Red Tape, Hurdles Slow Rollout of R.I.’s Income-Eligible Heat Pump Program
March 11, 2024
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NEWPORT, R.I. — Sam Westman can’t wait to get away from home heating oil.
Westman is a longtime Newport resident; he’s owned his home, just blocks from Newport Hospital, since he was 17, after inheriting it from a family member. His two-floor house dates back to the 19th century, and has an aging furnace in the basement that Westman said he’s looking to replace with a system of electric heat pumps.
His hot water heater is already electric, and he has concerns about some of the fumes coming from his furnace. Westman’s daughter, born premature, has a severe case of asthma, and switching to electric heat could improve the air quality in their home.
In October, just a month after it launched, Westman applied for the income-eligible incentive in the Clean Heat RI program, the state’s new financial assistance fund for homeowners and businesses currently using propane or heating oil looking to make the transition to electric heat.
His household was already enrolled in Rhode Island’s Low Income Heating Assistance Program (LIHEAP), which qualified him automatically for the income-eligible incentives. The incentive covers the cost of the heat pumps and installation.
“It was not affordable to me without the Clean Heat income eligibility program,” Westman said.
Despite being live for six months, the rollout of Clean Heat RI’s financial incentives for income-eligible residents is slow. Gov. Dan Mckee announced in 2022 he was allocating $25 million in American Rescue Plan Act funds to create the incentives.
The program has paid out 747 rebates since September, totaling just over $5 million. Only six of those, however, have been to income-eligible homeowners. An additional two are listed as reserved, meaning the homeowners are in the design state, but no money has been issued.
The program notably excludes a huge swath of the state; it’s currently only open to homes and businesses that heat using propane or heating oil. More than half the state relies on natural gas for heating, and those homes are not eligible for the program’s incentives.
Unusually for the program, Westman’s application has taken more than five months. His home’s electricity panel and infrastructure need to be upgraded; they can’t carry additional power to a new heat pump system. The program only pays $3,000 to upgrade electrical service, and the program administrators, said Westman, are being careful about gathering enough quotes.
“The rebates are big, they really incentivize,” said Craig Clark, owner of Ocean State Air Solutions Inc., a HVAC company based in Portsmouth. “Heat pumps will outperform oil or propane in terms of energy efficiency.”
Clark, who has owned Ocean State Air for nearly 20 years, said the new heat pump incentives are really driving business. According to Clark, his business grew by 40% last year, and he expects it to grow by another 30% this year as the heat pump incentives continue to roll out.
His company handles much of the process for applicants, from the initial estimates to processing the paperwork after installation to ensure customers get their rebates.
An average install in a split-ranch home using 36,000 British thermal units of energy (BTUs), said Clark, costs between $20,000 to $24,000. Homeowners in the regular incentive program can reduce the cost by over $6,000 after state incentives, Rhode Island Energy incentives, and tax breaks.
The Clean Heat RI program has supercharged the incentives, according to Clark. Prior to its launch last year, the only incentives for a long time were smaller and offered by the utility, Rhode Island Energy and before that, National Grid. The rebate was only $350 per ton, and there was more red tape, he said.
“It was a little bit more stringent,” Clark said. “You needed an energy audit, you had to have certain things done to get the $350 per ton rebate, so there was a backlog there and there was a bottleneck. We had all these customers, but they couldn’t get approved until that stuff happened.”
Ocean State Air is on the master list of contractors kept by the Clean Heat RI program, but Clark has an added advantage; he’s also on the much smaller, more exclusive list of contractors who work with the program’s income-eligible applicants. The company is the one Westman is currently using quotes from as he navigates through the state program.
Robert Beadle, a spokesperson for the state Office of Energy Resources (OER), said acceptance into the smaller, specialized group was by invitation only, according to a specific set of criteria and ability to meet the program’s standards. Among the “top contractors” identified by OER include Ocean State Air and Restivo’s Heating & Air Conditioning. Beadle noted OER is expanding the list of contractors to be more inclusive.
“This carefully considered approach ensures effective service to our income-eligible customers while stewarding program funds responsibly,” Beadle said.
Clark said he views his job more as educating people on heat pumps rather than selling them. Most people, after a short pitch, understand how far the technology has come and the benefits it provides to homeowners.
“It’s fun to go into someone’s old house and say, ‘I can save you three times on your electric bill, guaranteed,’ because that’s just your toaster running on the baseboard and [heat pumps] are three times more efficient,” he said.
For Westman, getting a heat pump wasn’t much of a sell. He had been keeping an eye on what heat pumps could do, and what the state was providing in terms of incentives. Even with recent volatile electric prices, Westman said he expected to save up to $1,200 annually on his electric bill once everything was installed.
His stepmother’s brother, said Westman, was one of the first net-zero energy home builders in the state, and he had few misconceptions about heat pumps. “Them being part of my family,” he said, “I understood where the technology was.”
Despite being in the program since October, Westman said his application is still in the planning stages. The electrical panel to his home has been maxed out and can’t support any additional electrical needs without upgrading the infrastructure to carry more power to his home. He has received a quote from Ocean State Air, but the rebate program managers have asked for additional quotes.
Westman said in addition to the savings and cleaner air, reducing his home’s emissions is a big plus.
I would go slow on this because the evidence in Great Britain indicates that these heat pumps don’t deliver like they say that they do.
I’ve had a heat pump as a ductless mini-split and a domestic hot water heat pump in my home for the past 4 years. Both are extraordinary in their efficiency and cost per BTU. I will never go back to heating water with fossil fuels. When I installed the mini-split, I had an option of signing up for the incentive. The paper work was not the issue. The time delay was not the issue. Having a state approved vendor to do the installation added an additional $1200 to the cost of installation. Far above the cost savings of the incentive. I decided not to go the route of the state sponsored incentive program. The installer was recommended by the equipment vendor and I called around to check on his credentials. The installation went well and was seamless with the rest of my improvements to the house. I understand the need for a credentialed installer and I understand the need in case something happens to the unit. But most installers I have met over the years are reliable and trustworthy. With social media and the “I know a guy” attitude in Rhode Island, and if you get recommendations from the folks to sell the equipment, you should be ok. Even state approved vendors make mistakes. The incentive program has to be less cumbersome: perhaps sending the check directly to the equipment vendor for the cost of the equipment. Most vendors are already regulated by the state and a variety of business organizations. Instead of burdening the consumer with the paperwork and delays, send the incentive to the vendor.
The state of Maine (colder than RI) has over 100000 heat pumps installed. Everybody is staying warm. The argument that heat pumps cannot handle New England winters is totally BS from the fossil fuel companies
How can this person save $1,200 a year on electric bill if he’s not currently using electricity for heat? It’s impossible. He’s currently using oil, so his electric bill will go up substantially if he converts to heat pumps.
“For Westman, getting a heat pump wasn’t much of a sell. He had been keeping an eye on what heat pumps could do, and what the state was providing in terms of incentives. Even with recent volatile electric prices, Westman said he expected to save up to $1,200 annually on his electric bill once everything was installed”.
J Hines,
The way we look at the savings if someone doesn’t have electric heat to compare directly is the savings of NOT buying oil any longer or buying much less oil. We have an oil boiler in our home and we installed mini split heat pumps throughout (raised ranch, approx. 1700SF). We purchase oil for our hot water only now. The added electricity cost is not near the amount we were spending on oil to heat our home. Cooling our entire home costs less in electricity than our former window air conditioners did and they do a much better job.
And taking it a step further, installing solar panels and a backup battery system has saved us even more. Even with the upfront cost of the installation, in the long run with rising energy cots, we will always be ahead of the game.