U.S. DOE Announces A Ten-Fold Increase In Funding For Residential Weatherization Assistance And Conversion To Electric Heat Pumps

The Biden administration on Wednesday announced plans to spend roughly $3.2 billion to retrofit hundreds of thousands of homes in low-income communities in order to slash residential energy bills and greenhouse gas emissions.

            Pennsylvania is due to receive $186 million in this round.  Read more here.

The unprecedented 10-fold increase in annual funding for the Department of Energy’s (DOE) Weatherization Assistance Program (WAP) is the largest since the program began in the 1970s, as a way to lower residential heating costs.

The funding increase means WAP will be able to serve 450,000 households this year, up from the 38,000 homes served under average annual funding formulas.

The $3.2 billion in WAP funding was authorized under the $1.2 trillion infrastructure bill signed into law last year. WAP is a federal program providing grants to states to modernize eligible homes with energy cost-effective upgrades such as attic insulation, swap out of old appliances for more energy efficient models, and the replacement of drafty windows and doors.

A substantial portion of the $3.2 billion in weatherization funding is earmarked for helping homeowners switch from traditional gas or oil-burning furnaces to electric heat pumps.

According to the DOE, energy efficient electric heat pumps can heat and cool homes at a much lower cost to the environment and slash the use of fossil fuels for home heating and electricity generation.

However, installing air conditioning in homes throughout the country may actually increase summer loads as more people use air conditioning.

Also, when heat pumps are installed, the existing combustion appliances are often left in place.

In that situation, homeowners may continue to use their fossil fueled appliance in the winter as it provides better heat, and depending on electric prices versus oil and gas, it may actually be cheaper and usually the heat is preferred by customers.

This program may benefit many service companies as it will spur the installation of heat pumps and provide work in the summer for these companies.

Whether and how much demand will be suppressed for heating oil is an open question.

And more importantly, depending on the source of the electricity (hydro, gas, oil, nuclear), overall emissions of greenhouse gasses may increase.

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