change was Central Hudson’s second reduction in air source heat pump subsidies, following a small reduction in 2021.Central Hudson manager Cory Scofield said the scheme was “running very hot” throughout 2020 and early 2021.”We’re trying to encourage as many of these heat pumps as possible, but we’re working on a fixed budget,” he said.”We realized it could be an uncomfortable exercise.”
The change in subsidies has shocked contractors and homeowners alike.Some homeowners working on heat pump projects are not aware of the higher subsidy in time to take advantage of it.Many more people still don’t know it exists, or even that heat pumps actually exist.
Manna Jo Greene, a Ulster County legislator and longtime environmental advocate for the Hudson Valley, is disappointed to have missed out on a more generous subsidy for installing an air source heat pump system.Green’s furnace died in November; thanks to an ultra-insulated house, she only needed a few space heaters to get through the winter, but she’s now looking to install a more permanent solution.
“I may have missed this opportunity,” she said.”I think it’s too bad because we need to do as much as possible on climate change.”
According to the actual principle of refrigeration, a heat pump does not generate heat, it simply moves heat from one place to another by shuttling it along a closed circuit filled with refrigerant fluid.This allows it to keep energy input low; while high-efficiency gas heaters can top out at around 95% efficiency, a good heat pump can achieve an eye-popping 300%+ efficiency, absorbing heat from the air or the ground in the form of heat. The energy is more than the electricity it consumes.In summer, the same system works in reverse as an air conditioner.
Modern cold-weather heat pumps can draw heat from the air even at 15 degrees Fahrenheit, a temperature at which there is still a lot of thermal energy in the air, even though the body may not feel it.It sounds impossible, but it’s just physics.
“Cold doesn’t exist. The tooth fairy doesn’t exist. You can’t heat your house with a tooth fairy,” Arnold said with a smile.
Heat pump technology, pioneered by Austrian inventor Peter von Rittinger in the 1850s, has its roots in the scarcity of energy.Rittinger uses it to collect salt from seawater, and the process relies on deforestation to burn them for heat.A century later, the British engineer John Sumner, an ardent heat pump evangelist, built a ground source heat pump to heat his house, but failed to capture the public imagination: “At the time, rich Coal appears to be a cheap and limitless source of energy,” thermal geologist David Banks wrote in a 2008 textbook.
In an era when the cost of “cheap” fossil fuel energy is considered — not to mention the skyrocketing cost of fossil fuels themselves — heat pumps can save us.According to NYSERDA, one-third of New York State’s greenhouse gas emissions currently come from heating and cooling buildings.As New York moves toward a grid that runs entirely on zero-carbon electricity by 2040, replacing fossil-fuel-burning furnaces with heat pumps not only reduces energy consumption to heat homes, but also changes the underlying source of energy.From high-emissions fossil fuels to low-emission solar, wind, hydro and nuclear.
The draft scoping plan, released Jan. 1 by the state’s Climate Action Council and scheduled to be finalized later this year, relies heavily on widespread adoption of heat pumps to decarbonize buildings.The plan calls for the electrification of heat pumps for 1 to 2 million homes by 2030, with subsidies for low- and moderate-income households to help reduce installation costs.By the late 2020s, to meet state climate goals, the plan states that most new heating systems sold in New York State will require heat pumps.
Although the Clean Heating Program is statewide and created with the help of NYSERDA under the authority of the New York State Public Service Commission, it is not funded from the state budget.For each utility, the subsidy costs are shared among all of the utility’s customers, a mechanism that is also used in other NYSERDA energy efficiency programs.Because of the program’s current structure, any increase in subsidy funding must be approved by the Public Service Commission, which looks after the interests of utility taxpayers, and is factored into future electricity bills.
“These incentives are paid for by our customers,” said Hudson Center spokesman John Maserjian.”They are included in the cost of doing business, so we have to use those funds carefully.”
Electricity bills in New York have soared due to fluctuations in global fossil fuel prices, especially among Upstate utilities, which rely more on natural gas to generate electricity than their upstate counterparts.Central Hudson recently announced that the utility expected its electricity prices to soar 46%, before the Russian invasion of Ukraine and subsequent international sanctions threw global energy prices into uncertainty.
Relying on ordinary households to cover the costs of a clean energy transition could complicate a chaotic climate spending battle without complicating state budget battles, but it is a seriously retrograde way to fund climate action in the long run.Households that adopt technology early and have the ability to tackle large heating system projects all at once tend to be on the higher end of the income scale, while the cost of the subsidy program is spread across all taxpayers, with lower harm – more for income households.
All of this raises the question of whether it makes more sense to fund programs like Clean Heat through state taxes — which are clearly making progress toward New York State’s climate goals and could ease the pain of families through structured taxes.Least burdened by high energy bills?
That’s a tough question, a Matherjian diplomat answered.”Honestly, I had no idea that conversation was taking place,” he said.”I know the utilities are starting to back off a bit and say, ‘Look, it can’t be all on the utility bill.’”
State analysts estimate the total cost of a clean energy transition in New York to be between $1 billion and $15 billion a year, regardless of who ultimately pays: private companies, ordinary households, the federal government, state taxpayers, or all of the above.So far, Gov. Kathy Hochul and state lawmakers have shown little inclination to include that level of climate spending in state budgets, despite growing pressure from climate advocates to direct public funds to state climate goals.
“The money we’re talking about isn’t a lot of money. What’s been put into these types of things, these green energy things, that’s a drop in the bucket,” Arnold said.”I can’t believe it’s not getting the attention of the right people, going to the right office and saying, ‘Oh, we can re-fund this program.’”
This story has been updated to include more details on the Hudson Center subsidy change: Projects involving decommissioning fossil fuel heating systems lose less subsidy than projects that retain backup systems.
Lissa Harris is a staff writer for The River and a volunteer firefighter.She was the founding editor of The Watershed Post, a site that covered local news in the rural Catskills from 2010 to 2017.
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