Renewable energy is derived from natural sources that are replenished at a higher rate than they are consumed. Examples include sunlight, wind, water, and geothermal heat. The use of renewables provides environmental benefits (such as lower greenhouse gas emissions), economic advantages, sustainability, and better energy security. As a significant consumer of energy, HVAC is well-positioned to promote greater usage of renewable energy sources. We asked our Expert Panel Roundtable: How can the HVAC market better embrace renewable energy?
Renewable energy presents both a challenge and an opportunity for the HVAC market. The cost of delivering power to buildings already varies over time, with electricity network charges increasing during times of congestion on the grid. However, this variable pricing is set to increase markedly as we continue to decarbonize our power generation. Wholesale energy markets are already pricing power negatively at times of excess generation. In other words, energy companies are paying for the power to be consumed, while we are seeing significant prices during periods of high demand and low renewable generation. Consumers have traditionally been protected from such price fluctuations by flat rate tariffs, but the savvy consumer can save money by using a smart HVAC system that targets demand during times of low prices and avoids power consumption during high price periods. By producing smart control systems that can optimize against these time-variable price signals, HVAC providers can differentiate their products and save money for their customers.
Rheem is seeing a major shift to embrace renewable energy with the introduction of cold climate heat pump systems. While we cannot control how the grid is powered (i.e., renewable sources over carbon-based sources), we can reduce or eliminate carbon emissions at the point of use with heat pumps. A great first step towards embracing renewable energy is the use of dual fuel systems, which studies show significantly reduce the carbon emissions from the furnace by relying more on the heat pump for high-efficiency electric heating. As heat pumps gain acceptance, we expect a gradual transition to electrifying the air mover (transitioning from furnaces to air handlers).
The regulatory push towards electrification isn’t slowing down, and with it, greater interest in weatherization and heat pump adoption. This has only been intensified at both the federal and local level following the passing of the Inflation Reduction Act which covers $369 billion in tax credits for the next 10 years over a variety of initiatives including investing in clean energy, boosting energy security, and helping consumers save money on their energy bills. HVAC professionals can leverage their deep expertise to rapidly help homeowners take advantage of and navigate the available incentives. Contractors who excel in this will not only stand out from their competitors but will also sell higher-revenue jobs.
One of the obvious answers is heat pumps. If heat pumps could harness the energy from outdoor air, ground, or water to heat or cool buildings, using primarily green electricity from solar panels or wind turbines, we would be able to increase the share of renewables in HVAC even further.