Heat Pumps: The First Step to Decarbonize Thermal Energy Use in Buildings

While there has been some progress in decarbonizing the electricity sector, not enough has been done in the buildings sector. Buildings are responsible for one third of energy consumption and almost 25% of greenhouse gas emissions in cities like New York. Space heating is the largest consumer of energy in buildings, and in response, there is a trend toward the electrification of heating and cooling technologies to reduce carbon emissions in buildings. There is more than one way to achieve this—electric resistance heating, radiant heating, solar-hydronic, and biomass combustion—however, heat pumps provide the most efficiency and cost-effectiveness of these options. 

What Is the Challenge We Face?

Heat pumps are already the leading form of heating and cooling in many parts of the world. However, due to the prevalence of natural gas in the US, heat pump systems have been slower to penetrate the North American market, as central furnaces represent the majority of systems used instead. In addition, natural gas was promoted as a clean fuel decades ago. However, science now shows that climate impacts of natural gas have been underestimated, especially given the increased leakage from natural gas systems. For every 1% increase in leakage rates, the estimated impact of natural gas on the climate increases by 10%. Additionally, methane, the main component of natural gas, can warm the planet up to 80 times more than the same amount of CO2. 

What About Heat Pumps?

Heat pumps for space heating use the same technology used in refrigeration, but run the process in reverse to make heat without the requirement for onsite combustion of fossil fuel. A heat pump requires a heat sink from which to pull heat which is then pumped into a space. The two most basic options are ground source heat pumps and air source heat pumps. Ground source heat pumps, commonly called geothermal, use the consistent temperature of the earth to provide a source for heating and cooling. For those who desire extreme efficiency, there is no better choice. However, installation is expensive, with large land requirements and the high cost of digging 300-feet deep holes making this type of heat pump cost prohibitive. Air source heat pumps draw heat from the ambient air and move it indoors for heating or outdoors for cooling. Air source heat pumps are 3-4 times more efficient than gas-powered equipment, reasonably priced, and easy to install.

What Are Leading Cities Doing?

Although heat pumps have been used for years in warmer parts of the US, they have not been used in areas with extended periods of subfreezing temperatures. Moreover, heat pump technology has advanced in recent years to offer a legitimate space heating alternative in colder regions. The efficiency and cost savings of switching to heat pumps can be significant, depending on the fuel currently used.

There are projects pushing for the replacement of natural gas furnaces and boilers with a new generation of efficient heat pumps. For example, Carbon Neutral Cities Alliances funded an initiative led by four cities—New York City; Boulder, Colorado; Washington, DC; and Burlington, Vermont—to decarbonize thermal use in buildings. The goal is to scale up the deployment of renewable heating and cooling technologies in combination with increasing deployment of renewable electricity to decarbonize buildings.

Given these efforts led by cities and advancements in heat pump technology, Guidehouse Insights estimates the global heat pump market will grow steadily from $3.2 billion in 2018 to $7.1 billion in 2027. For more information on the future outlook of the heat pump market, refer to the Guidehouse Insights report HVAC Energy Efficiency in Commercial Buildings.