New York opens up competition to develop heat pumps for big buildings

New York has a new plan to tackle fossil-fuel emissions from its hundreds of thousands of big apartment buildings: a competition. 

Last month, state agencies announced an offer of $10 million for manufacturers to create prototypes of cold-rated, energy-efficient heat pumps for multifamily and other large buildings.

Heat pumps already work well in smaller structures like single-family homes. But for large, older apartment buildings, few models are available that can easily replace existing heating and cooling systems without costly retrofits and operate efficiently in sub-zero temperatures.

New York’s latest Clean Heat for All contest aims to spark the technological innovation needed to overcome that challenge. Participating heating and cooling manufacturers will develop packaged terminal heat pumps for large buildings that can replace packaged terminal air conditioners, a type of cooling unit typically installed through the wall below a window.

Hundreds of thousands of such air conditioners already exist in multifamily buildings across New York. Swapping out these ​“notoriously inefficient” units would not only provide residents with better air conditioning but ​“render a building’s gas or electric heating systems unnecessary,” according to a state report on building electrification. It also helps avoid expensive building or electrical upgrades, making the transition to heat pumps more seamless.

“Investing in solutions that can easily replace older, less efficient units will reduce costs for building upgrades and can provide energy savings to consumers while lowering building emissions,” said New York Governor Kathy Hochul in a statement.

The program will also provide funding for yearlong field demonstrations of new heat pump models in multifamily buildings and hotels. Applicants have until Feb. 20, 2025, to submit proposals. The announcement builds on previous competitions launched by the state, including an industry challenge to develop cold-climate window-unit heat pumps in 2021 and another to advance centralized heat pump heating systems last year.

Buildings are New York’s biggest climate problem, accounting for about one-third of statewide greenhouse gas emissions, mostly from the burning of oil and gas for heating. Compared with other states, New York’s buildings are also on average much older, meaning that any effort to decarbonize them often ends up requiring expensive upgrades.

For New York to hit its ambitious climate targets — especially its goal to reduce carbon emissions by 40 percent by 2030 — it must figure out how to address fossil-fuel use in large, older buildings while minimizing costs. In New York City, Local Law 97 requires buildings over 25,000 square feet to reduce their greenhouse gas emissions as of this year — heat pumps represent one way that property owners can comply with the law.

But there are obstacles to using existing heat pump technologies for retrofits, particularly in cold climates, said Alexi Miller, director of building innovation at the New Buildings Institute, a group that researches energy performance in commercial buildings.

The first is the need for more effective refrigerants, the substance used to absorb heat from outside air. To work well in cold conditions, air-source heat pumps need refrigerants that can efficiently transfer heat even at sub-zero temperatures. Then there’s the condensation produced by heat pumps, which can end up freezing over during the winter, causing ice blockages and other problems. Miller noted that some window-unit heat pumps use atomizers to spray condensate into the air.

Finally, many large-building heat pump models require some kind of backup electric resistance heating to kick in if they lose efficiency in extremely cold conditions, Miller said. That could present technical challenges if the building requires electrical upgrades to accommodate that heating.

Competitions like New York’s can help spur much-needed innovation by using public dollars to incentivize companies, Miller said.

The practice has a long history in New York: In the late 1990s, the New York City Housing Authority committed to buying 20,000 refrigerators from any manufacturer that produced a more energy-efficient model. In 2021, NYCHA made a similar commitment to purchase 24,000 heat pumps from the winner of the state’s window-unit heat pump competition. And in July, state agencies approved a 10,000-stove order from induction stove startup Copper to switch from gas to electric cooking in New York City’s public housing.

The state’s latest investment in packaged terminal heat pumps marks another step toward building a market for more efficient appliances in New York and beyond, Miller said.

“They have the scale to say to industry: It’s going to be worthwhile to make these products and make them highly efficient,” he said. ​“Their commitment has made a difference in the past, and I think it’s going to help again.”