Can states team up to better understand the benefits and challenges that efficient electrification through heat pump adoption can produce for their citizens and economies? Earlier this fall in the first in a series of webinars, Federal Dollars, State Policies and Heat Pumps: The Future of Heat in the Midwest, RAP, CLASP, and their guest panelists answered this question with a unanimous “yes.”
RAP and CLASP assembled a panel of speakers representing organizations and utilities in the Midwest to discuss how cooperative efforts are helping with building electrification and heat pump adoption. CLASP’s Vivian Cox and RAP’s Raphael Breit moderated the discussion with Kellen McSweeney of Slipstream, Rabi Vandergon of the Center for Energy and Environment, and Andrew McNeally of the Upper Peninsula Power Company (UPPCO). What follows are some highlights from those conversations.
Midwest Air-Source Heat Pump Collaborative: Cross-Pollinating
McSweeney supports the work of the Midwest ASHP Collaborative to accelerate heat pump adoption in 13 Midwest states. The initiative — formed in 2022 with U.S. Department of Energy funding and support from Pacific Northwest National Laboratory — is delivered by the Center for Energy and the Environment and Slipstream in partnership with the Midwest Energy Efficiency Alliance and Elevate. Their focus is on residential heat pumps.
The Midwest collaborative conducted a needs assessment and has coordinated with others to develop a regional market transformation strategy. As McSweeney pointed out, “the Midwestern states share a wide variety of challenges and can learn a lot from engaging with each other and regional best practices.” The collaborative’s data analysis and interviews with stakeholders, including utilities, state energy offices, manufacturers, distributors and installers, underscores the interest across the region in simplicity and shared approaches to program design and incentives.
“We have seen that, overall, there were a lot more similarities between states than differences,” McSweeney said.
Minnesota ASHP Collaborative: Identifying and Addressing Barriers
Vandergon leads the Minnesota Air Source Heat Pump Collaborative, which was founded in 2019. The Minnesota collaborative is funded by the state’s investor-owned utilities, administered by the Minnesota Department of Commerce, and implemented by CEE. The collaborative also receives funding from consumer-owned utilities. Replacing air conditioners with heat pumps is a core piece of their strategy.
Vandergon framed the Minnesota collaborative’s work as identifying and then deploying strategies to encourage heat pump adoption. “We have identified the same barriers that Kellen described,” he noted, including a general lack of customer and contractor education and awareness of variable-speed and cold-climate heat pumps. This is combined with an overwhelming number of programs that is creating confusion for customers and contractors: “In Minnesota alone, we have over 170 different utility programs that all have different specifications.”
In addition to recognizing the importance of upfront costs, the Minnesota collaborative emphasizes customer and contractor outreach and education. “We want to create simplicity and coordinate programs and incentives to make navigating the clean energy transition easier for customers and contractors.”
Heat Pump Adoption in Michigan
Andrew McNeally, manager of Energy Solutions at UPPCO, started his career with Maine Public Service, a rural utility that has since been sold several times, with 39,000 customers and a service territory of 4,400 square miles.
“We started a heat pump pilot program hoping to get 500 folks to sign on,” McNeally said. “After six months, we had more than 1,000. We had contractors and distributors lining up to participate. I had this one guy who came to the training who said, ‘I don’t know anything about heat pumps. I am here to learn.’ Six weeks later he had hired 16 guys and was installing two heat pumps a day per two-person crew. Heat pumps transformed his business. Now he is one of the biggest heat pump installers in the state.”
In 2016, McNeally started work in Michigan with UPPCO, another rural utility with about 54,000 customers and a service territory of 4,400 square miles. While rural Maine and rural Michigan share many similar attributes, relatively cheaper natural gas in Michigan has made heat pumps a tougher sell.
Andrew participates in the Michigan Heat Pump Collaborative, which grew out of pre-pandemic conversations between Michigan investor owned utilities — Indiana Michigan Power, DTE Energy, UPPCO and Consumers Energy — and Slipstream. Despite having different service territories and customers, “we have similar education challenges for our customers, installers, and distributors.”
Support from the Federal Government
McNeally said he is encouraged by the influx of federal dollars from the Inflation Reduction Act. Michigan received a Carbon Pollution Reduction Grant from the U.S. Environmental Protection Agency that will support the implementation of Michigan’s Department of Environment, Great Lakes, and Energy’s (EGLE) Michigan’s Priority Climate Action Plan . Part of EGLE’s plan is to reduce emissions related to heating Michigan homes and businesses by 17% by 2030.
The utility and stakeholder engagement in these midwestern collaboratives illustrates the value of bringing people together to learn and find solutions. “We experience the same challenges,” McNeally said, “and we are putting together simple and easy to understand approaches that help people and support heat pump adoption.”
Watch Federal Dollars, State Policies and Heat Pumps: The Future of Heat in the Midwest here.
