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September 1 – Heat pumps, which generate heat for homes instead of gas-fired furnaces, are becoming more widely used nationwide. They have been promoted as a tool that can reduce greenhouse gas emissions and energy consumption.
But the case for them in Alaska, where cold conditions can prevent heat pumps from operating year-round, isn't always so clear.
But that could change as fuel prices rise, say Alaskans who are working to expand their use of the fuel in the state.
So far, few households in Anchorage appear to have installed heat pumps. In most of southcentral Alaska, buildings are heated with relatively inexpensive natural gas, which reduces the economic benefit of heat pumps.
But the economics could change in the coming years, if the looming Cook Inlet gas shortage sends gas prices higher as expected, proponents say.
Heat pumps are already common in Juneau, where they work efficiently in the region’s relatively warm conditions. They are also growing in numbers in northwest Alaska, where they replace expensive heating fuel.
In the winter, electric-powered heat pumps “steal” heat from the outside air to heat a building or provide hot water, says Ingemar Mathiasson, who is running a project in northwest Alaska to install heat pumps in villages under a $50 million federal grant.
He said the heat pumps have already been installed in several homes in the area as a test case since 2016. The devices operate part of the year. He said they could save up to $2,500 per home per year, before residents in the area resort to heating oil as temperatures drop.
Heat pumps don’t work in Alaska’s freezing temperatures, experts say. But some models can operate in temperatures as low as minus 20 degrees, and the technology is improving, Mathiason says.
As natural gas and stove fuel prices rise, “heat pumps will likely increase across Alaska, as they have in Southeast Alaska,” he said.
Different economies in different regions
Some heat pump owners across Alaska say they like them because they reduce greenhouse gas emissions. Others hail the savings they provide. They work like refrigerators, regulating temperatures with a refrigerant. They look like a small air conditioning unit outside your home.
Advocates of the system say heat pumps can cost an average of $8,500 to install. Homes must be well insulated and draft-free, which an energy inspector can help with. They add that a licensed contractor is usually required to pressure-regulate the system with refrigerant.
Heat pumps at this point will not save money overall for Anchorage households, said Andy Romanoff, of Alaska HeatSmart in Juneau, a nonprofit that works to increase clean energy use in Alaska homes.
“The cost of heating homes with a heat pump in those areas that use natural gas is about 20 percent higher because natural gas is still cheap,” he said. “But as gas prices rise, that equation starts to shift and it becomes more and more profitable to heat with electricity.”
Online heat pump calculators show costs in communities across Alaska, based on unique household circumstances such as energy use and building type.
“No two homes are alike, and there is no one-size-fits-all solution. Homes vary in heating conditions, air flow, construction quality, and other factors,” he said.
Heat pumps work “fantastically” in Southeast Alaska communities, where temperatures rarely drop below freezing, Romanoff said. They can save a lot of money on heating bills there, especially in areas where electricity prices from hydroelectric generation are low.
Alaska Heat Smart plans to use a $38.6 million federal grant to install heat pumps in 6,100 homes in coastal communities from Southeast Alaska to Kodiak. It worked with the Southeast Conference, an economic development group, to win the grant.
Grants could be worth up to $8,500 per household, depending on income. In some cases, the grants will cover the full cost of the heat pump and its installation, Romanoff said. Federal tax credits could also help lower the cost.
Heat pumps can save up to 50 percent on home heating costs by replacing heating oil in that part of Alaska, according to a statement from the Southeastern Conference.
Romanov said the program does not include Anchorage.
Driven by climate change
Families in southcentral Alaska who use heat pumps say they're happy with them.
But they often took unusual steps in their homes to boost the efficiency of heat pumps, such as making them tighter and strengthening the insulation.
Anchorage retirees Cindy and Ray Kennard installed a heat pump in their well-insulated Hillside home in 2022.
Cindy Kinard said it cost about $15,000 to purchase and install the heat pump system.
She said the couple runs the heat pump more than half the year.
She said the home provides hot water, and a radiant floor heating system keeps the house at a comfortable 69 degrees.
The gas boiler is turned on when the temperatures drop for several months.
Cindy Kinard said the heat pump reduces the couple's climate footprint, which is their main goal. It also saves money, thanks to the solar panels they also installed that lower the price of electricity.
“Our experience has been good, with lower gas consumption and less boiler usage,” she added.
She added that their heat pump could save even more money if gas prices rise.
“We will get a greater return on their investment,” she said.
Preparing for the future with heat pumps
Sales of heat pumps are growing nationally, outpacing sales of gas furnaces, said Julie Haskett, spokeswoman for the Chugach Electric Association in Anchorage.
Anchorage Utilities offers a rebate of up to $900 to residential customers who install a qualified heat pump system, and up to $1,500 to small commercial members, she said.
She added that the devices reduce gas usage by about 25% compared to gas heating systems. The company seeks to increase its use of renewable energy and reduce gas consumption.
“The economics of operating a heat pump will continue to improve” as gas prices rise and renewable energy use grows, she said in a statement.
Griffin Hagel Forster and his wife use two heat pumps to heat water and air in their two-story home near Midtown Anchorage.
They renovated the 1950s house to make it completely insulated and airtight. Thanks to the heat pumps, they didn't use natural gas in the house. They even removed the gas meter.
The heat pump system, which costs about $23,000, also filters the air inside the home, said Hagel Forster, president of the Cold Climate Housing Research Center.
The couple said their decision was partly motivated by concerns about climate change, but they also wanted to “future-proof” their home against the gas crisis.
“People have to face this issue. We are running out of the cheapest energy sources, our climate is changing. We really need to build because the future depends on it,” he said.
The home uses about 75 percent less energy than a typical home of the same size, said Hagel Forster, who is also an executive at an affordable housing nonprofit.
But he added that the system is not currently saving money, which is what he expected before installing the system.
He said their electricity bills average about $350 a month. Solar panels would help offset the costs, but they haven't installed them yet.
Hagel Forster said he is still working on plugging holes in the house to help with heat pumps.
Last winter, he used electric heaters to supplement the heating on the second floor. When temperatures dropped to minus 20 degrees in Anchorage last winter, the system struggled to heat water quickly, he said.
“We can just take a lukewarm shower. It's not ideal, but it's not the end of the world,” he said.
He added that savings may come in the future.
“Maybe in five to eight years, we’ll reach a tipping point where the cost of operating a heat pump compared to rising scarce natural gas prices becomes more affordable,” he said.
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