Heat Pumps Report 2022 (2024)

Heat Pumps Report 2022 (1)

The aim of this qualitative research study was to highlight the potential impact of the existing HFC refrigerant phase down on the domestic heat pump sector in the European Union (EU), while also considering how an even stricter phase down, that is in line with EU climate neutrality objectives, can accelerate the shift from fossil-fuel-based heating systems to natural refrigerants heat pumps.

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Heat pumps are expected to contribute significantly to the decarbonisation of heating supplies in European households. However, not all heat pumps are the same. Despite suitable natural refrigerant-based alternative technologies being readily available on the European market, domestic heat pump systems often rely on highly polluting synthetic substances like fluorinated greenhouse gases (f-gases) to transfer heat. These gases are of concern due to their high global warming potential that can contribute considerably to the greenhouse effect and the worsening of climate change.

Figure 12 – Share of sales divided amongst heat pump technologies in the EU21

Heat Pumps Report 2022 (2)

As EU policy tightens around the use of f-gases, the path to changing to natural refrigerant alternatives in heat pumps becomes even more obvious for ensuring future-proof, sustainable installations. On 5 April 2022, the European Commission proposed a new amended version of the EU F-Gas Regulation targeting climate polluting f-gases. The proposal strengthens the HFCs phase-down schedule (ca. 98% reduction on the allowed quantity by 2048 based on the level in 2015) and introduces prohibitions targeting new heat pumps and air conditioners.

Following the release of the proposal, trade bodies representing the interest of some of the industry’s incumbents have cautioned against intrusive policy action in this realm, revamping old concerns related to climate objectives, energy efficiency and safety. They believe that a tighter phase down of HFCs and the proposed bans will risk undermining climate objectives by slowing down the deployment of heat pumps across the continent. This stance is stressed even more against the need to phase out Russia’s imports of fossil fuels, in light of the country’s invasion of Ukraine.

However, the European Commission explanatory memorandum, released with the proposal, is clear in this regard: bans are introduced because alternatives are technologically ready and are available on the market. Even considering the urgency of the deployment of the technology to reduce reliance on Russia’s imports, the European Commission reports that a sufficient buffer is considered in place with the preferred HFC phase-down option.

The European Commission’s increased ambition on this regulation is supported by the findings of this research. With specific reference to heat pumps, systems running with naturally occurring working fluids (such as hydrocarbons, carbon dioxide and/ or ammonia) that do not deplete the ozone layer and have negligible global warming potential, are a market reality today and can substitute those relying on f-gases. These systems are efficient and more climate aligned. Interviewed companies operating with natural refrigerant heat pumps are ready to scale up their production and meet an increasing demand triggered by decarbonisation policies.

Our sample group interviews with heat pump manufacturers in Europe point to a growing presence of original equipment manufacturers (OEMs) across Europe with systems running with natural refrigerants in their portfolio. These companies are varied in size and their commitments to phasing down fluorinated gases. Companies that have already significantly detached themselves from fluorinated working fluids reported confidence in their ability to quickly scale up production and reconvert old technology production lines pushed by the right policy framework. Not only are decarbonisation policy efforts seen as paving the way for the deployment of heat pumps, but also regulations affecting fluorinated greenhouse gases are held in high regard for determining the direction of travel.

Figure 13 – Overview of Europe-based companies along the heat pump industry and their use of refrigerants

Heat Pumps Report 2022 (3)

Analyses have proven that fluorinated refrigerants are commonly more expensive than alternatives, as they are subject to restrictions at the global and EU levels. According to interviewees, HFCprices have increased and are expected to rise in the coming years. On the contrary, the prices of natural alternatives have proven stable and low; no interviewees have experienced price hikes with these heat carriers, and none have experienced any issues with availability on the EU market.

In terms of system costs, we have gathered from our research that the price difference between HFC-based equipment lines and natural refrigerant alternatives is generally below 20%, a difference that is mainly due to the need to handle flammable substances along the production line.

Costs related to setting up a production line vary according to the targeted capacity – the construction of a new facility is reported as being the most burdensome cost when this decision is taken at management level. However, CAPEX costs are not seen as particularly demanding for setting up the line of production for products dedicated to natural refrigerants, and companies’ situations are very diverse in this regard. Interviewees estimate an increase ranging between 2 and 10% when setting up production lines for natural refrigerants heat pumps, mainly based on hydrocarbons.

In any case, both the equipment price and the production line costs’ percentage difference seem relatively small compared to the estimated percentage surcharge for HFCs in tandem with the phase-down schedule proposed by the European Commission, increasing 335% from 2025 to 2050.

First-mover OEMs that have set up production lines based on natural refrigerants are experiencing up to triple-digit growth in this market segment and high demand. Driven by existing policy measures, some of these stakeholders expect up to 90% of the heat pumps they produce to be based on natural refrigerants in a few years’ time.

Figure 15 – Main drivers and barriers to the uptake of natural refrigerants heat pumps as mentioned during the interviews with industry stakeholders

Heat Pumps Report 2022 (4)

The interviewees cited policy as the main driver for innovation (or lack thereof as the main obstacle to innovation) and gave information that points to the need to raise awareness of the problem posed by fluorinated gases and to support the demand for natural fluids, hence creating economies of scale that would eventually lower the small premium currently associated with producing these climatealigned systems.

The critical nature of policy intervention is clear from the scale-up success story of natural alternatives in commercial refrigeration. Carbon-dioxide-based installations in commercial refrigeration have grown from just 140 in 2008 to more than 38,000 in 2021, pushed by the introduction of prohibitions in the sector and a general phase down of HFCs, despite conservative concerns that these provisions would have hindered the sector due to some considering natural alternatives as “unreliable”, “unsafe” and “energy inefficient”. These are the same messages currently being conveyed regarding heat pumps. For the commercial refrigeration sector, all these points have been debunked.

Figure 16 – The evolution – CO2 Transcritical installations in the world

Heat Pumps Report 2022 (5)

Heat Pumps Report 2022 (6)

The insights shared in this report support the stance that there should be no detachment between the timelines related to the decarbonisation of the heating sector and the wind-down of fluorinated substances used as refrigerants.

The objective of this research is to highlight the potential impact of the existing HFC phase down on the domestic heat pump sector, while also considering how an even stricter phase down that is in line with EU climate neutrality objectives can accelerate the shift from fossil-fuel-based heating systems to clean heat pumps.

It will consider the applicable drivers and barriers impacting stakeholders in the EU’s residential natural refrigerant heat pump sector, framed within the context of decarbonising Europe’s heating sector and transitioning towards electrification. Regulations in terms of bans on fluorinated gases are considered a main driver to this aim, and focus is therefore placed specifically on the EU F-Gas Regulation.

It is our goal to demonstrate, by means of an in-depth qualitative study, how the climate objectives set by the European Commission can be achieved. We also aim to address the heat pump industry’s fear of losing the market to Chinese competitors, who are believed to be ahead in natural-refrigerant-based heat pump production, by trying to gauge this risk.

The scope of this research covers heat pumps for space heating and domestic- and sanitary-water heating applications. Combined units are included. It excludes, however, air-to-air and hybrid systems and reversible models.

The study focuses on heat pumps with a rated capacity of <12 kW as this segment is assumed to be relevant for the residential sector. It is also the cut-off point for heat pumps covered under Commission Regulation (EU) No 206/2012 of 6 March 2012 implementing Directive 2009/125/EC of the European Parliament and of the Council with regards to Ecodesign requirements for air conditioners and comfort fans.

The aim of this exploratory research study was to provide decision-makers with support in showing that the decarbonisation of the European heating systems can be achieved without omitting action on fluorinated greenhouse gases.

To achieve this, the study has shared qualitative insights gathered from the European heat pump industry on its journey towards the uptake and scale-up of natural-refrigerant-based solutions.

In the residential sector, the decarbonisation of heating systems in Europe is often associated with the technological transition from fossil-fuelpowered appliances (such as gas or oil boilers) towards those using electricity, with primary reference to heat pumps.

Figure 14 – Changes in the European Residential Heating Market

Heat Pumps Report 2022 (7)

Heat pumps deliver heat by means of renewable energy (temperature present in the environment surrounding the system) and electricity from the grid. This technology shows high energy efficiency, assuming that electricity from the grid will increasingly be generated by renewable sources. As such, heat pumps can contribute significantly to the decarbonisation of heating supplies in European households.

Heat pumps are set to play an important role in reducing emissions and energy consumption from the building sector, which accounts for roughly 40% of European energy consumption and is therefore considered the single largest energy consumer in the bloc. Energy for heating, cooling and domestic hot water accounts for 80% of citizens’ energy consumption, and the same buildings we live in are also responsible for 36% of energy-related, indirect greenhouse gas emissions.

Industry stakeholders and forecasts from the European Commission suggest that approximately 40 million heat pump units are expected to be deployed by 2030 and approximately 50 million by 2050, according to different decarbonisation scenarios. Our research suggest that air-source heat pumps will be the technology bound to gain the lion’s share of this deployment.

Not all heat pumps are the same, and equipment often relies on highly polluting synthetic substances to transfer heat from a source to a sink, i.e., moving heat to where it is used. These substances are identified as fluorinated greenhouse gases and are substances of concern primarily for their high global warming potential that contribute considerably to the greenhouse effect, especially when compared to available natural refrigerant alternatives with negligible impacts on direct emissions. Hydrofluorocarbons, or HFCs, are the most well-known substances in this group and are targets of a specific amendment to the Montreal Protocol on Substances that Deplete the Ozone Layer (the Kigali Amendment).

This amendment, adopted in 2016, plans for the global reduction of production and consumption of HFCs; only meeting the goal of this amendment could reduce the temperature increase by up to 0.5 degrees Celsius. The European Union has long regulated these substances under regulations on ozone-depleting substances (Reg. (EC) No 1005/2009) and fluorinated greenhouse gases. The latter was first introduced in 2008 (Reg. (EC) No 842/2006) and then revised in 2014 (Reg. No 517/2014).

On 5 April 2022, the European Commission proposed a new amended version of the EU F-Gas Regulation, pursuing an alignment of this climate-related legislation with the overarching climate objectives enshrined in the European Union Climate Law. These would include reducing greenhouse gas emissions by 55% by 2030 compared to 1990 levels and reaching climate neutrality by 2050. All economic sectors need to contribute to these emission reductions, and the European Commission has stated multiple times that “business as usual” must change. Overall, the proposal strengthens the HFCs phase-down schedule (ca. 98% reduction on the allowed quantity by 2048 based on the level in 2015), and introduces prohibitions targeting heat pumps and air conditioners, namely:

  • as of 1 January 2025, single split systems containing less than 3 kg of fluorinated greenhouse gases listed in Annex I that contain, or whose functioning relies upon, fluorinated greenhouse gases listed in Annex I with a GWP of 750 or more;
  • as of 1 January 2027, split systems of a rated capacity of up to and including 12 kW containing, or whose functioning relies upon, fluorinated greenhouse gases with a GWP of 150 or more, except when required to meet safety standards; and
  • split systems with a rated capacity of more than 12 kW containing, or whose functioning relies upon, fluorinated greenhouse gases with a GWP of 750 or more, except when required to meet safety standards.

Figure 4 – Visual comparison of the HFC phase down scenarios in the proposal, the current schedule and the Kigali schedule

Heat Pumps Report 2022 (8)

Following the release of the proposal, trade bodies representing the interest of some of the industry’s incumbents have cautioned against intrusive policy action in this realm, revamping old concerns related to climate objectives, energy efficiency and safety. They believe that a tighter phase down of HFCs and the proposed bans will risk undermining climate objectives by slowing down the deployment of heat pumps across the continent. This stance is stressed even more against the need to phase out Russia’s imports of fossil fuels, in light of the country’s invasion of Ukraine.

However, the European Commission explanatory memorandum, released with the proposal, is clear in this regard: bans are introduced because alternatives are technologically ready and are available on the market. Even considering the urgency of the deployment of the technology to reduce reliance on Russian imports, the European Commission reports that a sufficient buffer is considered in place with the preferred HFCs phase-down option.

In addition, we have gathered from our interviews that these trade bodies’ stance on this regulation does not seem to be shared by all companies operating mainly with fluorinated refrigerants. A key manufacturer outright said that the regulation was not considered a barrier to the deployment of heat pumps.

Heat pumps running with naturally occurring working fluids, such as hydrocarbons, carbon dioxide and/or ammonia, are a market reality. With no ozone depletion and negligible global warming potential, these heat carriers are considered future proof — unlike the new synthetic substances with low GWP being proposed as substitutes, which show worrisome features. In addition, domestic systems charged with natural refrigerants have also been found to be potentially less polluting on a life cycle climate performance analysis.

Our sample group interviews with heat pump manufacturers in Europe point to a growing presence of original equipment manufacturers across Europe with systems running with natural refrigerants in their portfolio. These companies are varied in sizeand their commitments to phasing down fluorinated gases. Companies that have already significantly detached themselves from fluorinated working fluids reported confidence in their ability to quickly scale up production and reconvert old technology production lines pushed by the right policy framework. Not only are decarbonisation policy efforts seen as paving the way for the deployment of heat pumps, but also regulations affecting fluorinated greenhouse gases are held in high regard for determining the direction of travel.

These companies prefer to “leapfrog” their technologies directly towards ultra-low GWP solutions that are not subject to climate- or chemical-related regulatory constrictions, seeing intermediary steps – such as using HFC-32 or hydrofluoroolefins (HFOs) – as clouded in uncertainty and possibly leading to additional costs.

Fluorinated refrigerants are commonly more expensive than alternatives, because they are subject to restrictions at the global and EU levels. According to interviewees, HFC prices have increased and are expected to rise in the coming years; illegal trade is believed to have had a dumping effect on the market, preventing regulatory measures from fulfilling their original purpose. With the steeper phase down proposed, and assuming limited influence from illegal trade, surcharge estimates reach up to €372019/tCO2e in 2025 and €1612019/tCO2e in 2050, with an average year-over-year growth of 35%.

Figure 6 – Estimated HFCs price surcharges for ‘baseline’ and ‘proportionate action’ scenarios (2025, 2030, 2035, 2040, 2045 and 2050)

Heat Pumps Report 2022 (9)

In addition, China has recently adopted the Kigali Amendment, and, as the main producers of fluorinated substances at the global level and a major exporter of HFCs to the European market, a reduction in the tonnes produced is likely to increase the prices of these fluorinated substances. However, the prices of natural alternatives have proven stable and low; no interviewees have experienced price hikes with these heat carriers, and none have experienced any issues with availability on the EU market. Relying on natural alternatives to scale up the deployment of heat pumps was not listed as a concern in the interviews.

The science targeting fluorinated greenhouse gases is constantly improving, and, unfortunately, it is only uncovering the problems caused by these substances on Earth’s dynamic after the fact, forcing the global community to address the problem. This is the case for the ozone depletion and the global warming potential; more specifically, the same HFC-32’s GWP 100-year value has been updated increasing from 677 to 771 in the Sixth Assessment Report by the Intergovernmental Panel on Climate Change (IPCC) in 2021. In addition, its GWP 20-year is a staggering 2,530, which is a more realistic value to consider due to its short-lived presence in the atmosphere. Recent studies consider these synthetic substances as novel entities and point to Earth’s finite ability to cope with their exponential release into the environment, sounding the alarm on the deployment of the next generation of potential synthetic substitutes.

As European production of HFCs is being phased down due to successful regulatory efforts, RACHP stakeholders are relying on imports from outside the EU to satisfy their needs for fluorinated refrigerants. Sixty-six per cent of imported HFCs come from China, whose companies are pursued by other countries in their anti-dumping efforts, attesting to their ability to flood markets. Some EU-based stakeholders believe that operating with the HFC-32 working fluid would favour EU-based companies as extra EU market players are thought to have a competitive advantagewhen operating with alternatives, especially when it comes to heat pumps.

However, interviewees often held the opposite position, signalling that EU-based companies might have a competitive advantage in operating with natural flammable refrigerants due to the strict safety standards forcing European companies to excel in their products; non-EU companies are perceived to be more skilled in handling HFC-32 than hydrocarbons, specifically in the air-to-water heat pump market segment. This is also reinforced by interviewees’ commitments to opt for increasingly sourcing raw materials rather than importing off-the-shelf, pre-packed systems to sell in the EU market. Our findings also suggest that, besides a few exceptions, the Chinese industry operating with natural refrigerants is still “at an early stage of commercialization.”

We have seen from our research that the price difference between HFC-based equipment lines and natural refrigerant alternatives is generally below 20%, a difference that is mainly due to the need to handle flammable substances along the production line. This is also related to the need to source specific components capable of meeting the required standards. However, given the right policy framework in place, contributors to the study suggested that economies of scale can be easilyachieved as most of the components used in heat pump systems can be adapted from other RACHP sectors. The critical nature of policy intervention for the development of specific technologies is clear from the success story of natural alternatives in commercial refrigeration: both hydrocarbonsand carbon-dioxide-based technologies have been scaled up quickly.

Our research finds that carbon-dioxide-based installations in the commercial sector have grown from just 140 in 2008 to more than 38,000 in 2021, pushed by the introduction of prohibitions in the sector and a general phase down of HFCs, despite conservative concerns that these provisions would have hindered the sector due to natural alternatives considered unreliable, unsafe and energy inefficient. These are the same messages currently being conveyed regarding heat pumps. For the commercial refrigeration sector, all these points have been debunked.

The science targeting fluorinated greenhouse gases is constantly improving, and, unfortunately, it is only uncovering the problems caused by these substances on Earth’s dynamic after the fact, forcing the global community to address the problem. This is the case for the ozone depletion and the global warming potential; more specifically, the same HFC-32’s GWP 100-year value has been updated increasing from 677 to 771 in the Sixth Assessment Report by the Intergovernmental Panel on Climate Change (IPCC) in 2021. In addition, its GWP 20-year is a staggering 2,530, which is a more realistic value to consider due to its short-lived presence in the atmosphere. Recent studies consider these synthetic substances as novel entities and point to Earth’s finite ability to cope with their exponential release into the environment, sounding the alarm on the deployment of the next generation of potential synthetic substitutes.

As European production of HFCs is being phased down due to successful regulatory efforts, RACHP stakeholders are relying on imports from outside the EU to satisfy their needs for fluorinated refrigerants. 66% of imported HFCs come from China, whose companies are pursued by other countries in their anti-dumping efforts, attesting to their ability to flood markets. Some EU-based stakeholders believe that operating with the HFC-32 working fluid would favour EU-based companies as extra EU market players are thought to have a competitive advantage when operating with alternatives, especially when it comes to heat pumps.

However, interviewees often held the opposite position, signaling that EU-based companies might have a competitive advantage in operating with natural flammable refrigerants due to the strict safety standards forcing European companies to excel in their products; non-EU companies are perceived to be more skilled in handling HFC-32 than hydrocarbons, specifically in the air-to-water heat pump market segment. This is also reinforced by interviewees’ commitments to opt for increasingly sourcing raw materials rather than importing off-the-shelf, pre-packed systems to sell in the EU market. Our findings also suggest that, besides a few exceptions, the Chinese industry operating with natural refrigerants is still “at an early stage of commercialization.”

We have seen from our research that the price difference between HFC-based equipment lines and natural refrigerant alternatives is generally below 20%, a difference that is mainly due to the need to handle flammable substances along the production line. This is also related to the need to source specific components capable of meeting the required standards. However, given the right policy framework in place, contributors to the study suggested that economies of scale can be easily achieved as most of the components used in heat pump systems can be adapted from other RACHP sectors. The critical nature of policy intervention for the development of specific technologies is clear from the success story of natural alternatives in commercial refrigeration: both hydrocarbons- and carbon dioxide-based technologies have been scaled up quickly.

Our research finds that carbon dioxide-based installations in the commercial sector have grown from just 140 in 2008 to more than 38,000 in 2021, pushed by the introduction of prohibitions in the sector and a general phase down of HFCs, despite conservative concerns that these provisions would have hindered the sector due to natural alternatives considered unreliable, unsafe and energy inefficient. These are the same messages currently being conveyed regarding heat pumps. For the commercial refrigeration sector, all these points have been debunked.

Figure 18 – Evolution of the number of transcritical CO2 installations in Europe – commercial applications only (2008–2021)

Heat Pumps Report 2022 (10)

Costs related to setting up a production line vary according to the targeted capacity – the construction of a new facility is reported as being the most burdensome cost. This cost is, however, not unique to natural refrigerant production lines; it applies generally to all projects. Likewise, other costs affecting industries, such as supply chain bottlenecks, energy costs and sourcing raw materials, also apply across the board. CAPEX costs are therefore not seen as particularly demanding for setting up the line of production for products dedicated to natural refrigerants, and companies’ situations are very diverse in this regard. Interviewees estimate an increase ranging between 2 and 10%.

However, both the equipment price and the production line costs’ percentage difference seem relatively small compared to the estimated percentage surcharge for HFCs in tandem with the phase-down schedule proposed by the European Commission, increasing 335% from 2025 to 2050.

EU-based companies active in the heating industry are also reconverting their old technology production lines to scale up the production of natural-refrigerant- based heat pumps with a delay of a few years (and with a commitment of up to three years). Besides some administrative barriers related to upgrading production sites for flammability-related requirements, no other impediments were listed across the interviews. It is expected that production could be scaled up fairly quickly should additional sectoral bans on high-GWP refrigerants accelerate the demand for natural refrigerant heat pumps.

At the same time, first-mover OEMs that have set up production lines based on natural refrigerants are experiencing up to triple-digit growth in this market segment. Driven by existing policy measures, some of these stakeholders expect up to 90% of the heat pumps they produce to be based on natural refrigerants in a few years’ time. Nevertheless, the same stakeholders fear that a lack of targeted regulatory measures might hinder the development of this market and relegate this product to a “niche”.

The interviewees cited policy as the main driver for innovation (or lack thereof as the main obstacle to innovation) and gave information that points to the need to raise awareness of the problem posed by fluorinated gases and to support the demand for natural fluids, hence creating economies of scale that would eventually lower the small premium currently associated with producing these climatealigned systems. By creating the mass demand for natural-refrigerant-based heat pumps through clear policy measures, the interviewed companies are set to gain from their early mover status; EU-based companies aim to meet the required amount of heat pumps as European households decarbonise.

The insights shared above support the stance that there should be no detachment between the timelines related to the decarbonisation of the heating sector and the wind-down of fluorinated substances used as refrigerants. To ensure a truly sustainable, future-proof heating industry, the two policy schemes must unfold in parallel, be aligned and be complementary. Transitioning to natural refrigerant heat pumps would eliminate a technically unnecessary middle step and achieve carbon-neutrality targets faster. The technology to leapfrog towards natural refrigerants in all kinds of heat pumps is already available in the EU market.

In light of the climate emergency we currently face, every single GWP reduction we can achieve counts greatly, and coordinated action across all policy realms should be considered the standard working method, not an obstacle.

This project is an effort undertaken by ATMOsphere (shecco) and funded by the European Climate Foundation (ECF). The European Environmental Bureau (EEB) and the Environmental Coalition on Standards (ECOS) conceptualised the study and participated as managing organisations.

About ATMOsphere

ATMOsphere (shecco) is a global and independent market accelerator with a mission to clean up cooling. Its Intelligence Department collaborates with industry stakeholders such as policymakers, NGOs and academia to contribute knowledge for the acceleration of clean cooling solutions in the global RACHP sector.

About ECOS

TheEnvironmental Coalition on Standardsis an international NGO with a network of members and experts advocating for environmentally friendly technical standards, policies, and laws.

About EEB

TheEuropean Environmental Bureauis the largest network of environmental citizens’ organisations in Europe. It currently consists of over 170 member organisations in more than 35 countries (all EU Member States plus some accession and neighbouring countries), including a growing number of European networks, and representing some 30 million individual members and supporters.

About ECF

TheEuropean Climate Foundationis an EU-based NGO dedicated to managing philanthropic resources to respond to the global climate crisis by creating a net-zero greenhouse gas emissions society.

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Heat Pumps Report 2022 (2024)

FAQs

Heat Pumps Report 2022? ›

The year 2023 may be the best for homeowners buying a new heat pump. The new Inflation Reduction Act (IRA) includes incentives for upgrading a home's energy efficiency, including tax rebates and discounted purchasing.

Should I buy a heat pump now or wait until 2023? ›

The year 2023 may be the best for homeowners buying a new heat pump. The new Inflation Reduction Act (IRA) includes incentives for upgrading a home's energy efficiency, including tax rebates and discounted purchasing.

What is the forecast for heat pumps? ›

The global residential air source heat pumps market is expected to grow from USD 53.7 billion in 2020 to USD 175.4 billion by 2028, at a CAGR of 15.6% during the forecast period.

What is the Inflation Reduction Act of 2022 new heat pump? ›

The Inflation Reduction Act provides rebates that can cover up to 100% of the costs of purchasing and installing a new electric heat pump clothes dryer, depending on household eligibility.

What is the downfall of heat pump? ›

Here are the cons of heating and cooling your home with a heat pump: Higher installation cost: Because heat pumps are more complex, they cost more to purchase and install than a comparable air conditioner. However, you may save money compared to replacing an AC unit and furnace at the same time.

Will heat pump prices go down in 2023? ›

HVAC prices are expected to rise in 2023 because of the new SEER2 standards. HVAC system prices will occur through installation and repair costs to homeowners and business owners. Increased prices for HVAC equipment will likely jump between 15% to 25% in the early months of 2023.

Why don t contractors like heat pumps? ›

Some contractors have an issue with heat pumps because heat pumps are not as forgiving as gas furnaces. It takes more effort to install a heat pump properly, as they don't have loads of extra capacity. I believe this is another big reason why contractors and talk consumers out of heat pumps.

What month is best to buy a heat pump? ›

For many people the decision to invest in a heat pump takes place around the end of summer. September is the peak sales period for heat pumps and most heat pump sales occur between August and December in many countries (southern countries being an exception).

Is now a good time to buy a heat pump? ›

Temperatures are warm enough that you won't have to suffer while you wait for the installation. There is also slightly less demand in the summer, so there will be more installation times available to you. Demand will start to pick up toward the end of summer, so it's best to make your purchase as soon as possible.

Are heat pumps still a good choice? ›

Heat pumps are generally more efficient than gas furnaces, but their efficiency may be affected by colder temperatures. The cost to completely replace a central heating system should also be taken into consideration when deciding whether to switch to a heat pump.

What SEER heat pump qualifies for tax credit? ›

In general, all ducted heat pumps that have earned the ENERGY STAR label are eligible, as well as certified mini-split systems (non-ducted) with: SEER2 > 16. EER2 > 12. HSPF2 > 9.

Will the Inflation Reduction Act pay for my heat pump? ›

The federal Inflation Reduction Act will provide funding for residential energy efficiency and electrification. For households with low or moderate income, it funds point-of-sale rebates for qualified high-efficiency electric appliances, such as heat pumps for space heating and cooling.

What is the Inflation Reduction Act for HVAC 2023? ›

Effective January 1, 2023, this tax credit gives homeowners equal to 30% of installation costs for the highest efficiency tier products, up to $600 for qualified air conditioners and $600 for qualified furnaces, as well as up to $2,000 for qualified heat pumps.

Why not to install a heat pump? ›

Heat pumps might struggle in drafty, poorly insulated homes. You might need to upgrade your electrical service to support whole-house electric heating. And it's possible that you'll want to keep (or add) a backup heating system just in case the weather gets so unusually cold that your heat pump can't keep up.

What is the lifespan of a heat pump? ›

Heat pumps normally last an average of 15 years, though some can wear out after a decade. Some of the newer units being manufactured today can last a bit longer. The factor most important in determining the lifespan of your heat pump is maintenance.

Are heat pumps overpriced? ›

In conclusion, heat pumps are an efficient and effective way to heat homes and buildings, but they can be quite expensive due to various factors such as high initial costs, complex installation, high-quality components, research and development and limited production.

How much is a heat pump for a 2000 sq ft house? ›

For a 2,000 square foot home you will want to install a 4 ton heat pump, with each ton being able to output 12,000 BTU's an hour will cost around $2,904 to $7,449 to install.

What is the efficiency of a heat pump in 2023? ›

In 2023, the new minimum efficiency standards for heat pumps will increase by 1.0 SEER to 15.0 SEER. Split-system heat pumps must also achieve a minimum of 8.8 HSPF. Any 14.0 SEER heat pump built before January 1, 2023, can still be installed on or after January 1, 2023.

Will HVAC be more expensive in 2023? ›

Many HVAC manufacturers have already announced price increases in 2023, making headlines as another round of price increases go into effect. The reasons for the increases are due to a multitude of factors, including raw material costs, increased labor rates, fuel and transportation costs, and changes to processes.

Is there something better than a heat pump? ›

A gas-fired furnace generally has a longer lifespan than a heat pump. Furnaces with proper maintenance can last 20 years or more.

Do heat pumps work well in very hot weather? ›

Heat pumps are becoming an increasingly preferred option to air conditioning units in warm-weather climates. That's because they operate extremely efficiently, even at high temperatures. While heat pumps can work in hot weather, the hotter it gets, the less efficient they may become.

Should I replace my HVAC system with a heat pump? ›

The answer is yes. Because it is simply moving heat, heat pumps are more energy efficient than electric furnaces, and can result in a lower energy bill.

Is it cheaper to heat or cool with a heat pump? ›

Does a Heat Pump Use More Electricity for Heating or Cooling? Heat pumps use less energy in cooling mode – by about five times, in fact.

Do heat pumps last longer than AC units? ›

While there are a number of variables that greatly influence the life expectancy of a HVAC system, central AC units typically last longer than Heat Pumps. The reason is that heat pumps heat and cool a home, so they are used year-round.

Can I heat my whole house with a heat pump? ›

One option that is growing in popularity is the whole house heat pump. A whole-house heat pump can provide heating and cooling for your entire home, making it a great choice for those who want an energy-efficient solution.

How to afford a new heat pump? ›

Free assistance
  1. Home insurance. Your home insurance provider may cover the cost of a broken heating and cooling unit. ...
  2. Home warranty. ...
  3. Check with the installers. ...
  4. Borrow against equity. ...
  5. HUD Title I loans. ...
  6. Credit card offers. ...
  7. Apply for a grant. ...
  8. U.S. Department of Energy.
Nov 14, 2022

Are heat pumps worth it or just? ›

Advantages of heat Pumps

They are energy-efficient, which reduces your carbon footprint. A heat pump uses electricity to compress and heat the energy, but since it creates more energy than it uses, that's a big tick in the energy-efficient column.

Can a heat pump use existing ductwork? ›

Can heat pumps use existing ducts as well? Yes! If you already have a central forced air system in your home, a heat pump system still works! In this situation, you'd have the same outdoor condenser unit, but the indoor air handler would connect directly to your ductwork.

How long does it take for a heat pump to pay for itself? ›

For instance, a heat pump has the potential to pay for itself in five to ten years. New heat pumps are also low maintenance and can decrease your energy bills. However, it's also important to consider that older homes with outdated heat pumps could potentially hurt the value of your home.

Is a new HVAC system tax deductible? ›

But how do you go about it? The great news is you can claim it when you file your income taxes in 2021, so now is the time to act! The best part? For qualified HVAC improvements, homeowners might be able to claim 25c tax credits equal to 10% of the install costs (up to a maximum of $500).

What SEER rating do I need for tax credit 2023? ›

To be eligible for the 30% tax credit, an air-source heat pump must be purchased and installed between January 1, 2023, and December 31, 2032, and meet the following criteria: SEER2 rating greater than or equal to 16. EER2 rating greater than or equal to 12. HSPF2 rating greater than or equal to 9.

Are Trane heat pumps ENERGY STAR rated? ›

Our most efficient heat pump is Energy Star Qualified and includes our patented TruComfort™ variable-speed system and integrated communicating technology to keep your home at an optimal temperature and avoid spikes that lead to increased energy consumption.

What is the difference between SEER and SEER2? ›

SEER stands for Seasonal Energy Efficiency Ratio and measures the cooling efficiency of a heat pump or air conditioner. SEER2 is an updated version of SEER set by the Department of Energy that goes into effect Jan. 1, 2023.

What heat pumps qualify for federal tax credit 2023? ›

Energy tax credit 2023 limits

The remaining $2,000 credit is available with any combination of heat pumps, heat pump water heaters, and biomass stoves/boilers. Geothermal heat pump tax credits do not apply toward the limit of $3,200. Energy Star defines the tax credits allowed for geothermal heat pumps.

Are newer heat pumps more efficient? ›

Heat pumps have changed a lot over the years. Most notably, they have become more efficient and better suited to cold climates.

What is the income limit for the Inflation Reduction Act? ›

Currently, the limit is $250,000; it doubles to $500,000 in 2023. Green energy provisions.

What changes are coming to HVAC in 2023? ›

What's Changing? On January 1, 2023 the U. S. Department of Energy (DOE) is bumping up efficiency standards for central air conditioners and heat pumps. Air conditioners and heat pumps will need to meet these new minimum SEER ratings: 14 SEER for systems used in northern states (2022 requirement was 13)

What is the Inflation Reduction Act January 1 2023? ›

Most provisions of the Inflation Reduction Act of 2022 became effective 1/1/2023. The Inflation Reduction Act incentives reduce renewable energy costs for organizations like Green Power Partners – businesses, nonprofits, educational institutions, and state, local, and tribal organizations.

What percent of US homes use heat pumps? ›

From 2005 to 2015, the share of U.S. homes using electricity for their main heating equipment increased from 30% to 36%, with the share of heated homes using a heat pump increasing from 8% to 12%.

Do you need a ventilation system if you have a heat pump? ›

For the most comfortable and healthy environment your home is likely to need both a heating device such as a heat pump and a mechanical ventilation system to ensure adequate fresh air is being circulated through your home. Neither system alone will do both to a high enough level to make them a one-stop solution.

What is the major disadvantage of a heat pump system? ›

Air source heat pumps can experience issues such as icing in cold temperatures, which can ultimately damage the system. Although modern heat pumps do often have automatic defrosting. Their efficiency will also be lower at very cold temperatures, and use more electricity during those cold days.

At what temperature is a heat pump no longer efficient? ›

Low Temperatures Affect Efficiency

When temperatures drop below 25 degrees, the heat pump is no longer the most efficient heating option for your home. If you have auxiliary heating such as electric or gas heating, this is the time to turn it on.

Is it OK to leave heat pump on all day? ›

While heat pumps are the most cost effective way to use electricity to heat your home during the cooler months, leaving them running day and night is not economically efficient. According to Energywise, you should switch off your heat pump when you don't need it. This is to avoid excessive energy waste.

What size heat pump do I need for 2000 sq ft home? ›

If you have a 2,000-square-foot home, this rule of thumb suggests you need a 60,000 BTU heat pump.

What is the failure rate of heat pumps? ›

Overall, the median brand failure rate is 24 percent for conventional A/C systems and 40 percent for A/C systems with heat pumps.

Will heat pumps be the future? ›

Electric heat pumps for homes could be a clean, green technology of the future. Heat pumps offer a green, effective way to heat homes using electricity, not fossil fuels. New designs are making them more efficient and suitable for more conditions.

What are the major changes coming in 2023 for HVAC units? ›

What's Changing? On January 1, 2023 the U. S. Department of Energy (DOE) is bumping up efficiency standards for central air conditioners and heat pumps. Air conditioners and heat pumps will need to meet these new minimum SEER ratings: 14 SEER for systems used in northern states (2022 requirement was 13)

Do heat pumps really save money? ›

Over the course of an average year, heat pumps save our clients about 20-40% on their annual heating and cooling bills—though local utility rates impact savings. Heat pumps can also save money through reduced maintenance expenses and by completely eliminating fees for services such as oil delivery.

What will replace R 410a in 2023? ›

R410-a will be replaced by A2L refrigerants, which are a class of refrigerants that have higher efficiency and lower GWP (Global Warming Potential). The two foremost R410a replacements are R-32 and R-454B. R-32: Zero ozone depletion.

What year did 14 SEER become mandatory? ›

Starting January 1, 2015, split-system central air conditioners installed in the Southeastern Region of the United States of America must be at least 14 SEER.

What are the SEER2 requirements for 2023? ›

The new standards effective in 2023 require a seasonal energy efficiency ratio (SEER)—a measure of a system's cooling performance—of no less than 14 SEER for residential systems in the northern part of the United States and 15 SEER in the southern part of the United States, where cooling loads are a larger share of ...

What is the number 1 rated heat pump? ›

Lennox, Trane, Carrier, and even Rheem heat pumps are all good brands to consider based on their value for the dollar, reliability, and quality components. When choosing the best heat pump brand for you, it's essential to consider all these variables and trust your contractor to have your back.

At what temperature do heat pumps stop being efficient? ›

Heat pumps do not operate as efficiently when temperatures drop to between 25 and 40 degrees Fahrenheit for most systems. A heat pump works best when the temperature is above 40. Once outdoor temperatures drop to 40 degrees, heat pumps start losing efficiency, and they consume more energy to do their jobs.

What are the best heat pumps in 2023? ›

Here are the eight most efficient heat pumps available in 2023:
  • Goodman Seer Heat Pump System.
  • Senville LETO Series Mini Split Air Conditioner Heat Pump.
  • Cooper & Hunter Sophia Series.
  • Pioneer Diamante Ultra Series.
  • Senville Aura Series.
  • MrCool DIY 4th Gen Series.
  • MRCOOL Ductless Heat Pump.
  • Daikin 17 BTU Mini-Split Heat Pump.
Mar 3, 2023

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