Governments, utilities, and residents infuse money and technical assistance into building electrification efforts
With over 35 percent of homes throughout Oregon and Washington heating with gas, transitioning the building sector to highly efficient electric heat pumps is a formidable challenge. Fortunately, heat pump incentives at the local, state and federal level are poised to break down one of the biggest barriers to adoption: the expense of these systems. Local and state governments, as well as utilities in Washington and Oregon, have initiated a variety of programs to transition away from gas and put electric heat pumps into homes and commercial buildings. As climate change and extreme weather intensify, efficient electric cooling and heating systems are increasingly critical for both coping with heat waves and reducing greenhouse gas emissions from the buildings sector. Households and businesses in Washington and Oregon can now access rebates, loans, and other incentives to install electric heat pumps.
Nearly every electric utility across Washington and the Energy Trust of Oregon (ETO), which serves Oregon’s 2 million utility customers, is promoting rebates ranging from $100 to $3000 for new heat pump installations. Washington’s largest utility, Puget Sound Energy (PSE), offers a $1500 incentive to convert a residential electric furnace to a heat pump and will likely be extending the offer to households with gas furnaces as well, as part of a tentative settlement agreement in its pending rate case. ETO offers heat pump rebates as high as $3000. A handful of utilities, including Tacoma Power and Clark Public Utilities, are also offering their customers low or zero-interest loans to finance heat pump purchases and installations. Similarly, Portland General Electric and Pacific Power offer on-bill loan repayment and financing to customers who purchase heat pumps.
At the state level, millions of dollars are flowing from state coffers to heat pump programs. In response to the 2021 heat dome –during which at least 100 Oregonians and an estimated 439 Washingtonians died of heat-related illness, often in their own homes–the Oregon legislature passed SB 1536 to bring much-needed heat relief. The new law appropriates $25 million to Oregon’s Department of Energy to stand up new heat pump programs and offer incentives to Oregonians (homeowners and landlords) who install the new equipment. Meanwhile, a state-administered grant program in Washington is aiming to electrify large multi-family and commercial buildings, dispersing $9.7 million in grants through a competitive application process. The Building Electrification Program offers grants for the installation of electric equipment (e.g. heat pumps) and fuel switching (e.g. switching a building’s heat source from gas to electric).
Local governments are innovating new heat pump programs, too. Energized South Coast and Energy Smart Eastside are heat pump group purchasing campaigns for Coos County, Oregon and the large suburban cities of Bellevue, Issaquah, Kirkland, Mercer Island, and Redmond, respectively. Partnering with heat pump wholesalers and community organizations to offer heat pumps at a discounted rate, these programs offer rebates of $500-$2400 for heat pump upgrades. The rebates are available to residents who attend a free, one-hour online workshop. Importantly, these rebates can also be stacked with other incentive programs like utility rebates, state programs, and the federal tax credits for heat pump adoption.
All of the state and local programs targeting heat pump adoption are dwarfed by the funding coming from the recently-passed federal Inflation Reduction Act. Starting in 2023 and available across the country, federal tax credits and state-run grants will offer heat pump rebates of up to $8,000 for low-income households (distributed by state energy offices and tribal governments). Higher income households will qualify for up to $2,000 in tax credits for installing a heat pump.
A tidal wave of electrification is near as heat pump programs make the equipment more affordable for households and natural gas becomes increasingly expensive due to regulation, geopolitical conflicts and consumer attrition. State and local incentives, coupled with the federal funding in the recently-passed Inflation Reduction Act, have the potential to catalyze the adoption of electric heat pumps, a key step to electrifying commercial buildings and homes.