The Potential for Air Source Heat Pumps within Cambridge Residential Buildings

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1 The Potential for Air Source Heat Pumps within Cambridge Residential Buildings Adam Hasz City of Cambridge Renewable Thermal Fellow September 12, 2017

2 Table of Contents I. Executive Summary II. Introduction: A Renewable Thermal Roadmap for Cambridge Residential Buildings III. Air Source Heat Pumps can meet Residential Heating Demand IV. An Analysis of current heating systems in Cambridge residential buildings V. Pathways for moving Cambridge buildings to adopt air source heat pumps VI. Estimating heat pumps sizing for replacing existing heating systems VII. Incentives and Rough Costs for Air Source Heat Pumps in Massachusetts VIII. Highlights of other cities efforts at promoting air source heat pumps IX. Recommendations and Conclusion Appendices Air Source Heat Pump Technology Guide Targeting Maps for 1-4 family buildings and scoring methodology Data tables for counts and GFA by heating types NYC Building Conversion Pathways HeatSmart CoolSmart Somerville Pricing Sheet HeatSmart CoolSmart Somerville Rebate Guide Interviews with heat pump stakeholders Assessing database with heating types 2

3 I. Executive Summary In 2015, the Cambridge City Council approved the Net Zero Action Plan to achieve net zero emissions from the city s building stock by To decarbonize its buildings, Cambridge needs to transform its heating systems. Currently, fossil fuels combusted onsite supplies 56% of all energy used in Cambridge. About 18% of total building energy consumption is in the form of heating energy for the residential sector, which will likely require individual building-level interventions in order to become fossil fuel-free. Luckily, renewable thermal technologies can replace traditional fossil fuel heating systems. Air source heat pumps (ASHPs) are a particularly suitable technology for Cambridge residential buildings. Air source heat pumps use a refrigerant and compression to capture heat energy from ambient air and then move that energy into a home. ASHPs create about half of the emissions of natural gas systems per unit of heat output, and carbon intensity will continue to decline as the grid becomes more renewable. Cold climate heat pumps move about 3 units of heat per every unit of electrical input even in during winter. Smaller residential buildings can utilize minisplit multi-zone heat pumps, which are simple to install compared to conventional heating systems. Larger multifamily buildings can utilize advanced variable refrigerant flow (VRF) heat pumps that can provide heating of up to 48 rooms from a single outdoor unit. When paired with efficiency improvements, ASHPs can serve as the sole source of building heating. Multi-zone minisplit ASHP system Variable Recovery Flow ASHP system Single outdoor unit can connect to up to 5 rooms. Full system cost ranges from $ $16,500. Single outdoor unit can connect to up to 48 rooms. Full system cost ranges from $10 - $22 per square foot. There are many choices available to building owners as they consider different heat pump systems. The following questions should be considered while evaluating the potential for heat pumps in a building. What is the heating and cooling capacity required? This will determine the size of the system. Is the building too tall for certain systems? Heat pumps have maximum line lengths and heights. What are the electrical systems of the building? Large VRF heat pumps require 3 phase power. When does the building's current heating system expire? If soon, it may be easier to replace. What is the overall lifetime cost (capital + operating) of the system? Make sure to consider equipment cost, installation, upfront rebates, expected fuel costs, and maintenance. Is there solar PV on the building? If so, electricity costs for the heat pump will be cheaper. If multifamily, does the building have master metering or sub-metering? A landlord will likely want to continue the same billing arrangement for heat, which restricts possible choices. Is the building in a historic district or have aesthetic constraints? If so, certain heat pump systems may not be available because they violate requirements or desired aesthetics. 3

4 This paper analyzes the Cambridge residential building stock to prioritize interventions and outreach for air source heat pumps. While the majority of buildings in Cambridge use gas boilers, there are 1538 residential buildings that still heat with electric resistance or fuel oil. These buildings should be immediately targeted for conversions. A secondary target should be the 5866 buildings that do not have central air conditioning, as many building owners choose to adopt heat pumps for their cooling abilities. Heat System Types of Residential Buildings by count (left) and Gross Floor Area (right) To match each building to a specific heat pump system, this paper uses a methodology to calculate a rough expected heat load based on energy use intensity (EUI). The table below matches a particular building typology to heat pump systems based on gross floor area. The table also includes a sum of the current rebates available through MassSave and MassCEC, as well as the future incentives expected from the Massachusetts Alternative Portfolio Standard. More details on the methodology and assumptions of this table can be found in the building typology and incentives sections of this paper. Building Typology Building Size (sq ft) Typical Heat Pump system 100% HP capacity* Base cost Current Rebates Future APS Credits SF Home 1,500 1 multi-zone unit 17.5 kbtu/hr $11,300 $1,300 ~$1,560 3 units 3,600 3 multi-zone units 42 kbtu/hr $33,900 $3,900 ~$3, units 18,000 1 heat pump VRF unit 210 kbtu/hr $216,000 $14,000 ~$1, units 60,000 4 heat pump VRF units 700 kbtu/hr $720,000 $46,667 ~$64, units 150,000 9 heat recovery VRF units 1750 kbtu/hr $2,250,000 $175,000 ~$161,940 *assumes 99% heating threshold of 12 F and that all buildings have a useful heat Energy Use Intensity of 30 kbtu/sq-ft In addition to analyzing potential heat pump options, this paper recommends that Cambridge should utilize community marketing techniques as part of a HeatSmart campaign. Cambridge can also train community coaches and retrofit advisers to understand heat pump technology and building applications to help can quickly scale the knowledge and enthusiasm for adopting this important technology. To achieve net zero emissions, virtually all fossil fuel heating sources in Cambridge must be replaced. This paper seeks to aid that undertaking by showing the potential for ASHPs for residential buildings. 4

5 II. Introduction: A Renewable Thermal Roadmap for Cambridge Residential Buildings Stabilizing the climate will require a global transition to a net zero economy, where yearly emissions are on net balanced between sources and sinks. In the 2015 Paris Agreement, world leaders pledged to meet this goal of complete climate neutrality at some point in the second half of the century. 1 Achieving a net zero world will require a complete transformation of how we produce and utilize energy. The City of Cambridge is already taking important leadership actions for net zero energy. In 2015, Cambridge approved the Net Zero Action Plan to achieve net zero emissions from the city s building stock by The plan involves a series of steps focused on retrofitting existing buildings to be more efficient, requiring new buildings to be designed to achieve net zero emissions, transitioning the Cambridge energy supply to be near-zero carbon, and engaging the Cambridge community to help make the transition possible. The plan is expected to reduce Cambridge overall emissions by 70% within 35 years. Image source: Cambridge Community Development Dept. Since the plan was approved, Cambridge has taken steps to reduce the carbon content of its electricity emissions through Cambridge Community Electricity and Sunny Cambridge. It has also continued to advance building energy efficiency through the Multi- Family pilot program with Eversource. However, relatively little progress has been made in addressing building emissions from direct fossil fuel combustion for heating and cooling. As shown in the figure on the left below, emissions from natural gas and fuel oil for heating accounted for roughly 44% of all Cambridge building emissions in Furthermore, heating demands consume 56% of all building energy used in Cambridge. 3 Clearly Cambridge must prioritize decarbonization of the heating sector. Building Energy by Use Type Image sources: Cambridge Building Energy Primer by Peregrine Energy Group and LCESS by Ramboll This white paper presents an analysis pursuant to the Net Zero action plan: the potential for air source heat pumps to provide heating needs for Cambridge residential buildings. The paper provides a summary of the various types of air source heat pumps, key considerations for evaluating buildings as candidates to utilize heat pumps, an analysis of which Cambridge buildings should be priority targets for outreach on heat pump adoption, and a methodology for estimating the type of heat pump system needed in a building and calculating the rough expected cost of the system. The paper also offers forward-looking recommendations for how Cambridge can accelerate the adoption of heat pumps. 1 wri.org/blog/2015/12/insider-understanding-paris-agreement%e2%80%99s-long-term-goal-limit-global-warming Low Carbon Energy Supply Study WP1 by Ramboll Group 5

6 An Overview of Cambridge Buildings and Residential Heating Demand The Cambridge building stock is a direct reflection of the city s character: residential neighborhoods, two major universities, designated lab and office space in Kendall, and a handful of commercial corridors. According to our analysis of the city s GIS building shapefile 4 and the CDD land use map, 5 Cambridge has 13,754 buildings in total. Of these buildings, 84% of structures fall within parcels categorized as residential, and a full 70% of all structures within Cambridge are 1-4 unit residential homes. Residential living spaces also make up 49% of the total gross floor area within the city. The map below displays polygons of the buildings within Cambridge according to their land use type along with building counts. The table in the below left displays gross floor area, residential floor area, and housing units, and the pie chart on the bottom right displays the proportion of gross floor area for each land use type. Data Sources: Cambridge GIS Department and Cambridge CDD. Analysis conducted by Adam Hasz

7 The City of Cambridge commissioned Ramboll Group to conduct a comprehensive assessment of low carbon energy supply options available for the city. Ramboll estimated the specific heating demands of individual buildings, showing that most residential buildings in Cambridge use considerably less heating energy than educational and office structures. The map shows that the average heat usage of residential areas is under 340 kbtus of heat per year (zone 2). While areas with high heat demand (ie zone 1) can likely be supplied with district heating, residential buildings will likely need individual heating solutions. Image and data sources: Low Carbon Energy Supply Study WP2 by Ramboll Group The graphic below shows a breakdown of Cambridge building energy use by building type. 6 Residential buildings consist about 26% of total Cambridge building energy demand. The most recent data from the Cambridge greenhouse gas inventory shows that a majority of this residential energy usage is natural gas, followed by electricity and fuel oil. While electricity provides energy for many uses, residential buildings primarily use natural gas and fuel oil for space heating needs and for domestic hot water. Image and data sources: Peregrine Energy, Cambridge CDD If we assume that all of the natural gas and fuel oil within residential buildings is used for space heating and hot water, then residential heating makes up about 18% of all energy usage within the city. Thus, transitioning space heating and hot water production from fossil fuel based heating to renewable thermal alternatives would make a large contribution to the overall Cambridge net zero efforts

8 III. Air Source Heat Pumps can meet Residential Heating Demand High fossil usage in the heating sector is not just a problem for Cambridge; thermal energy used for heating currently generates over 1/3 of New England s regional greenhouse gas emissions. 7 With such a high percentage of emissions, many New England cities are exploring renewable thermal technologies that can displace fossil fuel combustion heat. MassCEC is also targeting the sector with $30 million in rebates to promote four renewable heating and cooling technologies: air source heat pumps, ground source heat pumps, modern biomass wood boilers, and solar hot water systems. Analysis by Meister Consultants Group (MCG) shows that thermal emissions for air source heat pumps, ground source heat pumps, biomass pellet boilers, and solar hot water are all significantly lower than their fossil fuel alternatives. The graphic below compares emission levels per unit of heat generated from various technologies given the current grid mix. The dashed lines are represent the range of emissions based on fluctuating grid electricity fuel sources and different sources of biomass for wood pellet boilers. As renewable electricity supply grows, associated emissions from heat pumps will decline. Image source: Bringing Renewable Thermal Solutions to New England by Meister Consulting Group Air source heat pumps have been far more popular than other technologies in the Mass Clean Energy Center renewable thermal rebate program, generating over 4000 rebates as of mid Recent analysis by the Acadia Center shows that converting from fossil fuels to heat pumps for at least 13% of residential building heat needs and at least 5% of commercial building heat needs by 2030 will put New England on track to meet its goal of overall 80% reductions by Other analysis by NEEP charts a pathway to a market transformation of converting up to 40% of households within the Northeast to heat pumps is possible by However, all of these renewable thermal technologies can play an important role in reaching New England s overall climate goals. The following sections provide a summary of these four technologies and their applicability to Cambridge. Image source: Meister Consultants Group 7 Bringing Renewable Thermal Solutions to New England by Meister Consultants Group, February

9 Air Source Heat Pumps 10 Heat pumps can provide cost-effective and energy-efficient heating, cooling and water heating. While traditional systems burn fuel to create heat, a heat pump instead works by moving heat into or out of a building. Though they require electricity to operate, efficient heat pumps can provide the same amount of heating for a third of the electricity needed for traditional electric resistance heating. Air-source heat pumps use the temperatures of the outdoor air to heat or cool homes or buildings. Advancements in technology over the past few years have made air-source heat pumps an efficient source of heating and cooling in cold climates, and existing models operate efficiently at temperatures below zero Fahrenheit. Air-source heat pumps work by circulating a liquid, called a refrigerant, between an indoor air-handling unit and an outdoor compressor. When heating a building, the heat pump heats the liquid by pressurizing it, pumps it from outdoors inside, and then circulates it through the home or building's heating system. After the liquid transfers the heat into the building, it is depressurized and cooled. The liquid then returns outdoors, where the ambient temperature warms the refrigerant, and the process begins again. Heat pumps can also be used to cool buildings through a similar process. In this case, the warm air inside a home or building is cooled by the liquid, which has been depressurized. The refrigerant is then sent outside and pressurized, which heats it up, and the ambient outdoor temperature cools it. Air-Source Heat Pump Components How an Air-Source Heat Pump Works Image sources: fujitsugeneral.com/us/residential/what-is-a-mini-split.html and reuk.co.uk/otherimages/air-source-heat-pump.gif Air-source heat pumps have a variety of designs. Single-zone systems are the simplest option, which consists of a single outdoor radiator connected to a single indoor head via refrigerant piping. Heat is distributed directly from the indoor unit, which is enough to warm a single room. Multi-zone systems use multiple indoor heads in different rooms connected to the same outdoor radiator unit. Each head can be turned on and off independently, giving a resident flexibility in heating and cooling decisions. Multi-zone systems are also known as mini-split or ductless heat pumps because they are split through small refrigerant piping and do not require existing ducts to provide heating to a building. In contrast, central air source heat pumps connect an outdoor unit to a central distribution system, such as ductwork for buildings that use forced air and water piping for buildings that use hydronic baseboard heating. Generally central systems are less efficient than single-zone or multi-zone systems. 10 Language in this section is largely drawn from 9

10 Larger buildings can use a different type of air-source heat pump technology called Variable Refrigerant Flow, or VRF systems. These provide greater control and support a large-scale building s entire heating and cooling demands. VRF heat recovery systems have the best efficiency and can provide simultaneous heating and cooling, while VRF heat pumps only provide heating or cooling at a given time. Most heat pump manufacturers allow building owners to mix and match indoor and outdoor units according to their preferences and specific heating needs. The rule of thumb for sizing these matches is that indoor units must have a minimum of half of the rated capacity of the outdoor unit. 11 The units are connected to each other refrigerant piping, which creates constraints on the maximum line length and height between indoor and outdoor units. The tables below show examples of the various out and indoor air source heat pump units available. Extended tables with more information can also be found in the appendix document Air Source Heat Pump technology guide. 11 Interview with Joseph Wood of New England Ductless 10

11 Key considerations for evaluating the potential for heat pumps within a building A building owner should ask following questions when evaluating heat pump technology options. How large is the space that needs heating and cooling? If the area to be heated is a small space or just a single room, a single-zone system will suffice. Multiple rooms will require a multi-zone system. Multiple apartment units will likely require a VRF system, unless each apartment receives its own independent condenser unit. What are the electrical requirements of the heat pump? Large VRF systems require 3-phase power, which is usually only available in large multi-family buildings. Some older homes may also need to upgrade their existing circuit board to handle the higher current requirements of any heat pump system. This should be factored into the cost when evaluating potential savings for a new heat pump system. What is the height and length required between the outdoor condenser and indoor units? Each heat pump type has a maximum refrigerant line length and height. Using heat pumps at a distance greater than these constraints will either require multiple condenser systems or the use of a large VRF system. What is the heating capacity required? Estimating the specific heat needed requires many factors, including the building s overall envelope efficiency, the expected coldest temperature (which will determine the building s peak heat demand), and whether or not there are any auxiliary sources of heat (ie partial heat pumps and partial gas system). What is the cooling capacity required? Similarly to estimating the heating capacity, this number depends on the efficiency, the highest temperature, and whether or not heat pumps are intended to become the sole source of cooling capacity. What is the system efficiency? Some heat pump types, like a single-zone minisplit and VRF heat recovery system, are more efficient at producing heating energy per unit of electrical input. Other system types, like a ducted minisplit system, have a relatively low coefficient of performance because of the inefficiencies of the ducted distribution system. Building owners should evaluate their heat pump options based on these system efficiencies, especially if designing a building to be green certified through the LEED or PassivHaus standards. What are your aesthetic preferences? While the most common setup for a heat pump system involves an outdoor unit at ground level matched with indoor wall units, so building owners may not like the aesthetics of this design. Alternative options include placing the outdoor unit on the roof and utilizing floor-mounted or ceiling mounted indoor distribution units. What rebates are available? Only certain heat pump systems with high efficiency ratings are eligible to receive rebates from MassCEC and MassSave. Soon, heat pump systems will also likely be eligible to receive Alternative Energy Credits via the Massachusetts Alternative Portfolio Standard. A building owner should consult an HVAC professional to understand all of the rebates that are potentially available for a heat pump system. What is the overall lifetime cost (installation + operating) of the system? Building owners should consider both the upfront costs and the expected energy costs of the system over its lifetime, then compare that cost to alternative options. Currently heat pumps generally produce savings for buildings using oil or electric resistance heating, but they are slightly more expensive than gas systems. However, each building is unique and should be evaluated independently. 11

12 An owner should also consider specific characteristics of their building while considering heat pumps. Is the building too tall or too large for certain heat pump systems? All heat pumps have constraints on the max length and height of refrigerant lines, but VRF systems have far more flexibility. Any building over 50 feet tall will need to use a VRF system. Does the building have a floorplan that can be heated with minisplit heat pumps? The typical setup of a heatpump system is several wall units that delivery heat that specific point. This is different than a radiator system or forced air system, which typically serve every room. Careful consideration should be made for sizing and designing heat pump systems to serve the full area of a space. Modifications like partial ductwork are available, but they will be more expensive. When does the building's current heating system(s) expire? Most often, building heating systems are replaced after they fail. It is possible to proactively track replacement dates and decide to convert a system early prior to failure. If properly sorted, city-level permit data should make it possible to identify homes throughout the city with an upcoming replacement date. Is there solar PV on the roof of the building? If so, the building likely has lower electricity costs and a more environmentally conscious owner, both factors that increase the likelihood of adopting a heat pump system. However, an existing PV system also likely means that there is not much space left on the roof of the building, which might constraint heat pump placement. What are the existing electrical systems of the building? All buildings utilizing heat pumps need to have at least 200 amps of current, which means that older homes may need an electrical panel upgrade during installation. VRF heat pump systems require three phase power, which is usually only available to larger buildings with a commercial electricity rate from Eversource. Does the building have electricity demand charges? Buildings on a commercial electricity rate receive demand charges based on usage during the monthly electrical peak. This might make heat pump systems more expensive than a comparable system in a residential building. It is possible to operate the heat pump system in a way that avoids high usage during peak demand, but this requires a smart controls system that can turn off all systems centrally. If multifamily, does the building have master metering vs sub-metering? Buildings that currently have submetered independent heating systems may be harder to switch to a central VRF system, as the building owner will want to continue to have tenants pay for their heating costs. It is possible to submeter a central system using special metering built into controls, but this costs extra during installation. Is the building in a historic district or have aesthetic constraints? Certain neighborhoods may not allow the installation of heat pump outdoor units in visible locations. Is the building within a potential district energy zone? The Ramboll Low Carbon Energy Supply Study shows the potential for district heating in Kendall Square, Central Square, and Harvard Square. Residential buildings falling in these areas may be eligible to join a district heating network if it emerges in the future. This is not a reason to currently choose not to convert to a heat pump system, but it may become a consideration within 5 10 years. 12

13 IV. An Analysis of current heating systems in Cambridge residential buildings In order to understand how air source heat pumps can best be implemented across the city, this paper divided the Cambridge residential building stock into five categories based on size and other characteristics: 1-4 small unit homes, 5-49 unit medium size multifamily buildings, large residential buildings with over 50 units, mixed-use buildings with residential units, and institutional buildings with residential units. While every building is unique, these categories provide insights into the technical and decision-making processes needed to convert similarly sized buildings to air source heat pumps. A map of Cambridge residential buildings categorized by number of units is displayed below. To prioritize buildings for heat pump conversions, we used several technical and demographic factors: Existing fuel type: Does the building use electric resistance or fuel oil for heating? Existing heating distribution system: does this home have central ductwork? Heating efficiency of the building: What size heat pump does this building need? Existing Air Conditioning system: Can heat pumps add cooling capability to the building? Building height: Is the height greater than refrigerant line constraints for certain systems? Living area floorplan: Is this building amendable to a small number of indoor heat pumps? Ownership structure: Is this building owner-occupied, condo units, or rental units? Income of the building owner: Is money likely available to make the conversion? Racial demographics: Is this building a target for an equity conversion? Further analysis for each of these factors is included in the pages that follow and in the appendix. 13

14 Existing heat distribution systems in Cambridge residential buildings All heating systems have a source and distribution system. The heating source provides heat, and can come through hot water or steam (a boiler), heating hot air (a furnace), converting electricity to heat (electric resistance), or moving heat from one place to another (heat pump). The distribution system moves the heat created throughout the building, which can be piping and radiators, ducted vents in forced air systems, or refrigerant lines connected to indoor fan coil distribution units in heat pumps. In Cambridge, the Assessing Database contains one column called Heat SystemsType. This column provides information on the distribution system. We can infer the heating source from certain distribution systems; a system that uses steam or hot water requires a boiler (the most common option), and a system that uses hot air requires a furnace (the second most common option. The graphs below show the different types of heating source/distribution systems by count (left pie chart) and by gross floor area in square feet (right bar chart). Heat Distribution Systems by count (left) and gross floor area (right) 14

15 Existing fuel usage in Cambridge residential buildings About two thirds of all residential buildings in Cambridge are listed in the Assessing Database as using natural gas, although that number is likely much higher. If we assume that the 2263 buildings that are listed as unknown and the 309 buildings listed as combination also utilize gas, then 86% of residential buildings currently use natural gas. The assessing database may also incorrectly list buildings as heating with fuel oil when they have already converted to natural gas. As the City of Cambridge cannot access Eversource data, there is no easy way to confirm who uses gas for heating. Even with these limitations, the fuel type listing can be helpful in prioritizing certain buildings over others. The 59 buildings that still use electric resistance are the best candidates in the city to convert to heat pumps, as they already have strong electrical wiring and would immediately save money by switching to electric heat pumps. The 1479 buildings that heat with oil would also immediately benefit from switching to heat pumps, although they might have more expensive systems due to the need to upgrade the building s electrical systems. Given current low natural gas price, buildings that heat with gas will not likely see immediate financial savings economic benefits by converting to heat pumps. However, there are other benefits (such as central cooling and greenhouse gas reductions) that might incentivize a building currently using gas to make the switch. Heat Fuel Types by count (left) and gross floor area (right) 15

16 Existing central air conditioning systems in Cambridge residential buildings We have heard anecdotal evidence from heat pump installers, manufacturers, and residents that heat pumps are often installed primarily for cooling rather than heating. Thus, a building without central AC is a better candidate to adopt heat pumps in the short-term than a building with an existing central AC system. With this in mind, we sorted building types based on whether they currently have central AC. For overall building counts, this approach looks promising. 64% of residential buildings are listed in the assessing database as having no central air conditioning. However, examining the data by gross floor area and building type shows that most of the area confirmed to not have central AC is found in 1 4 family homes. The larger residential building types all have higher gross floor area without data or with confirmed central AC systems. It will still be helpful to target larger residential buildings based on whether they have central AC, but this is not as safe of a starting assumption for general marketing. Central AC Types by count (left) and gross floor area (right) 16

17 Prioritizing targeting of Cambridge residential buildings by existing heating system types By combining data on fuel types and central AC types, the Cambridge residential building stock can be prioritized based on buildings that will most benefit by converting to heat pumps. At the top of the list are buildings that currently heat with electric resistance, fuel oil or a combination of oil and other fuels (1881 buildings). After that are buildings that have gas heating but no central air conditioning (5654 buildings) and gas heated buildings without data on central air conditioning (2442 buildings). Finally, gas heated buildings with existing central AC (1147 buildings) are the lowest priority. Heat System Types of Residential Buildings by count (left) and Gross Floor Area (right) By adding in data on the heat distribution type, the prioritization can go even further. The table below contains a ranked order of these distribution systems for buildings with gas heat but no AC. The sorted database that contains prioritize Cambridge residential buildings is available as an appendix. 17

18 V. Pathways for moving Cambridge buildings to adopt air source heat pumps This section contains simple step by step guides show how each building type could convert to heat pumps. It also contains key things to consider for ownership structure while pursuing conversions. 1-4 unit homes steps for a heat pump conversion: 1. Sign up for energy audit via Cambridge Energy Alliance or MassSave 2. Complete the energy audit and get information on building EUI and peak heating need 3. Apply for heat pump via HeatSmart program (if applicable; if not, go to step 4) 4. Contact Heat Pump installer for home evaluation 5. Choose your system and desired level of heating / cooling coverage a. 50% supplemental heat b. 90% displacement (with existing system for backup on coldest days) c. 100% system replacement (must be sized for peak heating needs) i. Can be electric resistance backup if desire for no fossil heat 6. Apply for specific rebates / financing a. MassCEC rebates b. MassSave rebates + HEAT Loan c. (potentially) AEC pre-minting after APS revisions are approved 7. Have new system constructed 8. Receive training on proper operation of the new system a. Include a smart thermostat to automate best practices, integrate heating systems 9. Check in with building owner to ensure proper usage, satisfaction 10. If building owner is very happy, encourage them to be a community champion Ownership considerations for 1 4 unit homes: Owner-occupied single family homes This is the simplest scenario, as the home-owner is the only occupant and has full control over their building. To convert, the owner simply needs to purchase a heat pump system. Owner-occupied 2 4 unit homes If the owner lives in a small multifamily building (typically a triple-decker), they can decide to convert the building relatively easily and will also personally benefit. Condo units in 1 4 unit homes In theory, condo owners have complete autonomy over their particular space. This should make it relatively easy for them to decide to convert their heating system, but sometimes condo association rules can make this more difficult. Rental apartments with 1-4 units While this building size is a relatively simple conversion, the landlord will not have strong incentive to push the conversion if they will not personally benefit. One possible incentive is an increase in property value and rental prices that is possible because of the conversion. 18

19 5 49 unit residential building steps for a heat pump conversion: 1. Sign up for Multifamily pilot program energy audit via Cambridge Energy Alliance 2. Complete the energy audit and get information on building EUI and peak heating need 3. Receive specific heat pump advice from your Building Energy Coach a. Get help understanding VRF and GSHP systems b. Understand how these technologies can integrate with efficiency, solar, etc. 4. Contact larger Heat Pump installer for building evaluation 5. Choose your system and desired level of heating / cooling coverage a. VRF refrigerant heating + cooling b. VRF hydronic heating + cooling c. GSHP hydronic heating + cooling d. Backup systems (if desired) 6. Apply for specific rebates / financing a. MassCEC rebates b. MassSave rebates + HEAT Loan c. (potentially) AEC pre-minting after APS revisions are approved 7. Have new system constructed 8. Receive training on proper operation of the new system a. Include a smart thermostat to automate best practices, integrate heating systems 9. Check in with building owner to ensure proper usage, satisfaction 10. If building owner is very happy, encourage them to be a community champion Ownership considerations for 5 49 unit buildings: Condo units in 5 10 unit buildings As condo buildings grow in size, it becomes more difficult to convert independent units. However, buildings with less than 10 units still typically have independent heating systems. Condo units in > 10 unit buildings In larger condo buildings, the condo association typically manages and makes decisions over a central heating system. In theory a single condo can decide to make a conversion, but in practice this may not also be possible and the whole condo association may need to decide to convert. Rental apartments with 5-49 units Rental apartments within the 5-49 unit range fall in a difficult size range. Often these buildings are owned by a single landlord rather than a company, and the landlord may not have much support or incentives to improve the building. The new Cambridge Multifamily Pilot is working to change this. 19

20 50+ unit residential, mixed-use, and institutional building steps for a heat pump conversion: 1. Go through Eversource commercial retrofit process: masssave.com/en/saving/business-rebates 2. Receive coaching from Cambridge CDD via the BEUDO program 3. Contact larger Heat Pump installer for building evaluation 4. Choose your system and desired level of heating / cooling coverage a. VRF refrigerant heating + cooling b. VRF hydronic heating + cooling c. GSHP hydronic heating + cooling d. Backup systems (if desired) 5. Apply for specific rebates / financing a. MassCEC rebates b. MassSave rebates + HEAT Loan c. (potentially) AEC pre-minting after APS revisions are approved 6. Have new system constructed 7. Receive training on proper operation of the new system a. Include a smart thermostat to automate best practices, integrate heating systems 8. Check in with building owner to ensure proper usage, satisfaction 9. If building owner is very happy, encourage them to be a community champion Ownership considerations for 50+ unit residential, mixed-use, and institutional buildings: Rental apartments with > 50 units In large rental apartments, a rental company can decide to convert a full building to a new heating system. However this is a substantial undertaking and may not be possible outside of a gut rehab, which means the owner will not earn profit during the construction period. Large rental apartments are also subject to BEUDO and can receive substantial support from the city. Mixed use 1-4 units With mixed use buildings, there may be more than one heating system and usage pattern. The building owner may not personally benefit from a conversion. Mixed use rental with > 50 units This is a similar situation to the normal rental buildings with >50 units, but with the added complication of having an additional usage type within the building. Mixed use rental with 5 49 units This is a similar situation to normal 5 49 rental buildings, but with the added complication of having an additional usage type within the building. Institutional residential buildings If a building is owned by an institution like a university, it is fairly simple for that institution to decide to convert the building. But the institution would likely need to be incentivized to act. 20

21 VI. Estimating heat pumps sizing for replacing existing heating systems When replacing an existing heating system with air source heat pumps, detailed heating load calculations and building energy analysis is needed to properly size the system. However, it is possible to roughly calculate the heating capacity needed for a particularly building using the estimated space heating energy use intensity, the gross floor area, heating degree days, and the difference between a building s set point and the coldest outdoor temperature. The formula for this method is below: [(Building Gross Floor Area x Space heating EUI) / HDD x (Base Temp Coldest Temp)] / 24 hours 12 To simplify using this formula, this analysis uses the average heating degree days for Boston from : 5681 heating degree days per year. The base temperature for all residential buildings is assumed to be 65 degrees F, and the coldest temperature is the 99% design load temperature for Boston: 12 degrees F. This produces an estimate of the peak heat needed for all but 1% of the hours in a year. 13 According to an MIT study of Cambridge 1 4 unit homes 14 and the Ramboll Group, 15 space heating EUIs in Cambridge residential buildings range from 60 kbtu/sq-ft (inefficient) to 20 kbtu/sq-ft (efficient). Most homes fall within the range of 30 to 45 kbtu/sq-ft of useful space heat. The table below uses the formula and a range of EUIs to calculate what heat pump sizes are required for various buildings. The 50% HP capacity is simply the 100% capacity divided by 2. According to Mitsubishi electric, a 50% load heat pump should be able to provide adequate heating for 90% of the hours within any year See for more information 13 See 14 Validation of a Bayesian-based method for defining residential archetypes in urban building energy models. Energy and Building, November Sokol Julia, Cerezo Davila Carlos, and Reinhart Christoph. 15 Low Carbon Energy Supply Study Work Package 1, Appendix Conversation with Rick Hortz of Mitsubishi Electric Heating & Cooling. August 11,

22 VII. Incentives and Rough Costs for Air Source Heat Pumps in Massachusetts Massachusetts has several rebates and other financing incentives for air source heat pumps. These various incentives are described briefly below with more information available in the appendix. MassCEC Rebates for Heat Pump Systems: Building Type $ per unit or per 12 kbtu/hr Maximum Grant Base MassCEC Home Rebate $625 $2, % Income-Based Rebate $800 $3,200 80% Income + Electric Resistance $1,500 $6,000 Business / multifamily minisplits $625 $93,750 Public/non-profit entity minisplits $800 $120,000 Affordable housing minisplits $1,500 $225,000 Business / multifamily VRF $800; $1,200 heat recovery $180,000 Public/non-profit VRF $1,000; $1,400 heat recovery $210,000 Affordable housing VRF $1,600; $2,000 heat recovery $250,000 MassSave Rebates: Heat Pump Type $ per indoor unit Maximum Grant Inefficient heat pump $100 $500 Efficient heat pump $300 $1500 Ducted heat pump unit $500 $1500 Custom business retrofit measures Up to 75% incremental costs unclear MassSave Financing: Financing program $ per indoor unit Loan Term MassSave HEAT Loan Up to $25,000 0% for 7 years Financing for Business Up to $500,000 0% for 7 years The Massachusetts Alternative Portfolio Standard will soon also provide an additional incentive for heat pump systems through alternative energy credits (AECs). For small residential systems, credits will be forward-minted for the projected renewable thermal energy to be generated over ten years of the system. To qualify, a home must use heat pumps for at least 90% of its annual heating load. The number of AECs awarded through the APS program will vary based on house size, heat pump system capacity, and house efficiency. Assuming that the AEC value will be near the current maximum paid by utilities, the value of the total incentive will range from roughly $1050 / 12,000 BTU/hr to $2700 / 12,000 BTU/hr of capacity. Larger heat pump systems will be awarded based on real-time metering. While each building s heat pump costs will vary dramatically, cost estimations for five sizes of buildings are included below based on pricing from Somerville s Heat Smart Campaign and VRF pricing ranges. Building Typology Building Size (sq ft) Typical Heat Pump system 100% HP capacity* Base cost Current Rebates Future APS Credits SF Home 1,500 1 multi-zone unit 17.5 kbtu/hr $11,300 $1,300 ~$1,560 3 units 3,600 3 multi-zone units 42 kbtu/hr $33,900 $3,900 ~$3, units 18,000 1 heat pump VRF unit 210 kbtu/hr $216,000 $14,000 ~$1, units 60,000 4 heat pump VRF units 700 kbtu/hr $720,000 $46,667 ~$64, units 150,000 9 heat recovery VRF units 1750 kbtu/hr $2,250,000 $175,000 ~$161,940 *assumes 99% heating threshold of 12 F and that all buildings have a useful heat Energy Use Intensity of 30 kbtu/sq-ft 22

23 VIII. Highlights of other cities efforts at promoting air source heat pumps Cambridge can learn from the leadership examples of Somerville, Boulder, and New York City. Each of these three cities has developed innovative ways to accelerate heat pump adoption. Somerville, MA: Somerville launched a HeatSmart campaign for air source heat pumps at the beginning of August Their campaign exclusively targets 1 4 family homes and has two installers. Households participating in the campaign can choose from five single-zone and five multi-zone heat pump offerings. See more about the Somerville effort at somervillema.gov/departments/programs/heatsmartcoolsmart-somerville Boulder, CO: Boulder developed a comprehensive renewable thermal strategy for single family homes. Central to the strategy is a 4-D Model that combines building archetype models with assessing data, permit data, and other sources. This dataset allows Boulder to track to expected replacement date for heating systems across all single family building homes, allowing the city to conduct precisely targeted outreach. New York City, NY: The Buildings Technical Working Group for New York City analyzed the full portfolio of NYC buildings by heating system type and heating energy use intensity. They also modeled deep retrofit pathways with an air source heat pump electrification option for 7 building archetypes. This deep analysis will allow New York City to conduct short-term targeted interventions and plan for changes over the next 33 years. 23

24 XI. Recommendations and Conclusions Cambridge can implement the following specific recommendations to accelerate the growth of air source heat pumps within the Cambridge residential sector: 1) Use HeatSmart-style outreach for 1 4 unit homes Community-oriented marketing has proved very effective for solar growth in Massachusetts. With Somerville and Northampton already initiating HeatSmart campaigns, this is an ideal time for Cambridge to join the movement for renewable thermal. Cambridge can choose to apply for and utilize the support of the new MassCEC HeatSmart Mass program, a facilitated approach with pre-made materials and built-in support. Alternatively, Cambridge can choose to create a custom program similar to Sunny Cambridge that utilizes a full marketplace of heat pump manufacturers and installers. Regardless of the decision, Cambridge should utilize HeatSmart marketing strategies and a defined timeline to spur excitement within the community and increase the urgency with which homes adopt the technology. 2) Train retrofit coaches in heat pump technologies for 5 49 unit buildings With the Multi-Family retrofit pilot now fully underway, Cambridge has an opportunity to help coax the collection of medium multifamily buildings undergoing changes towards changing their heating systems. The retrofit coach is a particularly good partner in this endeavor. Cambridge can use the air source heat pump technology guide and other materials from this report to train the retrofit coaches and provide ongoing support to building owners who want to explore converting to heat pumps. 3) Work with BEUDO buildings to think through deep retrofits + heat pump conversions For large multifamily buildings that report under BEUDO, Cambridge should provide custom support in exploring pathways to convert to VRF heat pump systems. Technical members of the Cambridge Climate Protection Action Committee can potentially serve as a starting point for a technical advisory group to support these buildings. In addition, the new MassCEC commercial program can provide guidance and advice to buildings who want to understand VRF technology and the options available for rebates. 4) Work with the assessing department and inspectional services to improve the data tracking Throughout the course of this study, it became apparent that improving the Cambridge assessing database entries for building heating systems would greatly help with targeting and outreach. The current assessing database is missing many entries, and it is unclear on the accuracy for fuel type (particularly for homes utilizing fuel oil). The Cambridge permitting database is also difficult to search when identifying changes in heating systems. Cambridge would benefit from undertaking a systematic revamping of heating system assessment and data management in order to create an easily searchable database of buildings by heating systems and expected heating replacement dates. With such a system, the city would be able to engage in targeted outreach and help building owners choose an air source heat pump system at the time of existing system replacement. 5) Integrate heating system conversions into the overall Net Zero Action Plan If Cambridge is going to achieve net zero building emissions by 2040, it is imperative for a renewable thermal strategy to be at the core of the city s planning and future work. The current net zero plan is based on a excel model that segments emissions from different building types and shows a systematic decline over time. However, these emissions are not attributed to any particular fuel type, and it is unclear whether reductions come from efficiency or from fuel switching. The forthcoming Ramboll Low Carbon Energy Supply Study technical report will explore building energy options in more in-depth. This paper recommends utilizing the analysis covered by Ramboll and the data from this report to create a revised model of greenhouse gas reductions that explicitly incorporates renewable thermal technologies. This model could be updated regularly as a way to track progress on emissions reductions. Eversource, MassCEC and Massachusetts DOER could be sought out as partners in this effort. 24