Jeff Lyng, area vice president for energy and sustainability policy at Xcel Energy, sat down with The Denver Gazette for a discussion about novel new research on the performance of air-source heat pumps in Colorado’s climate.

The unique research, in partnership with the National Renewable Energy Laboratory (NREL), aims to determine the viability of heat pumps for space heating and their potential for reducing greenhouse gas emissions. The study found that air-source heat pumps perform up to 10% less efficiently at higher altitudes and cannot heat effectively at temperatures below 40 degrees.

Denver Gazette: When did this research begin?

Jeff Lyng: We started working with NREL in the fall of 2021 and put in place a project in which we really committed to evaluating heat pump technology at the thermal test facility in Golden, Colorado.

We’re finding that electrification of heating holds great promise and we’re very much in support of the state’s beneficial electrification goals. We’ve also learned as part of this research (about) some of the limitations that heat pumps have. And so, we’re bringing that learning and it informs the design of the Clean Heat Plan strategy that (Xcel) will file with the commission on Aug. 1.

DG: Do you think that the heat pump idea is viable in Colorado? I read through the report, and it indicates that there’s some serious issues with heating in the winter. I noted that it said that people at high altitudes and in cold areas may need electric or gas supplemental heat in the winter. Doesn’t that kind of defeat the purpose of having a heat pump?

Lyng: Well, you’re zeroing right in on the important results of the study. I would say this. We do think heat pumps can deliver a significant amount of heating and emissions reduction in a reliable and affordable way when it’s relatively mild outside – the spring and the fall. We have to think about the most extreme conditions, right, though when it’s coldest out in the wintertime, and given where the technology is today, we do think customers are going to need some form of backup. They’ll need to keep or maintain their existing gas furnace or boiler for those really, really cold temperatures.

And I think the NREL results, as you point out, highlight a few things. First, they demonstrate that much of this technology is tested at sea level. Of course, we’re not at sea level in Colorado and in Golden – they see a degradation in performance due to less dense air, about a 10% decline in capacity and efficiency.

We have not yet looked at data of how the units perform in the field, and that’s our next step. So, we’ve got about a dozen customers who have partnered with us and contractors who have partnered with us in the Front Range who have agreed to share their performance data for their heat pump, as well as their own personal experience, their customer experience, having that technology in their home.

What we’re also going to do is install heat pumps at a test facility, a trailer in Leadville, Colorado, which is quite a bit higher in elevation yet still to see, again, how do they perform in real world applications.

But based on what we know right now and where the technology is today, which we have to be really clear-eyed about and realistic about, heat pumps do suffer a degradation performance at colder temperatures and that temperatures below zero, even cold climate heat pump technology ceases to operate as a heat pump and really operates more as an electric resistance technology, which, to us as grid planners, we need to think about. And what does that do to increase the electric demand in the wintertime from our electric system, the generation, the transmission, the distribution associated with that? … We think especially for existing homes, the best approach is probably a heat pump, plus the existing gas system for really, really cold temperatures.

DG: Do you have any quantification of how much (benefit), by way of carbon output, that this kind of combined system with natural gas, the supplemental heating and heat pump might produce?

Lyng: We’ll get to an 80% or 85% emissions reduction by 2030, but we’re not at zero yet. So, some of these emissions shift into the electric side of the business, as well. We do think it leads to lower emissions, but we’ve got to do the balance, if you will, of the remaining gas and the emissions associated with the electric system. … But as we’ve talked about, it’s got its limits and that’s where we think we need other things like clean fuels, hydrogen, renewable natural gas, as well as a lot more natural gas energy efficiency.

DG: Is there any quantification of the costs of installing these air source heat pumps?

Lyng: I think a typical average cost that we’re seeing is about $20,000. And now it’s going to vary. The mini-split systems – the systems that are more designed for a single room or a single zone are a little bit less expensive – but you might need more than one of them to heat an entire home. Centrally-ducted systems are a little bit more expensive, but of course they’re designed to heat an entire home.

We’ve been offering incentives now for a few years, a $2,000 rebate. We have a proposal in front of the Public Utilities Commission to increase that to $2,200. There are a few other incentives that are about to be available, and it’s kind of a once-in-a-generation moment in terms of the federal investment through the Inflation Reduction Act, which will have additional incentives made available through the Colorado Energy Office. … On top of that, there also is a federal tax credit, so we think we can take a significant bite out of the cost, but there’s no question as you point out, this is a significant household investment to electrify heating.

DG: It kind of sounds like pushing a boulder uphill to convince people to spend what, $15,000 to $20,000 to install a heat pump when they already have a gas furnace.

Lyng: You raise, I think, a really valid point that, if customers that have existing gas systems that are operating (and) haven’t reached their remaining usable life, it’s quite a lot to expect that they would take out an existing system that’s working and electrify it. And that’s why we think a better approach for scale is when a customer is replacing their air conditioning, rather than put in a new air conditioner with higher efficiency, that’s a great opportunity to install a heat pump or to consider doing it.

DG: Would the heat pumps work in tandem with a gas heating system in extreme cold weather?

Lyng: I would say it’s a continuum at relatively mild temperatures, say above 40 degrees Fahrenheit. A heat pump might typically be able to supply all of the space heating needs. At lower than that, you’re going to see more dual-system operation, where the heat pump is running, or the gas furnace or boiler also kicks on. So, you’re running two heating systems at very, very cold temperatures.

DG: What specific heat pump are you using for this testing?

Lyng: We tested two. They’re both by the same manufacturer – Bosch. We tested a mini-split system as I described, which has more of a wall diffuser. It’s more for single zone. And we tested a centrally-ducted system. There are a number of other manufacturers, including Mitsubishi and others, that we’ll get data from. But in the lab, we tested with Bosch.

DG: Do you do plan to verify these results by testing other manufacturers units?

Lyng: Yes, in the field, we’re absolutely going to do that.

DG: And how long do you think it’ll be before you get these results back in, or are you hanging it on Bosch right now?

Lyng: We have statutory deadlines that we have to achieve in order to be compliant with the clean heat standard. So, we move forward, nonetheless. We’ll file a plan Aug. 1, and then as I mentioned, we have statutory targets to begin to hit in 2025, in 2030 … We will have results next spring of the mountain systems in Leadville, and we’ll have results sooner than that from the front range systems.

DG: Is this a unique research that Xcel is doing, and has this been done before?

Lyng: It’s very unique. What we’re trying to do here is lead in evaluating how technology works in our climate. One thing to look at is how a piece of equipment performs in test conditions at sea level, but we’re not at sea level. We’re in Colorado … And so it’s brand-new research that we’ve done working with NREL … The lab itself had to be reconfigured to be able to simulate Colorado’s temperatures to even allow us to test this.

DG: And is Bosch involved in this to the point where they’re looking at using these results to try to re-engineer their devices to work better in cold temperatures and high altitudes?

Lyng: Bosch is directly involved in this research, and the manufacturers are all trying to improve their performance. I think what will be interesting to see is how much innovation happens to serve high mountain climates and how much the market actually develops here.

Editor’s note: This story has been edited for brevity and clarity.