Installations of heat-pump systems rose 14% on LI last year

As Printed in Newsday
By Mark Harrington
February 5, 2022

Stephen Ferrante of South Huntington didn’t realize he was in the market for a heat pump.

But in 2019, after getting an estimate for a new central air conditioning system, he was told by a contractor that rebates and other incentives would enable him to add a heating component to the system with only a slight increase in the $15,500 cost and his system would be even more efficient. So he gave the go-ahead and has never looked back.

"It’s been like finding money in the street for me, that’s how I feel," he said. "No matter what I do, it’s saving me money."

PSEG Long Island says programs such as those Ferrante took advantage of helped increase installation of heat-pump systems by 14% during 2021 over the prior year, with 4,677 systems installed with a utility rebate last year compared with 4,091 in 2020. (Only 2,528 were rebated in 2019).

The systems aren't for everyone. Older heat pumps weren't efficient below 30 degrees, and even some newer customers such as Ferrante are encouraged to keep their old fossil fuel systems in place. While costs can quickly pile up (one 4.5 ton system priced by Newsday had a $29,000 price tag, including duct work), there are new low-income incentives that can cover most or all of the costs.

Heat pumps are more efficient than fossil fuel-based systems, but it's important to understand that customer electric bills will go up when a new system is installed. The benefit comes when the old fossil fuel-based heating system is not used, and heat pumps are more efficient than gas or oil systems, so overall savings should be greater, experts say.

For those like Ferrante looking to replace an old central air unit or buy a new one, the advantages can be hard to pass up.

In addition to $4,000 in rebates, Ferrante gets cut-rate electricity during the heating season from a PSEG program that reduces the charge for those who heat with electricity. And he wasn’t penalized for keeping his old gas heat system because of special software he installed, which is also rebated, to integrate the heat-pump and gas heat systems.

While experts say newer heat pump systems are effective at heating homes down to zero degrees, Ferrante's system has been set so that the gas heat system kicks in at 40 degrees. He explained that his unusual circumstance is needed because the gas heat system still uses water-based radiators that could freeze pipes in walls as temperatures drop. Heat pump energy, which operates as a central air conditioning system running backward to produce heat, is used most of the time, and it’s considerably more efficient that fossil fuel heat, experts say.

Mike Voltz, director of renewable energy and efficiency programs for PSEG, said the number of new heat pump customers on Long Island last year was even higher when accounting for the more than 1,000 heat-pump water-heating systems and swimming pool heat pumps sold last year. Heat pumps are an all-electric technology that can efficiently cool a home in summer, then operate in reverse in winter, heating homes and buildings through ducts or units called minisplitters mounted on a wall.

Until recently, the systems were both expensive and not always up to snuff. Older systems worked well only to around 30 degrees, but newer ones like Ferrante’s go to five below zero, Voltz said.

Rebates cover around a quarter of the $12,000 to $16,000 cost to buy the equipment and install the systems, but Voltz noted new programs for low-income customers can cover up to 80% to 100% of the costs. National Grid is also offering programs for the systems.

Not everyone is as ecstatic as Ferrante, however. North Babylon homeowner James Muller in 2019 paid $27,000 for a system that included insulation work and didn't realize the higher electric charges he'd been racking up by switching from his old oil heat system until PSEG hit him with a bill for $3,700 in back charges and threatened to turn off his power. The problem was not only that PSEG didn't automatically switch him to a lower electric-heating rate, but also didn't update his balanced billing to reflect his new usage, so he didn't know he'd been racking up considerably higher bills until it was too late. (The utility did refund him retroactively for usage billed at the higher rate, but he's still paying off the overage he owes, he said.)

Reached last month, Muller said, "I do not feel the system works very well if it is very cold. Oil is much better when it drops below 30 degrees." But he’s been trying to use the system more now that heating oil is averaging $4.02 a gallon on Long Island. In summer, he said, the AC system works fine.

"It definitely did not live up to the expectations, at least with the heat," he said. "It definitely works well in summer though, it definitely brought those costs down, so I will try to look on the positive side there."

PSEG now automatically switches customers to a new lower winter heating rate Muller should have been on from the start, the minute they apply for heat pump rebates, Voltz said. And Muller is still paying around $500 a month to pay the past-due bill that failed to account for his electric heating use on a balanced billing plan, he said.

Ferrante said the only downside to his system is that while the gas heating system is two zone, the heat pump is one zone for his one-story ranch style house. And while his electric bill has gone up, the gas bill has gone down, as has the gas usage. "It’s definitely been a positive experience," Ferrante said.

Neal Lewis, executive director of Molloy College’s Sustainability Institute, said experiences like Muller’s are the exception, especially with newer technology allowing heat pumps to work in colder climates — some below 18 degrees, he said.

"This old thinking that heat pumps only work in mild temperatures is, we believe, outdated thinking," he said, noting that what’s needed now is better marketing and education.

Heat pumps have "not yet caught on at the levels needed to get the kind of transformation we need of our energy system in terms of our goals for reducing climate-changing CO2 emissions," Lewis said. "So there’s a lot of work cut out for us in terms of awareness."