A while back I raved about heating homes with geothermal heat pumps, which can be incredibly energy efficient, generating two or three times as much usable heat as is contained in the electricity they consume. The Northwest Power and Conservation Council identified heat pumps as the second most important source of electricity savings in people’s homes (see page six, here–but be careful, it’s a big .pdf download)—which is one reason why many Northwestern electric utilities offer rebate programs to homeowners who elect to install them.

But apparently some utility conservation managers are skeptical of the heat pump rebates, as discussed in this article in Northwest Current (an online energy-issues newsletter).  They seem to have several objections to the rebates, some of which are fairly reasonable, but one of which shows a flaw in how we treat energy efficiency investments.

  • Among the sensible objections:  the backup heating systems for freezing weather—when some heat pumps don’t perform well—are pretty inefficient; and some customers may take the heat-pump rebate even though they have leaky ductwork that severely compromises the system’s efficiency.

    The flawed objection is this:  some people may be swayed by the rebate to switch from propane furnaces to electric heat pumps.  And that increases, rather than decreases, total electricity consumption—the exact opposite of what the rebate program was designed to accomplish.

    From a utility’s standpoint, I can understand why that’s a legitimate beef.  Energy efficiency rebates are supposed to reduce electricity consumption—thereby avoiding the construction of expensive new power plants.  If the rebate program does the opposite, it’s a double whammy: not only does the utility pay for the rebate, it pays for the new power plant the rebate helped necessitate.

    But from a big-picture environmental standpoint, that objection doesn’t hold much water. Compared with the best heat pumps, propane heaters produce more CO2, and probably more pollution overall.  So switching from propane to a heat pump is probably a net boon for CO2 emissions, even if poses problems for the utility that’s providing the juice.

    The problem here, obviously, is that the rebate programs are managed by utilities—which, understandably enough, are looking out for their own interests.  But those interests may not always line up with the interests of society at large.  A more comprehensive program to limit CO2 emissions—such as the cap-and-trade system envisioned under the soon-to-be-effective Kyoto protocol—could help line up the incentives of those sorts of programs with the larger public interest of keeping climate-warming emissions in check.