Heat pumps died out in the 1970s, and now the technology is present in 40% of new American homes

A widespread energy crisis? Inflation rampant? If historical rhymes, 2022 is jam-packed with appeals dating back to the 1970s. At that time, the double blow of the Arab-Israeli war in 1973 and the Iranian revolution of 1979 caused major disruptions to Middle East oil exports, with The ensuing energy crisis Western Feed slack periods And alerting many to the need for alternative energy sources.

The crisis marked the coming of age for a technology that was first developed in the mid-19th centuryThe tenth Century: The heat pump that transfers heat from land, water, and air to buildings. Companies raced to invest in these unspeakably large funds, but then the crisis passed, fossil fuels became cheap again, and the humble heat pump was largely sidelined.

Now, with the machinations of Russian natural gas forcing Europe to close factories and staring at the barrel In the cold winter, the heat pump is back. And this time, the back-to-back climate crisis — which requires rapid adoption of renewables — means it is likely to continue.

“Solutions are there,” said Max Vissmann, CEO of German heating and cooling giant Viessmann. “[Heat pumps] They are actually much more advanced than people realize, and they now need to expand.”

450% efficiency

Heat pump systems, which consist of devices connected outside and inside the buildings they serve, may not be much to consider: Air source heat pumps, the most common type, are similar to large air conditioning units — but they are remarkably efficient.

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While a gas oven-based heating system is at its best 95% efficient—that is, it saves 95 units of energy for every 100 units it burns—modern heat pumps are more than 450% efficient. Put 1 unit of electrical energy to power the system, and you’ll typically get at least 4.5 units of heat energy. And the heat from the system was already in the atmosphere to begin with, unlike the energy you get from fossil fuels.

So it’s not hard to see why nearly half of all new multi-family buildings in the US and more than 40% of new single-family homes are built with heat pumps, according to November International Energy Agency (IEA) report. Older buildings can also be retrofitted with heat pumps, although this means drilling a hole in the wall and installing new electrical connections, making them a relatively small part of the market at the moment. Sure, heat pumps are more expensive to buy than their dirty counterparts—depending on the size of the property, they can easily be worth tens of thousands of dollars—but they’re a lot cheaper to run.

Many heat pumps are similar to large air conditioning units.

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Heat pumps have an added advantage: most can act as cooling systems, too. Like refrigerators and air conditioners, heat pumps use fluids called refrigerants to transfer heat—they do it from the outside in and not from the inside out. Invert the system, as is possible with most air and water source heat pumps, and you can lower internal temperatures by up to 5°C. This will not replace proper air conditioning in warmer climates, but it is a big selling point in a relatively temperate region like Europe, where air conditioning is scarce but Heat waves are becoming more common and extreme.

Cue a new influx of investment.

heat pump investments

Viessmann, a 105-year-old company, recently announced a $1 billion investment in heat pumps and other green products over the next three years.

The company is a classic example of Middle class Medium-sized family businesses, a category that forms the backbone of Germany’s economy – a country racing to respond to both rapid climate change and an existential energy crisis. Max represents the fourth generation of his clan to lead the $3.4 billion company. Viessmann introduced its first heat pump in 1979, only to dampen the technology after that energy crisis wore off. But it came back into the heat pump business two decades ago, and last year it captured about 15% of the German market.

Now Viessmann needs to defend its position as one of the market leaders in the country as its competitors pour more money into heat pump technology.

Stiebel Eltron, a 98-year-old heating company, got into the heat pump business in the 1970s and stuck with it even though the technology became a big money loser until relatively recently. The company boosted heat pump production by 60% over the past year to meet demand. It is now one of the five largest heat pump manufacturers in Europe and last month announced a new investment of $600 million in heat pump production and research and development over the next five years.

“In a world where no one has thought twice about using gas and emitting carbon dioxide2It’s hard to sell something more expensive, as the benefit is that less CO2 is emitted2Managing Director Kay Schiefelbein said. “We are in a situation today where the heat pump market in Europe is growing rapidly, mainly due to climate protection.”

Indeed, while the Ukrainian crisis has led to a sudden surge in demand for heat pumps this year – leaving many buyers waiting months for new heat pumps – German demand has already been rising sharply since 2019, when the government ramped up subsidies as it sought to meet its targets climatic.

Globally, it represents heating, cooling and operating buildings more than a quarter of greenhouse gas emissions. According to the government-backed organization Climate TransparencyIn Germany, per capita carbon emissions related to buildings were 56% higher than the G20 average in 2020, thanks in large part to the widespread use of gas and oil to heat buildings. That made heating, along with transportation, a top priority for lawmakers.

With the introduction of new subsidies, German heat pump sales jumped 40% between 2019 and 2020, then another 28% the following year, reaching 154,000 units in 2021, out of 900,000 heating units sold in Germany that year. (Globally, according to the International Energy Agency, 177 million heat pumps will be installed by 2020, an increase of about 10% annually in the previous five years.)

Last month, Germany A new government focused on the environment Reform of the subsidy scheme, reducing the maximum subsidy available for heat pump installations from 50% to 40% of the label price.

This was not a huge blow to the heat pump sector, because the government also ended subsidies for gas-fired boilers – still the most common way to heat buildings – and oil-based heating systems. She promised to introduce a law requiring all new heating system installations to take at least 65% of their energy from renewable sources.

“For the industry to be able to plan and to be safe in its planning, it is very important that this be specified in law,” said Katja Weinhold, head of communications at the German Heat Pump Association. “This would send an important signal that the standard case in Germany would not be the installation of a gas boiler but an electric heat pump.”

The 65% rule has yet to be set, and it’s just one of several uncertainties worrying the heat pump industry at the moment.

Chips, skills and fluorinated gases

One immediate problem, especially given the sharp rise in demand for heat pumps, is the persistent shortage of global chips. “Microchips, especially processors, are very hard to come by right now,” said Stiebel Eltron’s Schiefelbein. “Chips are mainly intended for the auto industry,” Max Wiesmann said. Do we need more cars, or do we need more heat pumps to make our homes and industrial processes autonomous [of fossil fuels]? “

Lars Ivar Nitter Havro, chief analyst at Rystad Energy — which expects to see a global sevenfold increase in heat pump demand by 2050 — said chip supply chains are still “feeling some of the fallout” from the COVID shutdowns. But he also warned of potential future problems, due to deteriorating relations between China and Taiwan (the former supplying the chip industry with vital materials) and Russia’s war in Ukraine which halted Ukrainian production of noble gases (also important for chip production).

Another major source of uncertainty has to do with the refrigerants that make heat pumps work. Currently, these tend to be the so-called fluorinated gases such as hydrofluorocarbons, which somewhat ironically have a global warming potential of as much as 1,700 times that of carbon dioxide.2—If they drop out of the system.

Europe will likely order the phase-out of the material later this year, putting the heat pump industry in a bind. Some companies are already beginning to switch to more natural, climate-friendly alternatives—some Viessmann products use propane, for example—but many fear the transition too fast could stifle the heat pump market at a time when it is most needed.

“The impact of refrigerants on the climate is very small compared to the energy efficiency gains,” says Schiefelbein. “Of course, everyone would like to have natural coolants in heat pumps like propane, but if we phase out HFCs too quickly, we will slow down the growth of the entire heat pump market… Not many products can be made with natural coolants today. Personally, I suggest that if someone develops a new heat pump and puts it on the market for the first time, then [the rules can say] It should contain a natural coolant.”

Other issues are finding enough skilled workers to install heat pumps and, most importantly, ensuring that homes are good enough. isolated To reap the full benefits of installing it. The question of how strong it is to force people to install it also remains open. Max Wiesmann warned that an overly harsh approach in Germany could lead to “a yellow jacket movement As we have seen in France” – a reference to a popular uprising that erupted due to high energy prices.

But the green benefits of heat pumps are clear, and policymakers around the world are embracing the technology. For example, the United States, which already accounts for half of the market, is More motivation Installation of heat pumps through the subsidies stipulated in the Inflation Reduction Act.

As with electric cars, heat pumps show that much of the technology the world needs to fight the climate crisis already exists – it’s just a matter of making them the default.