Heat Pumps Outsold Furnaces for the Second Year in a Row
And more funding is on the way.
It’s official: In 2023, for the second year in a row, heat pumps — highly efficient, electric space heaters — were more popular than natural gas furnaces.
That’s according to the most recent data from the Air-Conditioning, Heating, and Refrigeration Institute, a trade association for appliance manufacturers that publishes shipment data for heating and cooling equipment every month.
Though the number of shipments in the data is technically defined as “when a unit transfers ownership,” it is a rough analog for sales. AHRI’s count for 2023, published Friday, showed that even as overall shipments were down in 2023, 21% more heat pumps were shipped than gas furnaces, up from a 12% lead in 2022.
Climate experts see heat pump adoption as a key pillar for getting the country off fossil fuels and halting global warming. It’s one of the most effective choices an individual can make to reduce emissions — even today, when the electric grid is still largely powered by fossil fuels. One recent study by University of California, Davis, researchers looked at the emissions savings of switching from a gas furnace to a heat pump in 99 cities around the country. It found that homeowners would likely cut their carbon footprint between 13% and 81%, depending on where they lived.
The new shipment data may be an indicator that state and federal policies designed to convince homeowners and developers to make the switch are working. A number of states offer subsidies for heat pumps. Starting last year, thanks to the Inflation Reduction Act, the federal government also began offering a $2,000 tax credit for heat pumps.
What this data does not tell us is how many of these shipments were for new buildings and how many were for retrofits. According to the most recent government data, some 60% of existing homes are heated by fossil fuels. But while heat pumps are often a more economic choice when they are integrated into a new building from the start, installing them in an existing building that has a natural gas furnace or boiler is a much more expensive and complicated endeavor.
A number of states — especially those in colder climates — are working on additional policies and incentives to solve this. Earlier this week, environmental protection officials from Massachusetts, California, Colorado, Maine, Maryland, New Jersey, New York, Oregon and Rhode Island signed a non-binding agreement to have heat pumps make up 65% of their residential heating equipment sales by 2030, and 90% by 2040.
It’s an ambitious set of goals. Emily Levin, a senior policy advisor at the Northeast States for Coordinated Air Use Management, an association of air quality agencies, told WBUR that heat pumps currently make up only about 25% of heating equipment sales in the nine participating states. As part of the commitment, the states agreed to develop an action plan within the next year outlining policies and other strategies to achieve the goals.
Additional funding is also on the way. Later this year, the Department of Energy will distribute funds from the IRA to states to create new or expand existing rebate programs for electric appliances. Electrification advocates are also eyeing other grant programs in the law, like the $27 billion Greenhouse Gas Reduction Fund, to develop additional ways to help homeowners pay for the switch.