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Time of India
04-07-2025
- Business
- Time of India
Here's what to know about clean energy in Republican megabill headed to Trump
Congress passed a massive tax and spending cuts package Thursday that curbs billions of dollars in spending across clean energy. That means people will be paying a lot more for home solar, energy efficiency and other green technologies - and the nation's efforts to address climate change just got a lot more challenging. The bill that awaits President Donald Trump 's signature supports mining, drilling and production of the oil, coal and gas that are largely driving Earth's warming and the increasingly deadly and costly extreme weather that comes with it. Producing and burning these fossil fuels also contributes to air pollution and human health problems. At the same time, the bill slashes tax credits for clean technologies including wind and solar energy. That will likely mean delay or cancellation of countless projects, affecting thousands of jobs and driving up household energy costs. Here are four things to know about what the bill means for clean energy: Cuts to home energy credits will make updates more costly The climate law passed during former President Joe Biden 's term included tax credits for systems and projects at home - like solar and batteries - that save homeowners money over time and significantly cut greenhouse gas emissions. These systems have gotten cheaper over the years but they're still hefty upfront expenses that some homeowners would struggle to absorb without the credits. An average rooftop solar installation can run $20,000 or more; the credit has covered almost one-third of that. An average heat pump typically costs several thousand dollars; the tax credit reimbursed up to 30% of the cost, or $2,000. The U.S. Treasury Department said more than 2 million families claimed more than $2 billion of the credit for upgrades such as windows, insulation, heating and cooling systems in tax year 2023 returns. More than 1.2 million families claimed more than $6 billion in the credit for solar installations, solar water heating, geothermal heat pumps and battery storage and other improvements that same year. The bill ends both tax credits at the end of this year. "No one asked Congress to make their energy bills even higher," said Steven Nadel , executive director of the American Council for an Energy-Efficient Economy, a nonprofit that advocates for cutting energy waste. "Taking away incentives for energy-saving improvements would raise monthly bills for families and businesses." But Republican lawmakers hailed the measure. Republican Sen. Mike Crapo of Idaho, the chairman of the Senate Finance Committee, said it helps unleash American energy and will save taxpayers money. "Extending good tax policy, delivering targeted relief and reining in wasteful spending is the best way to restore economic prosperity and opportunity for all Americans," he said. Electric vehicle credits disappear The bill eliminates credits of up to $7,500 for buyers of new electric vehicles and up to $4,000 for buyers of used EVs . That's likely to hurt the growth of a technology that is seen as critical to cutting down on a big source of Earth's warming. Transportation is the largest single source of U.S. greenhouse gas emissions - 28% in 2022, according to the Environmental Protection Agency. EV sales have grown steadily, making up about 8% of new car sales in the U.S. last year, according to Biden had set a target for half of all new vehicles sold in the U.S. to be electric by 2030. But that purchase may be harder for consumers to swallow without a credit. EVs sold for an average of $57,734 in May, while new vehicles overall sold at an average of $48,799, according to Kelley Blue Book. The credits go away after Sept. 30. Big wind and solar projects will struggle to qualify for tax credits For large-scale wind and solar, the bill speeds up the timelines projects must meet to qualify for a tax credit. The industry says it will be nearly impossible for many projects to meet those accelerated timelines, putting massive projects from Colorado to Texas to Arizona at risk. The bill allows a full tax credit for wind and solar developments that start construction within a year of the law's enactment. But projects that begin more than a year after the bill's passage have to be operational by the end of 2027 or they won't get a credit. Atlas Public Policy, a policy consultancy, said roughly 28 gigawatts of wind and solar projects are planned to be operational after the start of 2028 but haven't begun construction yet. Under the bill, they're unlikely to qualify for a credit. Wind provides about 10% of the electricity generated in the U.S., according to the U.S. Energy Information Administration, with a goal of 20% by 2030. Solar is at about 4%, with the industry's target at one point to reach 30% by the end of the decade. Clean energy advocates, developers and investors say wind and solar are crucial for the nation's renewables ambitions, and tax credits help to make them viable. But Trump has pulled the U.S. out of the Paris agreement, which calls on signatories to try to keep global temperatures from warming 1.5 degrees Celsius (2.7 degrees Fahrenheit) above pre-industrial times. Instead, the bill supports traditional fossil fuels such as oil, natural gas and coal, as well as nuclear power. Proponents say it will increase reliability since the wind doesn't always blow and the sun doesn't always shine. "Americans need reliable and affordable energy, wasteful spending needs to be cut, and our country needs to be able to build again," said Sen. Shelley Moore Capito , applauding the bill. Experts say watch out for higher energy prices But others say Americans can expect to see higher utility bills. That's unwelcome news at a time when the nation's growth in data centers, driven by demand for artificial intelligence, are sending energy use higher, and when climate change is fueling more frequent extreme weather. Nonpartisan and energy groups estimate the bill's passage could increase average annual electricity costs by more than $100 per household by next year. If fewer solar and wind projects are added to the grid because there is less incentive and it is too expensive for developers to do so without credits, some states could see increases of more than $200. "At a time when energy demand is surging and families are already struggling to make ends meet, this bill would raise costs, make the grid less reliable, and make the U.S. more dependent on foreign oil," said Lori Lodes , executive director of climate action advocacy group Climate Power. "It threatens our power supply just as extreme weather and record demand are putting historic strain on the grid, forcing brownouts and blackouts across the country." The loss of tax credits might not immediately impact project plans. But increased uncertainty makes it more difficult to invest in innovative new technologies and maintain national security. ___ Alexa St. John is an Associated Press climate reporter. Follow her on X: @alexa_stjohn. Reach her at ___ Read more of AP's climate coverage at ___ The Associated Press' climate and environmental coverage receives financial support from multiple private foundations. is solely responsible for all content. Find AP's standards for working with philanthropies, a list of supporters and funded coverage areas at
Winnipeg Free Press
03-07-2025
- Business
- Winnipeg Free Press
Here's what to know about clean energy in Republican megabill headed to Trump
Congress passed a massive tax and spending cuts package Thursday that curbs billions of dollars in spending across clean energy. That means people will be paying a lot more for home solar, energy efficiency and other green technologies — and the nation's efforts to address climate change just got a lot more challenging. The bill supports mining, drilling and production of the oil, coal and gas that are largely driving Earth's warming and the increasingly deadly and costly extreme weather that comes with it. Producing and burning these fossil fuels also contributes to air pollution and human health problems. At the same time, the bill slashes tax credits for clean technologies including wind and solar energy. That will likely mean delay or cancellation of countless projects, affecting thousands of jobs and driving up household energy costs. Here are four things to know about what the bill means for clean energy: Cuts to home energy credits will make updates more costly The climate law passed during former President Joe Biden's term included tax credits for systems and projects at home — like solar and batteries — that save homeowners money over time and significantly cut greenhouse gas emissions. These systems have gotten cheaper over the years but they're still hefty upfront expenses that some homeowners would struggle to absorb without the credits. An average rooftop solar installation can run $20,000 or more; the credit has covered almost one-third of that. An average heat pump typically costs several thousand dollars; the tax credit reimbursed up to 30% of the cost, or $2,000. The U.S. Treasury Department said more than 2 million families claimed more than $2 billion of the credit for upgrades such as windows, insulation, heating and cooling systems in tax year 2023 returns. More than 1.2 million families claimed more than $6 billion in the credit for solar installations, solar water heating, geothermal heat pumps and battery storage and other improvements that same year. The bill ends both tax credits at the end of this year. 'No one asked Congress to make their energy bills even higher,' said Steven Nadel, executive director of the American Council for an Energy-Efficient Economy, a nonprofit that advocates for cutting energy waste. 'Taking away incentives for energy-saving improvements would raise monthly bills for families and businesses.' But Republican lawmakers hailed the measure. Republican Sen. Mike Crapo of Idaho, the chairman of the Senate Finance Committee, said it helps unleash American energy and will save taxpayers money. 'Extending good tax policy, delivering targeted relief and reining in wasteful spending is the best way to restore economic prosperity and opportunity for all Americans,' he said. Electric vehicl e credits disappear The bill eliminates credits of up to $7,500 for buyers of new electric vehicles and up to $4,000 for buyers of used EVs. That's likely to hurt the growth of a technology that is seen as critical to cutting down on a big source of Earth's warming. Transportation is the largest single source of U.S. greenhouse gas emissions — 28% in 2022, according to the Environmental Protection Agency. EV sales have grown steadily, making up about 8% of new car sales in the U.S. last year, according to Biden had set a target for half of all new vehicles sold in the U.S. to be electric by 2030. But that purchase may be harder for consumers to swallow without a credit. EVs sold for an average of $57,734 in May, while new vehicles overall sold at an average of $48,799, according to Kelley Blue Book. The credits go away after Sept. 30. Big wind and solar projects will struggle to qualify for tax credits For large-scale wind and solar, the bill speeds up the timelines projects must meet to qualify for a tax credit. The industry says it will be nearly impossible for many projects to meet those accelerated timelines, putting massive projects from Colorado to Texas to Arizona at risk. The bill allows a full tax credit for wind and solar developments that start construction within a year of the law's enactment. But projects that begin more than a year after the bill's passage have to be operational by the end of 2027 or they won't get a credit. Atlas Public Policy, a policy consultancy, said roughly 28 gigawatts of wind and solar projects are planned to be operational after the start of 2028 but haven't begun construction yet. Under the bill, they're unlikely to qualify for a credit. Wind provides about 10% of the electricity generated in the U.S., according to the U.S. Energy Information Administration, with a goal of 20% by 2030. Solar is at about 4%, with the industry's target at one point to reach 30% by the end of the decade. Clean energy advocates, developers and investors say wind and solar are crucial for the nation's renewables ambitions, and tax credits help to make them viable. But Trump has pulled the U.S. out of the Paris agreement, which calls on signatories to try to keep global temperatures from warming 1.5 degrees Celsius (2.7 degrees Fahrenheit) above pre-industrial times. Instead, the bill supports traditional fossil fuels such as oil, natural gas and coal, as well as nuclear power. Proponents say it will increase reliability since the wind doesn't always blow and the sun doesn't always shine. 'Americans need reliable and affordable energy, wasteful spending needs to be cut, and our country needs to be able to build again,' said Sen. Shelley Moore Capito, applauding the bill. Experts say watch out for higher energy prices But others say Americans can expect to see higher utility bills. That's unwelcome news at a time when the nation's growth in data centers, driven by demand for artificial intelligence, are sending energy use higher, and when climate change is fueling more frequent extreme weather. Nonpartisan and energy groups estimate the bill's passage could increase average annual electricity costs by more than $100 per household by next year. If fewer solar and wind projects are added to the grid because there is less incentive and it is too expensive for developers to do so without credits, some states could see increases of more than $200. 'At a time when energy demand is surging and families are already struggling to make ends meet, this bill would raise costs, make the grid less reliable, and make the U.S. more dependent on foreign oil,' said Lori Lodes, executive director of climate action advocacy group Climate Power. 'It threatens our power supply just as extreme weather and record demand are putting historic strain on the grid, forcing brownouts and blackouts across the country.' The loss of tax credits might not immediately impact project plans. But increased uncertainty makes it more difficult to invest in innovative new technologies and maintain national security. ___ Wednesdays Columnist Jen Zoratti looks at what's next in arts, life and pop culture. Alexa St. John is an Associated Press climate reporter. Follow her on X: @alexa_stjohn. Reach her at ___ Read more of AP's climate coverage at ___ The Associated Press' climate and environmental coverage receives financial support from multiple private foundations. AP is solely responsible for all content. Find AP's standards for working with philanthropies, a list of supporters and funded coverage areas at
San Francisco Chronicle
03-07-2025
- Business
- San Francisco Chronicle
Here's what to know about clean energy in Republican megabill headed to Trump
Congress passed a massive tax and spending cuts package Thursday that curbs billions of dollars in spending across clean energy. That means people will be paying a lot more for home solar, energy efficiency and other green technologies — and the nation's efforts to address climate change just got a lot more challenging. The bill supports mining, drilling and production of the oil, coal and gas that are largely driving Earth's warming and the increasingly deadly and costly extreme weather that comes with it. Producing and burning these fossil fuels also contributes to air pollution and human health problems. At the same time, the bill slashes tax credits for clean technologies including wind and solar energy. That will likely mean delay or cancellation of countless projects, affecting thousands of jobs and driving up household energy costs. Cuts to home energy credits will make updates more costly The climate law passed during former President Joe Biden's term included tax credits for systems and projects at home — like solar and batteries — that save homeowners money over time and significantly cut greenhouse gas emissions. These systems have gotten cheaper over the years but they're still hefty upfront expenses that some homeowners would struggle to absorb without the credits. An average rooftop solar installation can run $20,000 or more; the credit has covered almost one-third of that. An average heat pump typically costs several thousand dollars; the tax credit reimbursed up to 30% of the cost, or $2,000. The U.S. Treasury Department said more than 2 million families claimed more than $2 billion of the credit for upgrades such as windows, insulation, heating and cooling systems in tax year 2023 returns. More than 1.2 million families claimed more than $6 billion in the credit for solar installations, solar water heating, geothermal heat pumps and battery storage and other improvements that same year. The bill ends both tax credits at the end of this year. 'No one asked Congress to make their energy bills even higher,' said Steven Nadel, executive director of the American Council for an Energy-Efficient Economy, a nonprofit that advocates for cutting energy waste. 'Taking away incentives for energy-saving improvements would raise monthly bills for families and businesses.' But Republican lawmakers hailed the measure. Republican Sen. Mike Crapo of Idaho, the chairman of the Senate Finance Committee, said it helps unleash American energy and will save taxpayers money. 'Extending good tax policy, delivering targeted relief and reining in wasteful spending is the best way to restore economic prosperity and opportunity for all Americans," he said. Electric vehicl e credits disappear The bill eliminates credits of up to $7,500 for buyers of new electric vehicles and up to $4,000 for buyers of used EVs. That's likely to hurt the growth of a technology that is seen as critical to cutting down on a big source of Earth's warming. Transportation is the largest single source of U.S. greenhouse gas emissions — 28% in 2022, according to the Environmental Protection Agency. EV sales have grown steadily, making up about 8% of new car sales in the U.S. last year, according to Biden had set a target for half of all new vehicles sold in the U.S. to be electric by 2030. But that purchase may be harder for consumers to swallow without a credit. EVs sold for an average of $57,734 in May, while new vehicles overall sold at an average of $48,799, according to Kelley Blue Book. The credits go away after Sept. 30. Big wind and solar projects will struggle to qualify for tax credits For large-scale wind and solar, the bill speeds up the timelines projects must meet to qualify for a tax credit. The industry says it will be nearly impossible for many projects to meet those accelerated timelines, putting massive projects from Colorado to Texas to Arizona at risk. The bill allows a full tax credit for wind and solar developments that start construction within a year of the law's enactment. But projects that begin more than a year after the bill's passage have to be operational by the end of 2027 or they won't get a credit. Atlas Public Policy, a policy consultancy, said roughly 28 gigawatts of wind and solar projects are planned to be operational after the start of 2028 but haven't begun construction yet. Under the bill, they're unlikely to qualify for a credit. Wind provides about 10% of the electricity generated in the U.S., according to the U.S. Energy Information Administration, with a goal of 20% by 2030. Solar is at about 4%, with the industry's target at one point to reach 30% by the end of the decade. Clean energy advocates, developers and investors say wind and solar are crucial for the nation's renewables ambitions, and tax credits help to make them viable. But Trump has pulled the U.S. out of the Paris agreement, which calls on signatories to try to keep global temperatures from warming 1.5 degrees Celsius (2.7 degrees Fahrenheit) above pre-industrial times. Instead, the bill supports traditional fossil fuels such as oil, natural gas and coal, as well as nuclear power. Proponents say it will increase reliability since the wind doesn't always blow and the sun doesn't always shine. 'Americans need reliable and affordable energy, wasteful spending needs to be cut, and our country needs to be able to build again,' said Sen. Shelley Moore Capito, applauding the bill. Experts say watch out for higher energy prices But others say Americans can expect to see higher utility bills. That's unwelcome news at a time when the nation's growth in data centers, driven by demand for artificial intelligence, are sending energy use higher, and when climate change is fueling more frequent extreme weather. Nonpartisan and energy groups estimate the bill's passage could increase average annual electricity costs by more than $100 per household by next year. If fewer solar and wind projects are added to the grid because there is less incentive and it is too expensive for developers to do so without credits, some states could see increases of more than $200. 'At a time when energy demand is surging and families are already struggling to make ends meet, this bill would raise costs, make the grid less reliable, and make the U.S. more dependent on foreign oil," said Lori Lodes, executive director of climate action advocacy group Climate Power. "It threatens our power supply just as extreme weather and record demand are putting historic strain on the grid, forcing brownouts and blackouts across the country.' The loss of tax credits might not immediately impact project plans. But increased uncertainty makes it more difficult to invest in innovative new technologies and maintain national security. ___ Alexa St. John is an Associated Press climate reporter. Follow her on X: @alexa_stjohn. Reach her at ___ ___
Yahoo
11-03-2025
- Business
- Yahoo
How closing the ‘spark gap' can boost heat pump adoption
For most U.S. homes, heat pumps are a no-brainer: They can lower energy bills and eventually pay for themselves all while slashing carbon emissions. But the economics don't work in favor of heat pumps for every home — and particularly not for those in states that have high electricity prices relative to those of fossil gas. Adjusting the structure of customer electricity rates could turn the tables, according to a report out today from the nonprofit American Council for an Energy-Efficient Economy, or ACEEE. The ratio of average electricity prices to gas prices (both measured in dollars per kilowatt-hour) is known as the 'spark gap' — and it's one of the biggest hurdles to nationwide electrification. A heat pump that is two to three times as efficient as a gas furnace can cancel out a spark gap of two to three, ensuring energy bills don't rise with the switch to electric heat. But in some states, the gulf is so big that heat pumps can't close it under the existing rate structures. Worse, heat pump performance can decrease significantly when it's extremely cold (like below 5 degrees Fahrenheit), so without incentives, the economic case is harder in states with both harsh winters and electricity that's much more expensive than gas, like Connecticut and Minnesota. In these places, heat pump adoption is 'hit by double whammy,' said Matt Malinowski, ACEEE buildings director. The weather might be hard to change, but the spark gap is malleable: Utilities, regulators, and policymakers can shape electricity rates. By modeling rates for four large utilities in different cold-climate states, ACEEE found that particular structures can keep energy bills from rising for residents who switch to heat pumps, without causing others' bills to go up. Flat electricity rates are a common practice. They're also the worst structure for heat pumps, Malinowski said. When utilities charge the same per-kilowatt-hour rates at all hours of the day, they ignore the fact that it costs more to produce and deliver electricity during certain hours. That's because, like a water pipe, the power grid needs to be sized for the maximum flow of electrons — even if that peak is brief. Meeting it requires the construction and operation of expensive grid infrastructure. Flat rates spread the cost of these peaks evenly across the day rather than charging customers more during the high-demand hours that cause a disproportionate amount of grid costs. But heat pumps aren't typically driving peak demand — at least, not for now while their numbers are low. Demand usually maxes out in the afternoon to evening, when people arrive home from work, cook, do laundry, and watch TV. Households with heat pumps actually use more of their electricity during off-peak hours, like just before dawn when it's coldest, than customers with gas, oil, or propane heaters. Heat pumps 'provide the utility a lot of revenue, and they do that at a time when there isn't that much electricity consumption,' Malinowski said. Under a flat-rate design, cold-climate heat pump owners 'are basically overpaying,' he added. 'Adjusting the rates to better reflect their load on the system — and the benefits to the system that they provide — is only fair.' A rate design that bases charges on when electricity is used would help course-correct. Known as 'time-of-use,' this structure charges more for power consumed during periods of peak demand and less for power consumed at other times, or 'off-peak,' coinciding with heat pumps' prime time. Utility ComEd serving the Chicago area is working to finalize time-of-use rates for households, joining the ranks of several other U.S. providers that already offer this structure, like Xcel Energy in Colorado, Pacific Gas and Electric in California, and Eversource in Connecticut. Demand-based rates are another way of accounting for a customer's peak demand profile and can help reduce a heat pump owner's energy bills. This approach tacks on fees scaled to a customer's peak demand that month. If it's 3 kilowatts, and the demand charge is $10 per kilowatt, the fee will be $30. But importantly, this structure also lowers the rates charged for the total volume of electricity. Even though households switching from gas to heat pumps under such a program would see higher charges for peak demand than before, Malinowski said 'they'll be using so much more electricity overall that they end up benefiting much more from that lower volumetric [per-kilowatt-hour] charge.' As a result, their energy bills can be lower than with a flat-rate program, the report finds. Winter discounts also help heat pumps make financial sense. In most states, electricity usage waxes in the summer — when people blast their air conditioners — and wanes in the winter, when many residents switch to fossil-fuel heating. Some utilities offer reduced electricity prices in winter to drum up business, a structure that benefits households who heat their homes with electrons. Xcel in Minnesota drops its June-through-September summer rate of 13 cents per kilowatt-hour to 11 cents per kilowatt-hour during the rest of the year for all customers. For those with electric space heating, including heat pumps, the rate is lower still: 8 cents per kilowatt-hour — a discount of 39% from the summer rate. According to ACEEE's modeling, the winter discount alone can save Minnesota Xcel customers in single-family homes on average more than $350 annually once they swap a gas furnace for a heat pump. Combining the winter discount with existing time-of-use rates or simulated demand-charge rates (given in the study) can further reduce annual bills by another $70. In Colorado, another state ACEEE analyzed, Xcel provides both time-of-use rates and a much shallower winter discount of about 10%. Even taken together these structures aren't enough to close the spark gap for heat pumps. Pairing that discount with demand-based rates wouldn't do the trick either, the team found. Only when they used the much steeper discount that Xcel deploys in Minnesota were they able to keep customers' modeled heating bills from climbing when they switched to heat pumps. One more option for utilities and regulators: discounts specifically for customers with heat pumps. More than 80 utilities in the U.S. currently offer discounted electric heating rates, with 12 providing them specifically for households with heat pumps, according to a February roundup by climate think tank RMI. Massachusetts regulators approved a plan by utility Unitil last June to offer a wintertime heat-pump discount — the first in the state — and directed National Grid to develop one, too. Unitil's discount amounts to at least 20% off the regular per-kilowatt-hour rate, depending on the plan customers choose. Colorado policymakers are also requiring investor-owned utilities to propose heat pump rates by August 2027. The takeaway from ACEEE's results is that in some states, the above rate designs could be promising avenues to ensure switching to heat pumps doesn't raise energy bills for most single-family households. But in other cases, additional policy might be needed. Connecticut's electricity prices are so high that these rate structures weren't enough to close the spark gap, the authors found. They recommend policymakers consider broader changes like putting a price on carbon emissions, implementing clean-heat standards that require utilities to take steps toward decarbonized heating, or investing in grid maintenance and upgrades to make electricity more affordable — for all customers.
Yahoo
04-03-2025
- Business
- Yahoo
This map shows where to swap out industrial boilers for heat pumps
U.S. manufacturers rely on more than 30,000 small industrial boilers to make a large number of things: foods, drinks, paper, chemicals, clothes, electronics, furniture, transportation equipment, and more. The vast majority of these smaller boilers burn fossil fuels — mostly gas, but sometimes coal or oil. Their emissions contribute not only to climate change but to smoggy skies and elevated asthma rates, too. Swapping out such boilers for electric industrial heat pumps would be a quick win for communities and regulators looking to improve air quality, said Hellen Chen, industry research analyst at the nonprofit American Council for an Energy-Efficient Economy, or ACEEE. Only about 5% of process heat in industry currently comes from electricity, but industrial heat pumps are gaining some momentum. They've already been installed in at least 13 American factories, helping reduce pollution from brewing beer, pasteurizing milk, and drying lumber. Kraft Heinz, the famed ketchup and mac-and-cheese maker, plans to install heat pumps at 10 factories by 2030. Oat-milk producer Oatly is considering one at a New Jersey plant. And policymakers in Southern California passed a rule last summer to phase out industrial boilers, a move that will likely boost heat-pump replacements. Industrial boilers spew a panoply of air pollutants as byproducts of combustion, including nitrogen oxides, or NOx. NOx is harmful in itself but also contributes to the formation of ozone, a key ingredient of smog that can inflame airways and cause a range of respiratory problems, especially in children whose lungs are still developing. To identify opportunities to clean up air quality, Chen and ACEEE colleagues recently mapped areas where ozone levels exceed the U.S. Environmental Protection Agency standard, the number of small industrial boilers in each area, and the fuel they use. In total, they found that more than 5,400 boilers currently burn in 174 counties. The team focused on smaller industrial boilers, defined as having capacities up to 50 million British thermal units per hour, because their emissions are often overlooked, yet the equipment is the easiest to switch out for heat pumps, Chen said. 'In areas where the baseline community pollution burden is already high, there is a really important opportunity,' Chen said. Heat pumps are 'a cleaner and more efficient technology that is ready for adoption today.' Depending on the boiler size, fuel type, and other aspects, the reduction in onsite NOx emissions from swapping just one industrial boiler for a heat pump is equivalent to taking 400 to 10,000 cars off the road, by Chen's calculation. The industrial emissions reductions would add up. Some counties host large stocks of these smaller boilers: Cook County, Illinois, has 297; Philadelphia County, 127; Harris County, Texas, 123; and Los Angeles County, 111, per the ACEEE map. Heat pumps are available now for low-temperature industrial processes, making them well-suited to industries like food and beverage manufacturing, which relies almost exclusively on heat below 266 degrees Fahrenheit (130 degrees Celsius). Low-temperature heat also plays a significant role in areas like chemicals and paper production. Industrial heat pumps, which were first developed in the 1980s, are wildly energy efficient and can use just one-third to a quarter as much energy as boilers. Depending on the relative prices of gas and electricity, that superior efficiency can deliver lower operating costs. Heat pumps can also improve product quality by providing more precise temperature control. Back in 2003, the Department of Energy found that heat pumps produce higher-quality dried lumber. Plus, heat pumps can have a smaller physical footprint than boilers with similar capacities since they don't store fuel, making them advantageous for facilities with limited floor space. Since they're modular, they can be installed in parallel to meet heat demands as needed, Chen said. Added up, these and other co-benefits can save facilities another 20% to 30% on top of reduced energy costs. The major impediment to switching out combustion boilers, which can last 20 to 40 years or more, is the upfront cost. The payback period for an industrial heat pump retrofit is typically on the high side — between five and seven years, Chen said. 'Unfortunately, many companies are looking for very short ROIs [returns on investment] of under three years,' Chen said, making the business case difficult even if the lifetime savings are great. In new facilities, heat pumps can cost the same as gas boilers to install, she noted. Policy support can make it more logical for a business to take on these upfront costs. At least one air quality regulator is beginning to push industries to decarbonize. Last year, California's South Coast Air Quality Management District passed a first-in-the-nation measure that aims to gradually phase out NOx emissions from 2026 to 2033 from more than 1 million large water heaters, boilers with capacities of up to 2 million British thermal units per hour, and process heaters in the area, which will necessitate the switch to electric tech. Chen hopes to see more regulators follow the district's lead as well as tackle what is to her the biggest hurdle to electrification in the U.S.: the relatively high cost of electricity compared with gas, known as the 'spark gap.' The spark gap, the ratio of average electricity price to fossil-gas price (each in dollars per kilowatt-hour), varies from state to state. A ratio of less than about three to four typically makes switching to a heat pump more economically feasible without additional policy support because industrial heat pumps are about three to four times as efficient as gas boilers and thus can lower operating costs, Chen noted. Electric utilities and regulators could redesign rates to make the electric equipment more attractive. The idea has precedent for home heat pumps, though hasn't been realized for industrial ones yet, as far as Chen's aware. State and federal programs are also helping to defray the capital costs of electrifying. California provides $100 million for electric upgrades at factories through the Industrial Decarbonization and Improvement of Grid Operations program. Colorado offers competitive tax credits — up to $168 million in total — for industrial facilities to install improvements that reduce greenhouse gases. Under the Biden administration, about $500 million was granted to Kraft Heinz and others for projects cleaning up emissions from process heat, part of a $6 billion windfall for industrial-decarbonization demonstration projects. But the fate of the awards is unclear as the sweeping federal funding freeze ordered by President Donald Trump in January has, so far, failed to fully thaw. With momentum growing for zero-emissions equipment like heat pumps, 'we're hoping that … more facilities will see them as a viable technology that's ready to go,' Chen said, and that companies 'will be more confident about applying this technology within their own facilities.'
