The adoption of ground source heat pumps at multiple scales in North America

Abstract

In North America, space heating, hot water, and air conditioning use more secondary energy thanany other activity within buildings, thus emitting the majority of scope 1 and scope 2 GreenhouseGases (GHG). The Ground Source Heat Pump (GSHP) uses one-third the energy of traditionaltechnologies to provide space conditioning and hot water services.While GSHP is a well-established technology, the energy savings and lower GHG emissionshave not translated into their widespread adoption. Public policy measures and financialincentives adopted to promote GSHP have failed to lead to broad adoption or lower costs. Thisthesis examines the adoption of GSHP in response to supportive policies among residential,institutional, and city-scale adopters.Detailed site-level and panel data permit natural experiments on the response of residentialadopters in Canada and the US to changing incentives. At higher scales, regulatory proceedingsconcerning the offering of Thermal Energy Services (TES) has provided a case study for analysisof utility models to finance GSHP for commercial and institutional clients.In Canada and the US, financial incentives failed to sustain the adoption of GSHP throughout orafter the period of subsidy among residential households. Neither did incentives lead to adecrease in price over time. Free-ridership problems in Canada and an inability to make inroadsto areas served by natural gas have stranded GSHP technology. Further, the capital cost ofGSHP results in a higher lifecycle cost than most alternatives. The economy-wide benefits offinancial incentives for GSHP are limited in Canada, where most heat pumps are imported.iiiTES provide compelling innovations to bridge barriers at higher scales. TES overcome balancesheet constraints on debt common to public sector organizations by financing capital equipmentand renovations as utility payments. TES can overcome capital constraints faced by developersby financing equipment inside the building lowering construction costs. However, our casestudy of public procurement reveals TES to be a costly approach in the long run. The insightsfrom this research are translated into best practices and policy advice to improve contracting,increase awareness, and align incentives for greater efficiency.