Clean energy supply chain
Heat pumps need to replace fossil-fired furnaces, boilers and water heaters at an unprecedented pace and scale to cut the carbon emissions from homes and buildings. The U.S. is still far from hitting those targets — but governors of states representing more than half the country have just pledged to push state policies to speed up that transition.
On Thursday, members of the U.S. Climate Alliance, a bipartisan group of 25 states, set a goal of installing 20 million heat pumps by 2030 — a target that will require quadrupling their current pace of installation. The announcement, made at a Climate Week NYC 2023 event in New York City, includes pledges to expand incentives to reduce the cost of switching from oil, gas and electric resistance heating systems, which are far less energy-efficient than heat pumps.
“Heat pumps are available and affordable, not to mention better for the air we breathe,” said Alliance co-chair and founding member Jay Inslee, the Democratic governor of Washington. About 10 percent of U.S. carbon emissions come from burning fossil fuels inside buildings, and that combustion also creates air pollution harmful to human health. An additional 20 percent of U.S.-wide carbon emissions are tied to electricity use by buildings, including a significant portion used for inefficient electric resistance heating.
Heat pumps, which use electricity to move heat in and out of buildings, are about three times more efficient than resistance heaters and fossil-gas-fueled furnaces — and twice as efficient even in the coldest climates.
These advantages, along with existing state and federal incentive programs, have helped speed the adoption of the technology in the U.S.: Heat-pump sales outpaced those of gas furnaces for the first time last year. Still, heat pumps are used in only about 16 percent of about 140 million U.S. homes today, according to nonprofit advocacy group Rewiring America.
That’s largely due to cost and inertia. Heat pumps still cost more than the fossil-fueled and electric resistance systems they’re replacing, and their energy savings take years to pay back those upfront costs. And owners of homes and buildings typically wait for their old heating systems to fail before replacing them, setting what’s known as a “replacement-rate” limit on how quickly heat pumps can gain ground.
Overcoming those obstacles requires a mix of upfront incentives and clever financing structures to pull the long-term efficiency savings into the present. The Inflation Reduction Act created new federal tax credits for heat pumps, as well as rebate and incentive programs that are in the midst of being rolled out at a state-by-state level, aimed at reducing the sticker shock of making the switch.
But state-level incentives, efficiency standards and building codes have been the primary policy pathway for driving heat-pump adoption to date. Many of the states whose governors are members of the U.S. Climate Alliance are already leading in heat-pump adoption, including California, Colorado, Maine, Massachusetts and New York.
Maine, which offers lucrative incentives for heat pumps, has already surpassed its 2025 goal of installing 100,000 heat pump systems, and Governor Janet Mills (D) recently set a new target of 275,000 by 2027. California has set building codes and air-quality regulations that will largely require heat pumps in place of new fossil-gas-fueled furnace and water heater installations starting in 2030, and it offers incentives for heat pumps and heat-pump water heaters.
Other states in the alliance have also imposed regulations that limit fossil fuel use in new buildings, although this doesn’t directly tackle the need to replace fossil fuels in existing buildings. Washington state requires heat pumps in all new homes and apartments, and New York state has banned fossil-gas use in new buildings starting in 2026. More than 50 city and county governments in California have passed similar bans, although the legality of those actions is now in question after a court ruling against the first such ban created by the city of Berkeley.
To achieve the new target, U.S. Climate Alliance members will need to double down on existing state and utility incentives — particularly those focused on lower-income households — and also quickly put forthcoming Inflation Reduction Act incentives to work, according to clean energy think tank RMI. (Canary Media is an independent affiliate of RMI.)
Should the participating states back up their heat-pump pledge with such action, the U.S. will move faster than ever toward the goal of decarbonizing home heating. But for the U.S. to hit its net-zero target by 2050, the entire country must triple today’s heat-pump adoption rates by 2032, according to Rewiring America — not just 25 states.
Jeff St. John is director of news and special projects at Canary Media.