Massachusetts and four other New England states received a $450 million federal grant Monday to “supercharge” efforts to get residents to ditch natural gas or oil heating systems and install electric heat pumps.
To date, the five states have tried on their own to get residents to make the switch. But the grant will allow them to coordinate their efforts, using a new regional program: The New England Heat Pump Accelerator.
The program aims to do three things:
- Boost the local heat pump market by incentivizing heat pump manufacturers and distributors to increase inventory and lower prices
- Make it easier for low- and moderate-income households to install heat pumps
- Establish a central “resource hub” to share data and best practices around heat pump adoption, workforce training and other market metrics they're tracking
“Through the Accelerator, we'll be able to deliver affordable and cutting-edge heating and cooling technologies to families and businesses across New England,” Massachusetts Gov. Maura Healey said in a statement. “This is an opportunity to lower costs, increase comfort, and drive down emissions.”
Buildings in Massachusetts account for about 35% of the state’s annual emissions, making them the second-biggest source of greenhouse gas pollution after the transportation sector. The state's climate plan calls for electrifying 26% of households by 2025 and 38% by 2030, which requires installing 100,000 heat pumps by 2025 and 500,000 by 2030. A report released late last year found Massachusetts is on track to meet the 2025 goal, but will need to significantly ramp up heat pump adoption to meet those end-of-decade numbers.
If the new program is successful, it will “permanently shift the market from fossil fuel equipment to heat pumps,” according to a program summary. More specifically, the states aim for heat pumps to make up at least 65% of all residential HVAC and hot water heating system sales by 2030 — and a whopping 90% of all sales by 2040. These targets are in line with a heat pump pledge Massachusetts and several other states made earlier this year.
Heat pumps use electricity to provide climate-friendly heating and cooling — think of them like an air conditioning unit that can also work in reverse. They’ve been around for a long time, but more recently, the development of systems that work well in cold climates has made it possible for New Englanders to use them.
Though the cold climate heat pump technology is out there, it’s not always easy or affordable for people to buy them or to find contractors to install the equipment. Plus, according to the program summary, many existing HVAC contractors are unaware of the latest technology and still tell customers that heat pumps don’t work well in the winter.
Enter the New England Heat Pump Accelerator. With the influx of federal funding, the program aims to solve many of the issues on the supply side. In addition to training and recruiting new HVAC contractors, the states hope to spur the local heat pump market by offering so-called “midstream incentives” to wholesale distributors.
The plan offers financial incentives to the five big wholesale distributors to both stock more product and sell heat pumps to contractors at lower prices. These cost savings will hopefully get passed down to residents, but at the very least should make contractors more likely to suggest their customers install an electric heat pump or hot water heater.
Residents can still get rebates from state energy efficiency programs like Mass Save and Efficiency Maine.
The program also has a strong equity component to help ensure that low- and moderate-income residents can afford to make the switch to heat pumps. As required by the federal government’s Justice40 initiative, at least 40% of the grant money will be used in disadvantaged communities. Some of it will be for workforce training and community-based heat pump adoption programs, and some of it will go to large multi-year pilot projects designed to address unique problems with scalable solutions —like getting heat pumps into multi-family buildings or mobile homes.
The grant also includes money to set up a “resource hub” to aggregate data, track progress and provide educational resources for contractors and consumers.
Funding for the program comes from the U.S. Environmental Protection Agency’s $4.3 billion Climate Pollution Reduction Grants, which is part of the larger Inflation Reduction Act.
The New England Heat Pump Accelerator was the only grant given to New England states and represents the second largest grant in the program.
On a recent call with reporters, White House officials said the money would be distributed this fall.
