U.S. programs to electrify space heating are growing

(ACEEE blog, 25 Jun 2020) Across the United States, programs that electrify space heating in homes and buildings — primarily using high-efficiency heat pumps — are growing rapidly. An ACEEE topic brief released today shows that current-year budgets for the 23 programs we reviewed are nearly $110 million, up 70% from the prior year.

These programs are most extensive on the West Coast and in the Northeast, but are beginning in other regions as well. Many of these programs are run by utilities (investor-owned, municipal, and cooperative) but some are run by states, cities, and independent organizations designated by states. While space heating electrification programs are early in their evolution, many are refining their approaches, adjusting incentives, adding components, and piloting complementary approaches.

These programs build on a policy framework in several states (discussed in a recent post) that promotes decarbonizing electricity generation and then using this cleaner electricity to replace fossil fuels where feasible and practical.

In areas with high use of delivered fuels (fuel oil and propane), such as the Northeast, many programs target customers using these fuels, because the economics of electrification in these situations are often better than when displacing natural gas. Likewise, a few programs, such as in California, Connecticut, Illinois, and Michigan, are encouraging all-electric new construction — another market segment with favorable economics.

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ACEEE blog, 25 Jun 2020: U.S. programs to electrify space heating are growing