The Wisconsin Public Services Commission, which regulates the state’s public companies, is currently deciding what role the state’s energy efficiency program will play in developing the local heat pump market. Heat pumps are an efficient, climate-friendly solution for space heating and cooling that can work well in the cold climate of Wisconsin. By replacing fossil fuel stoves, heat pumps can also help mitigate future gas infrastructure costs and improve indoor and outdoor air quality that directly affects health.
With 80 percent of homes in Wisconsin still burning fossil fuels for heating, Wisconsin residents have questions about heat pumps. In this article, we provide answers to three major questions we hear from Wisconsin decision makers about this technology. Addressing these important issues will now ensure that Wisconsin makes the right call to ensure an accessible, climate-friendly and resilient building sector.
See this heat pump source 101 for an introduction to the technology.
Yes, heat pumps installed in Wisconsin today produce fewer life-cycle emissions than gas or propane stoves.
Heat pumps are inherently more efficient than fossil fuel stoves or traditional electric resistance heating technologies because they generate heat instead of generating heat. Our analysis reveals that an easily available heat pump that meets minimum energy Star efficiency will produce approximately 30 percent fewer life-cycle emissions than a gas stove, assuming Wisconsin is 95 percent carbon neutral by 2050. This assumption is more conservative than current utility commitments to be 100 percent carbon neutral by 2050. A better-performing heat pump predicts life-saving savings to increase to about 50 percent. High-performance heat pump technology has improved dramatically over the past decade, leading to better performance at much lower temperatures than previously possible. This improved performance, combined with the growing share of renewable energy in the grid, makes heat pumps an efficient climate solution in Wisconsin.
Yes, heat pumps are already cheap for key uses in Wisconsin.
With an annual moratorium on the exclusion of utilities in the winter ending in April, Wisconsin residents are now facing serious concerns about paying their utility bills. These concerns have been heightened by recent increases in natural gas prices, which Wisconsin utilities have warned will lead to an increase in utility bills. Because heat pumps are highly efficient and have more stable electricity prices, a study by the Wisconsin Public Services Commission (PSC) found that heat pumps can already reduce costs for residents in key situations.
1. New construction:
Building new houses with full electricity is cheaper in advance than building houses with mixed fuel because developers avoid the cost of gas infrastructure on the property, which can be on the scale of $ 5,000 for a single-family house.
2. Propane, electrical resistance and gas retrofitting:
According to a report on the PSC heat pump, 300,000 households in Wisconsin that use supplied fuels, such as propane or electric resistance for heating, could save money by switching to heat pumps.
| Retrofit Application | Annual savings of heat pumps |
|---|---|
| Family electrical resistance | $ 705 |
| Family electrical resistance | $ 417 |
| Propane Furnace | $ 531 |
Heat pumps have an economic advantage in these two situations because they are highly efficient technologies that can affect stable electricity prices. The advantage of heat pumps in efficiency over electric heat resistance leads to savings on the utility bill of up to $ 700 per year. Compared to propane and gas stoves, heat pumps are almost three times more efficient. Due to this increase in efficiency and high costs of propane fuel, households switching from propane to heat pump can achieve savings of over $ 500 per year.
While low gas prices have made lower prices for customers an option for years, the sharp rise in gas prices in recent months has made gas less economically attractive. For example, customers of one of the largest state-owned gas companies, Wisconsin Gas, paid 24 percent more for gas in May 2022 than in October 2021. Gas prices have been rising for years, with Wisconsin Gas customers paying 34 percent more in winter 2018. 19 from the winter of 2021–22.
3. Replacement of AC and gas furnaces:
As the effects of climate change raise summer temperatures to more, more people will need reliable air conditioning. Unlike fossil fuel stoves, heat pumps can function both as a space heater and as an air conditioner. A study of heat pumps commissioned by PSC found that heat pumps can cost a quarter more than buying furnaces and AC units separately.
| Appliances | Preliminary costs |
|---|---|
| Gas stove and air conditioning | $ 6,600- $ 8,600 |
| Heat pump without duct | $ 2.3600- $ 4,800 |
| Air source heat pump | $ 4,200- $ 9,000 |
Adopting heat pumps in the short term can reduce investment in gas infrastructure with minimal impact on peak electricity generation needs.
In November 2021, the Wisconsin PSC approved a $ 370 million gas storage site. This expensive project has the capacity to serve about 14,000 households a year. Such costly gas infrastructure costs could be mitigated in the future if Wisconsin invests in heat pumps instead. PSC could have avoided further investments in fossil fuels and made it more affordable by encouraging 20,000 heat pumps through the state efficiency program, Focus on Energy (roughly the amount of gas stoves it encourages annually).
However, as Wisconsin becomes less dependent on gas, it is important to consider the impact of this new technology on the electrical system. Wisconsin electricity demand peaks in the summer, meaning there is room to add heat pumps without worsening the system’s winter peak. Our modeling reveals that even if Focus boosts 800,000 heat pumps, 10 times more heat pumps than furnaces have done in the past four years, the state will still be able to meet its electricity needs with currently active power plants, even at the coldest days. An additional 800,000 heat pumps would add 850 MW of peak demand, but Wisconsin production capacity would still exceed total demand by over 5,000 MW. High-performance heat pumps can also offer benefits to mitigate summer peak needs, as heat pump technologies most likely to be adopted for heating also provide highly efficient cooling during summer days.
Note: Winter capacity is estimated using EIA 860 data and Wisconsin plant winter capacity factors. The average and extreme load of Wisconsin is estimated from MISO’s local resource zone data and summed with heat pump clock data (SEER 16 and 10 HSPF) operating in climate zone 6. Winter is defined as months that require heating in Wisconsin – May). Source: RMI
These results clearly show that even drastically expanded heat pump programs will not affect Wisconsin’s winter highs and can alleviate future gas infrastructure needs and short-term summer capacity constraints. As Wisconsin continues to research electrification, demand response and energy efficiency measures can further reduce the impact on the grid.
In Wisconsin, heat pumps reduce emissions over the life of the device, reduce consumer costs in key situations, and have minimal short-term impact on the power grid. Because Wisconsin prioritizes heat pumps, Focus on Energy can be a tool to accelerate the heat pump market, ensuring that every Wisconsin has access to affordable, clean space heating.
Lauren Reeg, Ana Sophia Mifsud
© 2021 Rocky Mountain Institute. Published with permission. Originally published on RMI Outlet.
Featured photo courtesy of The Heat Pump Store
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