Impacts of electric-driven heat pumps on residential electricity consumption: An empirical analysis from Arizona, USA

Abstract

Heat pumps play an important role in the electrification of the residential sector. The electrification of building energy consumption can have a significant impact on the load management of the electric grid. This study provides the first empirical investigation of the changes in hour-of-day loads after adopting heat pumps. We apply unique hourly electricity data for 13,010 residential consumers in Arizona during 2014–2019. Statistical matching, fixed effects regression, and difference-in-differences approach are applied to analyze electricity consumption. Contrary to the predictions from engineering models which indicate energy savings after heat pump adoption, our main analysis suggests that heat pumps do not necessarily save electricity for cooling and heating in Arizona. Besides, we also quantify the increase in electricity consumption when switching from natural gas furnaces to heat pumps. The increased environmental damages from electricity changes are estimated to be $0.59 per household during the summer and $1.64 during the winter. This also indicates an increase for electric loads by 8.8 (2.7) MW in the winter (summer) if all SRP utility consumers shifted to heat pumps. The findings have implications for the energy performance of heat pumps at households. The results could also help improve the sustainability of the electric sector, which can integrate more clean energy into a smarter grid.