Heat pumps are gaining recognition across many parts of the U.S. for their energy efficiency and reduced greenhouse gas emissions compared with other building heating and cooling options. The U.S. Climate Alliance, a bipartisan coalition of 25 governors, recently pledged to increase heat pump installations across their states to reach 20 million by 2030. Currently, the U.S. has about 4.8 million heat pump installations, according to RMI, a clean energy think tank.
Adoption varies from state to state. In Massachusetts, concerns about initial expenses and the intricacies involved in selecting appropriate heat pump equipment have slowed adoption, putting the state behind counterparts like Maine, which has already surpassed its 2025 target of 100,000 heat pumps. Maine Gov. Janet Mills recently established a more ambitious target of reaching 175,000 heat pumps by 2027.
Facilities managers looking to deploy heat pumps in existing buildings have concerns about cost— despite the availability of federal incentives — as well as the significant work and disruption that can come with retrofits.
Physical challenges
The feasibility of retrofitting existing buildings with heat pumps varies from building to building. “It’s certainly a proven technology. [But] just doing a swap-out of your HVAC system for a heat pump system may not be the best strategy,” said Ryan Colker, vice president of innovation at the International Code Council.
Kailash Viswanathan, director of energy at Arch Energy, a subsidiary of Consigli Construction, names two significant challenges: First, building occupancy. The ability to make such a significant renovation in a building is “very much occupant-driven,” Viswanathan said. “If it's a centralized plan, it's easier. But you still have to get into the building. You have to open up walls and change pipes to make it happen. [In most cases], such changes can be made only when occupants are leaving or when there's a turnover of tenants.”
Second is maintaining space heating and water heating temperatures. Heat pumps work best at lower water temperatures, Viswanathan said. Retrofitting heat pumps in existing buildings will involve reducing the water temperature from 180 degrees Fahrenheit to 120 degrees to 140 degrees Fahrenheit, he said. To achieve the same level of heat with lower-temperature water requires a greater flow rate. “That means you need to increase the diameter of the pipes. And that involves getting into an occupant's space and removing and changing the pipes. That's disruptive,” he said. “That's why there are 10- to 12-year plans. It’s not going to happen overnight. And challenging buildings, like historic buildings, will take a longer time to retrofit — about 20 years or so.''
Viswanathan is part of a team retrofitting heat pumps into a high-rise building at 345 Hudson St. in New York City. This inaugural initiative by the New York State Energy Research and Development Authority aims to rapidly electrify one of New York City’s century-old buildings. “We help engineers [and the clients] find solutions and … figure out what the best way [is] to reduce carbon emissions in this building,” he said.
“Facilities managers are always part of the decision-making process,” he added. ”They think about what challenges are involved in operating, maintaining and controlling heat pump technology better. There's a lot of automation that comes with it, and they have to learn that.”
Economic challenges
Another significant barrier: Installing heat pumps in existing buildings is expensive. Estimates from Rosen Consulting Group suggest that the overall cost in 2022 of retrofitting a typical gas-powered office building in New York state with a ground-source heat pump ranges from $17 to $24 per square foot, while the cost for an air-source heat pump would range from $12 to $21 per square foot. Those estimates include heat pump water heaters, necessary infrastructure and electrical upgrades. The report notes that heat pump retrofits in office buildings have the potential to create “significant energy bill savings” on an ongoing basis, although estimates of those savings were predicated upon additional building shell improvements that would incur additional costs. The Inflation Reduction Act makes it possible to obtain federal tax credits and state-administered rebates to offset heat pump purchase and installation costs.
Facilities managers need a clear understanding of the financial costs and benefits of heat pumps, including long-term maintenance factors, to validate their decision to deploy these systems, said Doug Davenport, founder and executive director of Prospect Silicon Valley, a nonprofit cleantech accelerator focused on transportation, energy and infrastructure.
Facilities managers also need more “education and training [on] aggregating and interpreting performance outcomes from real installations to prove that the technology works as reported. [This] is going to be especially true with a wave of new designs coming to market,” Davenport said.
One approach to reduce the cost of a heat pump retrofit is to implement a hybrid system. Geothermal heat pumps with hybrid heat exchange can help building owners and operators reduce capital expenses and bolster the economic feasibility of retrofit projects, the National Renewable Energy Laboratory reported in September. NREL added the ability to analyze such systems to its REopt tool, which aims to help building managers evaluate the mix of renewable energy, conventional energy, storage and GHP technologies they can use to meet their cost, clean energy and resilience goals.
Potential grid challenges
Despite heat pumps’ immediate benefits for decarbonization, when used at scale they can exert more strain on local power grids that may lack the necessary generating capacity to accommodate anticipated building electrification growth. “You can’t just install heat pumps and not fix the grid. What everyone is waiting for is whether the grid is going to green itself,” said Owen Glubiak, vice president of revenue at Cortex Sustainability Intelligence.
Cortex recently rolled out an automation feature to its building decarbonization platform to help clients cut energy use and carbon emissions. Using heat pumps within a demand response-driven scenario can alleviate that strain on the grid, he said. “You see the biggest problems during the warmest and coldest days. So, demand response programs are going to become very important to ensure that you are meeting peak demand,” Glubiak said.
One piece of the decarbonization puzzle
As Glubiak indicates, heat pumps alone are not the be-all and end-all of electrification. The benefits of electrifying buildings will be felt most when facilities managers look at adopting heat pumps as part of a full system that includes solar panels and battery storage systems, said Thomas A. Kwan, Schneider Electric’s sustainability research director.
While deciding whether a heat pump retrofit project makes economic sense or not, ICC’s Colker recommends an in-depth energy audit that can provide comprehensive insights into “where you’re going to get the most bang for your buck and where you’ll get the best climate change impacts.”
Facilities managers looking to upgrade decades-old building systems tend to make decisions that are more pragmatic, said Mark Grinis, who leads digital transformation initiatives for EY Americas’ real estate practice. “If something is broken, let’s fix it properly. But do we want to entertain a very complex retrofit?” he said about how facilities managers typically think through the process. The feasibility of a heat pump retrofit project is also location-dependent in terms of the ability to draw broader groups of tenants and realize higher economic returns, he noted. There may be opportunities to install cool roofs and rooftop solar panels in older buildings, he added, but “I feel like I see heat pumps much more on new builds.”
Heat pumps currently fulfill only around 10% of the worldwide heating demand in buildings, significantly falling short of the deployment necessary to align with 2050 net zero emissions targets, according to the International Energy Agency. It calls for more policy support and technical innovation to boost energy efficiency, reduce upfront purchase and installation costs and remove market barriers to complex retrofits.
