Vermont’s largest electric utility is beefing up its campaign to get ductless minisplit heat pumps into the homes of more people as it expands its no-money-down pitch to consumers in its entire service area.
Homeowners who sign up get a heat pump from one of three manufacturers and finance the cost of the installation over 15 years, making loan payments from $49 to $81 per month for a single-head heat pump. There is no down payment, and Green Mountain Power says that heating bills in this Climate Zone 6 state can be reduced by between 25% and 50%. Maintenance is included.
Efficiency Vermont, a ratepayer-financed program designed to lower energy consumption, will chip in $600.
Green Mountain Power, which has some 265,000 residential and business customers, first started a heat pump program in 2013 in the Rutland area. It had planned to include up to 200 customers, but within a week more than twice that number said they were interested. Not everyone who applied could take advantage of the program, either because their homes did not have open floor plans to encourage heat circulation or because the wood stoves they had were already heating efficiently. But by 2014, the utility was renting 150 heat pumps.
The pilot program that began in Rutland County now extends into Addison, Bennington, Washington, and Chittenden counties. GMP also offers a program called eHome, designed to help homeowners reduce energy consumption
Kristin Carlson, GMP’s vice president for strategic and external affairs, said in an email that the utility has now installed 1,125 heat pumps. GMP arranges for the installation with a contractor. The heat pump brand and model is chosen by the contractor; installed brands include Daikin, Fujitsu, and Mitsubishi, with outputs ranging from 9,000 Btu/h to 18,000 Btu/h. Loans have an APR (interest rate) of 10.74%.
GMP says that payments will range from $49 to $81 per month, depending on the model of heat pump that’s installed. At $49 a month, a homeowner would end up paying $8,820 for a single-head minisplit over the 180-month payback period; at $81, a homeowner would pay a total of $14,580. That doesn’t include the electricity required to run the unit.
Should a homeowner sell the house before the loan is repaid, GMP says it can offer a buy-out price for the heat pump, or the new owner could pick up the payments.
Impact on consumer bills
Nearly half of all Vermonters (44.6%) currently heat with fuel oil or kerosene, according to the U.S. Census Bureau, with another 32% using some form of gas. Only 4.6% of all households use electricity for heat, and another 17% take advantage of the state’s ample woodlands and heat with wood.
At its website, Green Mountain estimates that a minisplit would use 5,300 kWh of electricity per year. At the residential rate of 14.8 cents per kWh, that customer would pay $784 more per year for electricity. The additional monthly use of electricity — 442 kWh per month — would almost double the amount of power an average Vermont household uses, according to the website Electricity Local. But homeowners would still save money because ductless minisplits produce more BTU per dollar than furnaces that burn oil or propane, according to GMP.
Carlson said that Green Mountain generally uses five-year averages for gas and oil prices to calculate savings estimates.
“We can do this on a customer by customer basis depending on fossil fuel usage and the space the customer would like the heat pump to heat and cool,” she said. “GMP takes the customer’s historic use (as they tell us) of annual fuel consumption, convert that to BTUs. Then we take a designated increase of kWhs for the heat pump size recommendation, convert that to BTUs so we have an apples-to-apples calculation to show how many gallons of heating fuel we are offsetting.”
Impact on fossil fuel dealers
Green Mountain’s ductless minisplit campaign is unlikely to have much of an impact on the state’s 150 oil and gas dealers, says Vermont Fuel Dealers Association Executive Director Matt Cota. A number of them already install heat pumps, and even the up-to-date heat pumps that the utility is promoting won’t be able to replace conventional heating equipment completely.
Instead, he said in a phone call, most heat pumps being installed in Vermont are going in as air conditioning units, with the heat they provide useful mostly in the shoulder seasons. When the heat pumps are “installed and used correctly,” he said, they might be able to offset as much as 30% of heating costs.
“What they won’t do is replace your [heating] load in the middle of the winter, during the 90 coldest days of the year when you need wood, gas, oil heat, or kerosene in order to keep the pipes from freezing,” he said. “Unless we’re talking about a newly built, net-zero house — yeah, in that case forego the oil, but that’s not going to happen in 99% of the cases.”
Vermont homes traditionally have been heated hydronically, meaning they’re equipped with boilers rather than ducted furnaces. “We largely have radiant-heat, boiler-based homes, and as a result there is less ductwork,” he said. “More boilers, less furnaces.”
Cota also suggested the minisplit program is helping Green Mountain offset the impact of more rooftop solar. As the number of solar households goes up, and net metering payments increase, fewer customers are helping to pay for the poles and wires that distribute the power, he said. Increasing the consumption of electricity for heat and transportation fuel can help offset the decline.
“That’s really what’s unique about Green Mountain Power’s plan — they’ve embraced that,” he continued. “Now, because we have so much net metering, it’s not about using less so we don’t have to build less power plants. It’s about selling more so we share the costs and we don’t have to raise rates that way.”