The heat pump tax credits in the Inflation Reduction Act may well lead to a surge of installations of a type of heat pump system that isn’t exactly new, but hasn’t been widely used so far. Known as a dual-fuel system, it combines a heat pump with a natural gas furnace, and it’s an inexpensive way to electrify (at least partially) existing homes. When an air conditioner fails, it can be replaced with a heat pump for little to no more cost than buying a new air conditioner. The existing furnace would be left in place to backup the heat pump on extremely cold days, but the furnace’s work needn’t be limited to backup duty.
A benefit of dual-fuel systems is that on a call for heat they can run either the heat pump or the furnace, depending on which one happens to be more beneficial at the moment. For example, when renewables like wind and solar are the dominant power sources on the grid, the system would choose to run the heat pump. If, at another moment, the cost of electricity is especially high, perhaps because it’s during the on-peak period for a time-of-use rate, the system could choose to run the furnace. A dual-fuel system thermostat could either minimize carbon dioxide emissions or utility costs, by continually evaluating grid cleanliness, heat pump efficiency, and utility costs, and choosing between the heat pump and furnace—at least in theory.
In practice, though, thermostats that would enable these operating modes don’t exist yet. Current dual-fuel thermostats switch between the heat pump and the furnace based on temperature and aren’t capable of making such complex decisions. As a result, dual-fuel system owners, and indeed all of us, are only getting a portion of the benefits available.
We already have most of the technology needed to make thermostats capable of minimizing emissions or costs, but a few key elements are lacking. To learn what those elements are, what groups are working to develop these thermostats, and when they might be ready to put a product on the market, please read my post by clicking here.