Heat electrification in commercial buildings can cut emissions by 44%

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A new report released by the American Council for an Energy-Efficient Economy (ACEEE) states that replacing gas-burning heating systems in commercial buildings with efficient electrified heat-pumps could reduce these buildings’ total greenhouse gas emissions by 44%.

The conversions would help enable the buildings to ultimately become “zero-carbon” as the electric grid moves toward renewable energy sources.

ACEEE found that about 27% of commercial floor space heated with fossil fuel systems can be electrified today with a simple payback of less than 10 years.

If policymakers enacted a package of public investments, incentives, and carbon pricing policies, the proportion of commercial building space that can be electrified with this payback would increase to 60%.

However, policymakers will need to act to spur a widespread shift to heat pumps.

The report says that the economic case for upgrading to heat pumps can improve for building owners if:

  • Policymakers improve incentives and institute a fee on greenhouse gas emissions
  • Building owners institute other energy efficiency measures to reduce heating load at the same time as installing heat pumps
  • Policymakers invest in research and development that could reduce the initial cost of heat pumps.

The report also recommends that policymakers encourage or require building owners to get a heat pump bid whenever an existing fossil fuel heating system needs to be replaced.

Even with the proposed policy support and incentives, electrifying space heating in some types of buildings, such as those with complex heating, ventilation, and air-conditioning systems or in cold climates, may still prove challenging.

The report says that for many buildings, a viable strategy in many cases may be to electrify most of the heating load but continue to have a fuel-based backup for use on very cold days.

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ACEEE found that buildings with the shortest paybacks are more likely to be located in the southern United States and the Pacific region, where space-heating needs are modest, and in building types across the country that often have medium-to-long operating hours, such as healthcare, food, retail, and offices.

The release of the report comes at a time buildings are accounting for nearly one-third of greenhouse gas emissions in the US, both from fuel-burning on-site and the emissions from power plants serving the buildings.

Steven Nadel, ACEEE executive director and co-author of the report, said: “Ultimately, we’re going to need to upgrade most building heating systems to electric heat pumps, running on renewable energy, to get to zero emissions.

“Heat pumps use less energy and reduce building operating costs, but the upgrade is often a tough sell for building owners when payback periods are long. Policymakers are going to need to make major investments in incentivising the technology to get it adopted widely.”

The report is available for download.