Advancing Electrification of Heating
A Business Leader’s Guide to Reducing Their Carbon Footprint
With Heat Pump TechnologyCONTENTS

Commercial and residential buildings are responsible for 13% of total
greenhouse gas (GHG) emissions in the U.S. alone - primarily due to theTotal U.S. Greenhouse Gas Emissions
by Economic Sector in 2020

fossil fuels burned to generate heat and hot water. While we can’t go

Agriculture
11%

without heat and hot water in most instances, there’s a solution every
business leader should consider to reduce their GHG emissions and drive
progress toward their net zero goals: the electrification of their heating
technologies. Check out the information below to learn more about howelectrification can help you decarbonize your operations.

Commercial &Residential
13%

Transportation
27%

Q The Role of Electrification in Reaching Net Zero....................................... 3
Q Key Trends Driving Heat Pump Adoption.................................................. 4
Q Global Policy Drivers and Incentives for Mass Heat Pump Adoption......... 5

Industry
24%

Electric Power25%

Q Challenges of Widespread Heat Pump Adoption ..................................... 6
Q Future Outlook......................................................................................... 8U.S. Environmental Protection Agency (2022). Inventory of U.S.
Greenhouse Gas Emissions and Sinks: 1990-20202

THE ROLE OF ELECTRIFICATION IN REACHING NET ZERO

Around the world, as the population grows, so too does the demand for energy.
Traditional heating methods for commercial and residential buildings are delivered
through heating technologies that involve burning fossil fuels – heavy emittersof GHG.
Continued widespread use of many traditional residential and commercial heatingsystems, which typically rely on fossil fuels, will not enable countries to meet theiremissions reduction targets as defined in the Paris Agreement, a collection of
long-term goals established at the 2015 UN Climate Change Conference (COP21).
The agreement aims to reduce global GHG emissions across countries, industries
and individual companies as a means to limit the global temperature increase thiscentury to 2°C while pursuing efforts to limit the increase even further to 1.5°.
As homeowners and business leaders alike strive for more sustainable energy
sources and the world looks to limit global warming in alignment with the ParisAgreement, efforts to decarbonize heating technologies are gaining momentum,
resulting in increased investments in more environmentally friendly, electrifiedsolutions.
The electrification of heating decreases the amount of GHG emissions, particularly
when combined with investments in renewable and zero-carbon electricitygeneration. But to make a significant impact, adoption of heating technologies that
rely on electrification – such as heat pumps – must increase significantly. In fact,
to reach net zero by 2050, as called for in the Paris Agreement, The International
Energy Agency (IEA) estimates that the share of clean heat technologies – including
heat pumps, district heating, renewable energy and hydrogen – will need to morethan double to 50% of sales by 2030.

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KEY TRENDS DRIVING HEAT PUMP ADOPTION

As homeowners and business leaders discover the environmental and economic
benefits of heat pump technology, adoption is growing. In 2021, almost 190 million
heat pumps were in operation worldwide, with record growth in heat pump sales
in the United States, China and Europe. However, heat pump use is only at 10%
globally and more than 20% in Europe. Additional growth is expected to continue
due to heightened energy independence goals.
Coupled with the decarbonization trend and worldwide focus on net zero goals is
the shift to more energy-efficient solutions, including heat pump technology. As
the demand for energy increases, it will be critical to ensure systems maximize thevalue out of each unit of energy consumed, in turn reducing their carbon footprint
and saving on energy costs.
To further encourage heat pump adoption, innovation and policy support are vitalfor reducing up-front costs, making renovations easier, improving energy efficiencyand eliminating high-global warming potential (GWP) refrigerants from traditional
air conditioning and heat pump systems.

When it comes toinnovation, heatpump technology
is evolving tomeet the needs ofcolder climates.

In particular, when it comes to innovation, heat pump technology is evolving tomeet the needs of colder climates. Developing cold climate heat pump technology
unlocks an entirely new market for heat pumps. HVAC manufacturers havedeveloped specialized cold climate heat pumps that incorporate advanced designs
to operate with greater capacity and efficiency at low outdoor temperatures.
The U.S. Department of Energy’s residential Cold Climate Heat Pump Technology
Challenge has spurred major original equipment manufacturers (OEMs) to explore
development of heat pump systems that operate with greater capacity andefficiency at low outdoor temperatures.

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GLOBAL POLICY DRIVERS AND INCENTIVES FOR MASS HEAT PUMP ADOPTION

In addition to innovation, legislation and government
incentives that support heat pump adoption are critical.
In most of the world, regulation changes are the core
drivers for both energy efficiency and the transition
to lower-GWP refrigerants. With these regulations,companies and consumers are more incentivized andtypically required to switch technologies at time ofreplacement.
U.S.: The Inflation Reduction Act includes point of salerebates for low- and moderate-income families and tax
credits toward the purchase of higher efficiency heatpumps, designed to increase heat pump adoption in
new and existing homes and buildings. For more details
about incentive programs for heat pumps, visit ourrebate finder tool.
Europe: Through the European Green Deal, Europe
is striving to be the first climate-neutral continent;REPowerEU encourages joint action for more
affordable, secure, and sustainable energy; gaining
energy independence is driving a faster transition
to clean energy.
Asia: The Chinese government launched a five-year
Clean Heating Plan in 2017, with the goal of transitioning
70% of northern households from coal to cleaner heating
options, backed by government incentives to adopt
electric heat pump technology.

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CHALLENGES OF WIDESPREAD HEAT PUMP ADOPTION

Despite the huge growth of heat pumps being used aroundthe globe, there are some challenges that are slowing thespeed of widespread adoption. Performance in colder
climates, installation costs, inconsistent government
policies, and the need for skills training for HVAC
technicians, are all hurdles for mass heat pump adoption.
However, there are solutions to each of these pain points.
Heat Pumps in Harsher Climates
Despite the widespread advancements and use of heatpumps in harsher climates, there is still a perception of heatpump technology not being able to function properly incold climates. Organizations such as the U.S. Departmentof Energy have started initiatives like the Residential Cold
Climate Heat Pump Technology Challenge to incentivize
ongoing efforts of improving ducted heat pumptechnology. These efforts are fighting the stigma of heatpumps not working efficiently in cold climates.
Installation and Operating Costs
Retrofitting heat pumps into existing homes or buildings canbe difficult and require integrations with existing systems
that can be costly. While the infrastructure updates often
needed to add a heat pump can increase upfront costs, awhole-building approach can help owners to realize longterm savings. Additionally, there are several utility andgovernment incentives to help mitigate the higher upfront
costs typically associated with heat pump installation.

6CHALLENGES OF WIDESPREAD HEAT PUMP ADOPTION

Inconsistent Policies and Incentives
Home improvement policy incentives come in a variety offorms, but some inconsistent policies around fuel switchingand dual fuel systems are leading challenges to heat pumpadoption. However, as the U.S. grid continues to use more
renewable resources and technology advancements
are made, especially around heat pumps that operate
efficiently in cold climates, we expect decarbonization
policies to become more unified.
Heat Pump Skills Training and Sales Tools
The HVAC industry is focused on recruitment and trainingof technicians due to labor shortages. Ongoing programs
to support the training and development of nextgeneration skilled tradespeople is key. Training programs
including the National Coalition of Certification Centers(NC3) help arm new technicians with the information theyneed to be successful.
Additionally, HVAC sales teams need to better understandthe advantages that heat pumps offer in terms of energy
savings and efficiencies to sell this solution to theircustomers. Sales tools and materials can help communicate
the advantages, including the recently launched Residential
Heat Pump Rebate Finder, a valuable tool to help customers
find cost-savings from rebates and tax credits for more
efficient, sustainable heat pump systems.

Learn more
about the challenges to widespread heatpump adoption and potential solutions.

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FUTURE OUTLOOKAs global temperatures continue to rise and the world
looks for ways to decarbonize, consumers andcompanies are looking to reduce their carbon footprint
to support a healthier, more sustainable world. Heatpumps are a critical piece of that equation. Through theadoption of heat pump technology worldwide,
consumers and companies can significantly contributeto reducing GHG emissions and drive progress toward
global net zero goals.
Heat pumps have the potential to completely replaceboilers and furnaces across the residential, commercial
and industrial markets, and in every application including
comfort, water heating and light industrial applications.
Electrifying heating through solutions like heat pumps
will cut GHG emissions and improve system efficiency
and long-term affordability. Through industry
stewardship, governmental regulations and incentives,and input from all key stakeholders, transitioning fromfossil fuel burning heating systems to electric heatpumps will make the entire industry and planet much
more sustainable.
Heat pumps are emerging and our industry experts canhelp you reach your company’s sustainability goals.
Connect with an expert to learn more.

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