The following is a contributed article by John Farrell, co-director of the Institute for Local Self-Reliance.
When President Joe Biden invoked the Defense Production Act last week to speed the production of several energy-saving technologies, he tested the limits of his executive power to get these cost-saving devices to market. The president’s action will cheer many of us working toward low-cost, low-carbon heating for homes and businesses. We also desperately need a complementary effort to collectively address the adoption and implementation of these technologies, to seize the opportunity in the president’s action.
One of the technologies included in President Biden’s invocation of the Defense Production Act is an appliance called a heat pump. If you have a refrigerator, you have a heat pump — an electrical device that moves heat from one place to another. If you’ve stayed in a hotel room, you may have had one under the window, able to produce heating or cooling.
A heat pump is a highly efficient tool designed to replace existing building heating and cooling from gas furnaces, boilers, and air conditioners. Because it can run exclusively on electricity, it can be powered entirely by clean energy sources. In many places across America, heat pumps already cool and heat buildings less expensively than other options. But widespread, uncoordinated adoption of heat pumps (especially in states with cold winters) will result in higher energy costs for both those that have them and those that don’t, with particularly bad outcomes for low-income Americans. There’s a better way.
Pioneered by a nonprofit in Massachusetts called HEET, “geothermal micro districts” create a neighborhood of heat pumps, each connected to a common network of underground pipes that tap into the earth’s constant underground temperatures. This network dramatically increases the efficiency of the connected heat pumps. This network approach can also solve multiple problems created if we follow the individualistic model of technology adoption.
For example, millions of urban homes in the U.S. get their heat by combusting methane gas in a basement furnace. If heat pumps are adopted on an individual basis, it gradually reduces the demand for gas without shrinking the size of the gas distribution system, shifting the costs of maintaining the gas network to everyone else who is still reliant on gas. An uncoordinated transition will cost Americans billions more to maintain a legacy gas network that becomes less relevant every year.
The individual approach also has a secondary cost that everyone will pay — ballooning costs on the electricity system. Individual heat pumps that use the air instead of the ground as a thermal source become much less efficient at low temperatures. In Georgia or Arkansas, this is a minor issue. In Minnesota or Maine, it means that thousands of heat pumps will sharply increase electricity demand during cold snaps. Power systems built for summer air conditioning load will suddenly need to be rewired for huge demand in January. Again, costs will rise for all customers.
These two costly network effects will impact low-income customers and communities of color the most. They are least able to afford to buy a heat pump and often face barriers to energy efficiency programs that require individual customers to front the money for improvements. An individualistic transition to cleaner building heating and cooling will not only be costly but also unjust.
The collective approach of geothermal districts solves the problems posed by an individual-driven transition to clean building energy. For starters, the geothermal heat pump network can be built as a coordinated replacement for the gas network, cutting the size and cost of the legacy gas system. Second, geothermal heat pumps are far more efficient in cooler climates than air-source ones (and even better when networked together), so they can sharply reduce the need for costly electricity system upgrades. Finally, as a new technology and network, geothermal micro districts allow communities and states to set the terms of the market before incumbent gas or electric utilities replicate the gas system’s economic and environmental injustices.
Cities can and should be the nexus for this collective action due to a powerful tool at their disposal. In most cities, energy utilities must sign a “franchise” contract for the right to provide services in public alleyways and under public streets. It’s the one key local leverage point in a system that otherwise relies on state oversight of monopoly utility companies (with sometimes tragic consequences, as demonstrated with the Texas Freeze or First Energy’s Ohio bribery scandal). With the leverage of the franchise, cities can set the terms and address some key questions in our building energy transition.
One, who will own this new heating network? Most cities already have a public utility that runs pipes to every home — a water utility. The technology in a geothermal network is basically the same: pipes and pumps. Cities could open up a new source of revenue by selling heating and cooling, even as they coordinate a transition from dirty fossil fuel systems to a clean geothermal one. Alternatively, they could offer a limited-term license to the existing gas utility or competitively bid off sections of the city into several geothermal networks.
Two, how will the new heating network deployment be fair and equitable? Right now, millions of Americans struggle to pay their energy bills. The poorest people live in the leakiest homes, and the programs to help people cut their energy bills don’t work for folks without sufficient cash or borrowing power. But if a city is expanding a geothermal energy network to every home, it can also finance every connected energy system. It could help pay for the network, the heat pump, home insulation, rooftop solar; anything that could help residents and business owners pay their energy bills could be financed by the utility. It could even provide financing for replacing other gas appliances, from dryers to stoves, that have to be swapped out for the gas network to be retired. All of this could be financed on the new heating/cooling bill, and tied to the building.
Three, how will this transition be coordinated? Cities can make the connection between gas network retirement and geothermal network expansion to avoid costly maintenance of two, overlapping building heating networks. Mayors and city councils can work with community leaders to go one neighborhood at a time, replacing aging gas infrastructure with new geothermal pipes. They can prioritize marginalized communities. They can coordinate with street rebuilding. This can be done.
The president’s action to accelerate heat pump deployment is timely and necessary. But it must galvanize city, state, and climate solutions leaders to act to avoid the high costs of uncoordinated, individual action. Our existing energy systems, gas or electric, are collective solutions to our community’s needs. Our transition to cleaner buildings must be as well.