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September 7, 2022 Posted by Lou FinazzoCategories: Climate Change, Energy & Conservation, Guest Author
The past two summers have brought record heatwaves to the Pacific Northwest (like the infamous heat dome in June 2021). As climate change impacts Washington more and more, communities across the state will experience more frequent and intense heat extremes.
Only 53 percent of households in Washington have air conditioning, leaving many residents, especially low-income and members of Black, Indigenous and Colored (BIPOC) communities who use less air conditioning, susceptible to heat-related illness and dying. . Local governments use a variety of tools to prepare their communities for climate change and extreme weather. One way is to encourage the installation of heat pumps 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 new state and federal programs.
Heat pumps use electricity to transfer heat to heat or cool a home. During the heating season, heat pumps transfer heat from the outside into the house, and during the cooling season, from the house to the outside. 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).
Heat pumps are very energy efficient by transferring heat rather than producing heat or cooling hot air. This efficiency gain can reduce energy costs, reduce greenhouse gas (GHG) emissions, and increase the resilience and resilience of communities facing extreme heat.
Given these benefits, why didn’t Washington embrace heat pumps quickly? In short: financial burden. Depending on the type of heat pump, heat pump efficiency rating, labor costs, and other factors, installing a heat pump system can cost up to $10,000 or more. The high cost makes heat pumps unaffordable for low-income households, and for most middle-income households, heat pumps are prohibitively expensive. This is where incentive programs can make a big difference.
Local governments use rebates, loans, and other methods to incentivize homeowners to install heat pumps. Let’s take a look at how each is designed and delivered.
The most common incentives for installing heat pumps are discounts. Discounts are usually given to approved qualified installers, who then pass the savings on to utility customers’ installation costs. Some utility districts (PUDs), such as Benton PUD and Clark County PUD No. 1 (often referred to as Clark Utilities), offer rebates ranging from $100 to $2,000 depending on the type of heat pump (ducted or non-ducted), heat pump house efficiency rating , as well as the existing method of heating the house. Some city utilities, including Centralia City Light, Ellensburg Electric Utility, and Seattle City Light, offer rebates ranging from $300 to $1,600.
Another way is to alleviate the financial burden of residents through loans. Heat pump loans depend on a variety of requirements, including the use of an approved qualified contractor and the fact that the home’s existing heat source is electricity.
Tacoma Power offers a variety of credit options for ducted and ductless heat pumps. For ducted heat pumps, Tacoma Power offers a seven-year interest-free loan of up to $10,000. There are two loan options for ductless heat pumps, the first is a 7-year zero interest loan up to $4,000 and the second is for eligible income customers offering a $3,500 loan and a $500 loan . the house is being sold to a new owner in the future, the homeowner must repay the loan.
Clark Public Utilities also provides loans for the purchase of ducted and ductless heat pumps. The interest rate on the loan for both types of heat pumps is 4.99% with a maturity of 5 years for projects under $10,000 and 7 years for projects over $10,000. Applicable incentives such as discounts will be deducted from the total loan amount.
One innovative approach currently in the pilot phase is the Energy Smart Eastside Collaborative Heat Pump program. The program brings together the cities of Bellevue, Issaquah, Kirkland, Mercer Island and Redmond and various partners to pool motivational resources and expand outreach.
The program operates on a group purchase model where interested eligible residents can purchase a heat pump as part of a group order and receive a discount. The program offers a rebate of at least $500 on installation, and incentives can be combined with city and utility incentives (in this case, Puget Sound Energy). Residents with qualifying incomes are eligible for additional benefits. For example, Bellevue residents with qualifying incomes are eligible for various incentives and funding packages that can lead to free installation.
The Washington State Department of Commerce provides Clean Energy Fund grants for building electrification for projects that support the installation of electrical equipment (such as heat pumps) and fuel conversion (such as converting a building’s heat source from gas to electricity). Local governments can apply for grants for their own buildings and as project administrators. Application materials will be available in autumn 2022.
USA passed. In Congress in August 2022, the Inflation Reduction Act funds the Residential High Efficiency Electrification Rebate Program, which includes up to $8,000 in heat pump rebates for low-income households (distributed by state energy institutions and tribal governments). Eligible households with no income will be eligible for a tax credit of up to $2,000 for installing a heat pump. Discounts will be available in 2023 and tax credits will apply to equipment installed on or after January 1, 2023.
As heatwaves become the summer norm, adding affordable, efficient, and reliable cooling is critical for all Washington residents, especially the low-income and members of the BIPOC community. By working with state and federal resources to incentivize heat pump installations, local governments can help their communities build resilience and equitably adapt to climate change.
MRSC is a private, non-profit organization serving local governments in the state of Washington. Eligible government agencies in Washington State can use our free MRSC Personalized Service to get answers to their legal, political, or financial questions.
Lu joined MRSC in May 2022 as a Public Policy Intern. He is pursuing a Master of Public Administration degree from the University of Washington with concentrations in policy analysis & evaluation, environmental policy, and public financial management. He is pursuing a Master of Public Administration degree from the University of Washington with concentrations in policy analysis & evaluation, environmental policy, and public financial management. He is pursuing a master’s degree in public administration from the University of Washington with a concentration in policy analysis and evaluation, environmental policy, and public financial management. He is pursuing a master’s degree in public administration from the University of Washington, specializing in policy analysis and evaluation, environmental policy, and public financial management.
Lu previously worked for the Sierra Club as a Litigation Lawyer and Research Analyst working on a variety of topics including climate change, environmental justice, fossil fuel infrastructure and transportation.
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