We Have Heat Pumps. Who Will Install Them?

This story originally appeared on BigPivots.com on August 19, 2024.

After James Warren and Hayley Schroeder bought their 1,500-square-foot house west of downtown Denver in October 2023, they set out to reduce their energy footprint.

First came an audit by Xcel Energy. The attic of the 1950s-era house had virtually no insulation. It does now, at the R-60 level. That’s about as good as you can get. Only then did they start thinking about more costly investments. The natural gas furnace was 17 years old and the house had no air conditioner.

Eyeing federal, state and other incentives they decided go to with a new air-source heat pump. It will keep the home at a comfortable temperature, winter and summer. The cost for them is $13,000, about the same as if they had purchased a new furnace and air conditioner. This is better, though because the air-source heat pump will almost entirely eliminate the cost of gas with only a modest increase in their electric bill.

Something else was also top of mind for the couple as they shaped their plans: this is the most climate-friendly thing they could do. Still in the future is a replacement of their natural gas cook stove.

“We want to get totally away from gas. It’s just that we don’t have the money to buy a different oven,” said Warren during an event on Aug. 13 organized by the Environmental Protection Agency that was designed to celebrate the two-year anniversary of the Inflation Reduction Act.

Colorado Governor Jared Polis showed up to offer celebratory words as did various others involved in Denver’s efforts to reduced emissions from buildings.

“Homeowners who’ve installed clean electric machines deserve the same pomp and circumstance as a big, new manufacturing facility might get upon opening,” the e-mailed invitation read.

KC Becker, the regional administrator of the EPA, cited the combination of tax credits and other incentives from different sources. “One may not be a driver, but they are combined,” she said.

Being in Denver helped the couple significantly. A program called Denver Cares provided two rebates totaling $4,786. Xcel had a heat-pump rebate of $2,000, Colorado’s heat-pump discount was for $1,500. And then there was a $2,000 tax credit through the federal government’s Inflation Reduction Act of 2022.

That’s $10,286 altogether in incentives.

The IRA, perhaps the single most important piece of climate legislation passed by Congress, dedicated more than $370 billion to push along technologies that will reduce air pollution.

The Washington Post reported that Americans have been taking advantage of the incentives at twice the rate that federal officials had expected. “More than 3 million households claimed $6 billion in credits for solar panel installation and related projects, as well as $2 billion for other home improvements such as new windows and air-conditioning systems,” the newspaper said.

More modest federal aid in the energy transition was offered through a 2021 law passed by Congress, the Bipartisan Infrastructure and Jobs Act. Still, for Colorado, it has produced $294 million for clean energy and power and $23.3 million for EVs and electric buses. This compares with $1.6 billion for roads and bridges and $915 million for broadband.

A website called Luminance brims with these and other numbers. Check out this part of the website for a county-by-county breakdown. Or go here for statewide sector totals. The dashboard also points out that Colorado is so far in line to get $6.7 billion from the two laws; so far $1.26 billion has actually been awarded.

What does this mean for jobs? Very specifically, do we have the people with the skills and knowledge to install heat pumps and geothermal and other technologies that will dramatically reduce emissions from our houses as well as other buildings?

You can get lost in this same dashboard in the enumerations about jobs. For example, it says the federal legislation will produce the need for 21,324 carpenters, 1,016 pipelayers and 525 fence erectors. Not sure how they come up with numbers like this, but I am sure there is a methodology.

Greater specificity is offered by the section for the IRA jobs: we need 18,580 electricians, 629 solar photovoltaic installers, and 1,312 urban and regional planners.

Wendy Hawthorne, director of strategic coordination for the two federal laws in the Governor’s Office of Economic Development, told me that the two laws will create demand for 50,000 jobs in the next 10 years.

“The challenge is that it’s happening all across the country. So Wyoming has projects, Utah has projects, Texas has projects. So we have to be creative about how we get this work done. We have to do training,” she said. Becker had acknowledged a lag time between federal funding to help train the workforce and implementation.

Several weeks before, Colorado’s two U.S. senators had been at the EPA regional headquarters in LoDo to announce $200 million had been awarded to the Denver Regional Council of Governments, called DRCOG, for building upgrades in the nine-county area. The money is to be used to make buildings more energy efficient and produce fewer emissions. The Colorado Energy Office also got $129 million with somewhat overlapping purposes.

Clay McCombe thinks often about how to create a workforce necessary for this work of transitioning buildings from fossil fuels. He’s the electrification workforce liaison for the City of Denver.

“My goal is to help build out a diverse and robust workforce. There are two parts. One is thinking about the next generation. How do we bring new workers to this type of work?” he said shortly after Polis had left the West Denver house.

“But before that, we have to train the existing workforce. There’s a whole industry of HVAC contractors, plumbers and pipefitters that are used to working on gas equipment that haven’t been trained on heat pumps yet. And so before we talk about bringing new folks into the industry, we need to take our current industry and say, ‘Hey, what are the training opportunities? What’s a one- or two-day training you can get to learn the how to do a quality installation of a heat pump?”

McCombe confided that the opportunity presented by the federal money is also somewhat intimidating.

“All this federal money coming is a little scary sometimes,” he said. For example, are the contractors getting federal money qualified to install heat pumps?

“We want to make sure that we’re training that existing workforce. Our goal with the federal money is to train 4,800 workers, new and existing, during the next five years. That would be workers in the metro area, in the nine-county DRCOG region.”

Denver has been fortunate in having its Climate Protection Fund, a tax approved by Denver voters in 2020 that yields $40 million annually for climate and energy work. Other jurisdictions have not had that, so Denver wants to help.

In this effort, he said, Denver has had considerable support from the labor unions. In applying of the huge federal grant, for example, the International Brotherhood of Electrical Workers and other unions were happy to share letters of support.

“They don’t want to be left behind,” said McCombe.

Other places in Colorado, from the resort counties to the Western Slope, don’t see the need to help HVAC contractors learn new skills. As Matt Scheer, an Eagle County commissioner points out, contractors there have all the work they can handle. They have no need to learn new skills.

That, in turn, makes it hard for Eagle, Pitkin and other counties to achieve their climate goals.

Elephant Energy oversaw the work at the house in West Denver. It’s a relatively new company, founded in April 2021, with operations in Massachusetts and in Colorado from Fort Collins south to Littleton and Parker.

Ironically, the company’s webpage that proclaims “We’re in the Front Range” uses a photo of rooftops in the Roaring Fork Valley overseen by the sublime snow-swaddled Sopris.

Business for Elephant Energy has been rapidly growing, says DR Richardson, a co-founder. His company acts as an intermediary between contractors and homeowners who might be baffled or at least confused about the various incentives as well as costs. The incentives of the IRA coupled with growing awareness of the advantages of air source heat pumps have been a boon.

“A year ago we were doing 10 (installations) per month. Now we’re doing 50 a month – and I for see a similar trajectory once (new) rebates come out.

Those rebates are being decided by the Colorado Energy Office, which is in charge of administering the federal money. These will be direct cash rebates offered to homeowners as qualified by their income. In effect, the rebates will further drop the prices of air-source heat pumps – substantially.

Already, rebate programs exist in Denver and Boulder, and the work occurring in those places reflects those incentives. Broomfield, for example, does not, and there’s less interest in installation of clean-heat pumps.

In all this, Colorado lags some other industrial countries. Richardson cites Norway, where he says 60% of homes have heat pumps.

“In Colorado, it’s maybe one in a hundred, or probably closer to one in a thousand, he says.

A big piece of what holds back contractors is the new technology. “They don’t know how to install or sell or price the technology and think through the cost implications.” And then there are the incentives. That’s what Elephant Energy does.

“Our job is to make the lives of contractors easier,” he explained. “We work closely with homeowners. We do the system design and equipment procurement, handle the incentives and rebates, and do all the billing and commissioning.

In other words, the only thing the company doesn’t do is the actual installation itself. It is currently working with about 12 contractors.

Although officially agnostic about which brands of heat pumps work best, Elephant in practice mostly uses Mitsubishi because of its combination of price and performance. “We found it to be really stone-cold performance on those days when it’s negative 14. Very few brands are able to keep up with that.”

Because of the thinner air found at 5,280 feet as compared to sea level, heat pumps need to work harder. For the same reason, a heat pump working at Leadville with its even thinner air, must work even harder. A test was conducted last winter at Leadville by the National Renewable Energy Laboratory and Xcel Energy. No results have been announced.