An air source heat pump.
A heat pump. Credit: Santeri Viinamäki / Creative Commons

As clean energy advocates make the case for switching from gas heat, alternatives remain niche products for contractors.

A widespread switch from gas to electric heat that some experts say will be crucial for achieving Minnesota’s carbon emission goals isn’t happening just yet.

Minnesota heating and cooling contractors have seen a slight uptick in interest in alternatives to gas heat, but the technologies remain niche products here, where homeowners rely on their furnaces or boilers for half the year or more.

“It’s something that is a growing section of the market,” said Jeff Beiriger, director of the Minnesota Heating & Cooling Association. “Is it everyone’s first choice? Not yet.”

That will need to change in the decades ahead if Minnesota is going to meet its target of reducing carbon emissions 80% by 2050, according to a 2018 report by the McKnight Foundation. It suggested that about three-quarters of the state’s residential space heating will need to be electrified to reach the goal. (The McKnight Foundation is a funder of the Energy News Network.)

Natural gas for home heating is the largest source of residential greenhouse gas emissions in the state, according to the Minnesota Pollution Control Agency. Switching to electricity could significantly reduce pollution, especially as electric utilities continue to transition from fossil fuels to renewable energy sources, the report notes.

The electric heat options sold today are more efficient than the baseboard heaters installed decades ago. Air source heat pumps work a bit like an air conditioner in reverse. In fact, some can double as cooling appliances in the summer, which improves the financial case for buying them.

The Center for Energy and Environment tested cold weather air source heat pumps two years ago and found they “work at surprisingly low temperatures,” said senior research engineer Ben Schoenbauer. Cold weather heat pumps saved energy and money compared to propane or electric baseboard resistance heating.

Though the heating works at low temperatures, homeowners cannot rely yet on heat pumps during polar vortexes. “I wouldn’t install one without having a backup,” he said. For most of the year, however, a cold weather heat pump would heat comfortably to as low as 10 degrees below zero.

The customers most likely to ask about them remind Josh Savage of the ones he used to sell geothermal systems to before federal subsidies went away. Savage, who owns Hero Plumbing, Heating and Cooling in Minneapolis, said electric heat customers tend to drive Priuses, have solar panels and support clean energy.

“To these people, it’s not about saving money — it’s about making a difference in the environment,” Savage said. Typically, “there’s not enough financial incentive to go with an air source heat pump.”

Parts of outstate Minnesota not served by natural gas pipelines can be an exception. In these areas, homeowners can often save money by replacing or supplementing propane or wood heat with heat pumps.

In the Twin Cities, natural gas heats somewhere between 77% and 84% of the residential space, according to a 2017 report by the Minnesota House of Representatives. Over a decade, space heated by electricity grew statewide nearly 4%, the report stated.

John McQuillan, general manager of McQuillan Bros, has been installing heat pumps for 12 years and likes their attributes. Air source heat pumps can save money over boilers and furnaces in warmer months, he said, and many models can shift to providing air conditioning in summer.

McQuillan sells more air source pumps for cooling than heating, especially in older homes in the Twin Cities. Those heat pumps can warm a home for as long as seven months a year at a cost less than boilers or furnaces in many cases, he said.

Snelling Company president Phil Krinkie said he could only recall few customers asking for electric heating. The idea of having to use and maintain two heating systems — at this point, most homes will still need natural gas or propane during extremely cold temperatures — remains a barrier.

The industry’s “collective knowledge” has lately focused on efficiency instead of switching fuel or system types, said Beiriger, of the Minnesota Heating & Cooling Association. In addition, heating, ventilating and air conditioning companies have more than enough business and little incentive to add new products that require investment in training, pricing and other marketing.

“When the market is humming along there’s little reason for people to explore these other options as their first choice,” Beiriger said.

The state’s major electric utilities have not made home heating electrification a priority. Chris Clark, Xcel Energy’s president for Minnesota and the Dakotas, suggests customers first take advantage of the utility’s energy efficiency programs rather than “beginning the conversation of changing out their home heating system to an electric one.”

Xcel does offer a rebate for air source heat pumps, the same one as for central air conditioners, and has seen steady use of both of them by customers over the past several years, according to a company spokesman.

Great River Energy, a generation and transmission cooperative, has programs through its members that nudge propane and delivered fuel customers toward electric heating and other options, said Jeff Haase, manager of member services and end use strategy.

More than 1,500 customers installed heat pumps last year in the territory covered by 28 member cooperatives who buy power from Great River Energy.

“We’re seeing a fair amount of pickup and contractor engagement, and we did some promotions around air source heat pumps,” Haase said.

Otter Tail Power Co., the smallest of the state’s investor-owned utilities, proposed a “fuel switching” pilot allowing it to receive credits within the state’s Conservation Improvement Program. Regulators denied the pilot concept but did not dismiss the idea. A stakeholder group is now studying how the conservation program could be changed to allow fuel switching.

A handful of housing developments are piloting electric heating in the Twin Cities. Smart Home Construction’s CEO, Gary Findell, is building a development on St. Paul’s East Side that will have 70 homes with air source heat pumps for heating and cooling. Heat pumps are to be located in each home’s insulated garage where ambient air will not ever reach subzero temperatures. “The heat pumps have been tested and will work fine here,” he said.

The developers of the 118-unit Hook & Ladder apartments in Minneapolis are using “passive house” strategies in one of is two buildings to reduce energy use through high-performance windows, doors and insulation, with electric heating.

Ryan Companies US, Inc., developer of the Ford site in St. Paul, is exploring how electric heat could be deployed in a vast majority of apartments, townhouses and single-family homes. By building highly efficient housing, Ryan and city officials believe units could be comfortably warmed and cooled with electricity.

“Ryan is actively exploring not having natural gas on the site because the build-out would be so expensive,” said Russ Stark, St. Paul’s chief resilience officer. For electric heating, “the Ford site could be a national model.”

Frank is an independent journalist and consultant based in St. Paul and a longtime contributor to Midwest Energy News. His articles have appeared in more than 50 publications, including Minnesota Monthly, Wired, the Los Angeles Times, the Minneapolis Star Tribune, Minnesota Technology, Finance & Commerce and others. Frank has also been a Humphrey policy fellow at the University of Minnesota, a Fulbright journalism teacher in Pakistan and Albania, and a program director of the World Press Institute at Macalester College. Frank covers the state of Minnesota.