US Senate Bill Proposes to Incentivize Heat Pump Production
Some interesting proposed legislation was recently introduced in the US Senate as Senate Bill 4139, dubbed the “Heating Efficiency and Affordability through Tax Relief Act” or the “HEATR Act.”
Sponsored by Senator Amy Klobuchar (D-MN) and supported by Senators Tina Smith (D-MN), John Hickenlooper (D-CO), Sheldon Whitehouse (D-RI), Patrick Leahy (D-VT), Jeff Merkley (D-OR) and Cory Booker (D-NJ) the bill includes a key provision that creates significant financial incentives to manufacturers to convert their whole supply of traditional central air conditioners into heat pumps, capable of both heating and cooling homes and buildings. The bill has the potential to transform the North American HVAC marketplace.
While the market has been slowly moving in this direction anyway, reports show that nearly four million heat pumps were sold in the U.S. last year but six million central AC units were sold in the same period. The U.S. Energy Information Administration projects that, based on current trends, sales of central ACs will still outnumber heat pumps in 2050. According to a recent article by Alexander Gard-Murray and Nate Adams, advocating for more climate-friendly solutions, this market inertia comes with real costs. Because HVAC systems can last 15 to 20 years, when a homeowner installs a new central AC, the chance of electrifying their heating before 2040 drops sharply: “locking in outdated infrastructure in this way slows the progress of decarbonization by decades.”
The Bill proposes to provide incentives directly to manufacturers, ranging from $400 to $1,000 per unit, depending on the type of heat pump, for production of heat pumps meeting certain criteria, provided that the same manufacturer discontinues production of central AC units. Completely scalable, these incentives could amount to many hundreds of millions of dollars for American manufacturers (or non-US manufacturers producing in the US) choosing to act.
Passage of the HEATR Act could have interesting implications for the Canadian market, in that it might (in time) effectively cut off the supply of central AC systems, limiting availability to heat pumps only.
For a fuller story on this proposed legislation and its implications, click here.
For more information, contact Martin Luymes at 1-800-267-2231 ext. 235 or email mluymes@hrai.ca.
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