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DECARBONIZING SPACE HEATING WITH AIR SOURCE HEAT PUMPS ● Financial incentives. Consumers often choose furnaces for space heating due to their lower costs, either up front or throughout the lifetime of the appliances. Targeted financial incentives can include subsidies, tax credits, or rebate programs designed to reduce the costs to consumers of ASHPs and thus make them a more attractive alternative to furnaces and boilers. Well-publicized financial incentives can help address informational barriers as well. ● Support for technological improvement. The costs and performance of ASHPs have improved markedly in recent years, and, as described in the previous section, experts believe significant additional improvements can be achieved. Some of these will occur naturally with the acceleration of ASHPs deployments. But other technological improvements will require funding for research and development, which could be carried by the government, the private sector, academia, or partnerships among the groups. ● Procurement in government buildings. Federal, state, and local government buildings represent a meaningful portion of the US building market. As of 2012, governments owned or occupied 19.5 billion square feet of commercial floor space, or 22 percent of the nationwide total, across 776,000 buildings.60 Efforts to install ASHPs in government real estate could increase deployment rates in the near term and lead to technology improvements that can come from increased deployments. ● Changing utility rate structures. Public utility commissions could require utilities to develop new service classifications for homes that use ASHPs and charge these households reduced rates. ● Technology standards that mandate the use of ASHPs. Policies that mandate improved efficiency of appliances typically do not require the use of specific technologies, but a mandate could gradually require that consumers install ASHPs in certain regions and building types. Other available policy tools are not focused on ASHPs or any individual technology but rather on the improved efficiency, electrification, or decarbonization of space heating more broadly. Such technology-neutral policies are often more cost effective than technology- specific policies because they can promote technologies that are best suited to accomplish policy objectives without anyone needing to know in advance what these technologies will be. Examples of space heating decarbonization policy options that will encourage the deployment of ASHPs include the following: ● Energy efficiency programs, incentives and standards. The US Department of Energy establishes standards that require an increasingly stringent level of energy efficiency, including for space heating appliances. Some states have more stringent requirements. In addition, many public utilities offer financial incentives that reward consumers for purchasing energy efficient appliances. Since ASHPs are highly efficient under typical conditions, these policies often encourage ASHP deployments (along with encouraging more efficient furnaces and boilers). ● Carbon pricing programs with stringent emissions targets. Low-carbon prices have 30 | CENTER ON GLOBAL ENERGY POLICY | COLUMBIA SIPAPDF Image | DECARBONIZING SPACE HEATING WITH HEAT PUMPS
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