Heat pumps, heat pumps, heat pumps!!

A simple but incredibly useful machine is quietly transforming our buildings.

Photo by shixart1985, CC BY 2.0

Heat pumps are magical. You can fold up a heat pump and put it in your pocket and it’ll bring good luck. Heat pumps can stop a horde of charging triceratops, or propel starships to 0.996 times the speed of light. Heat pumps cure generalized anxiety disorder, malaria, and bird flu. A heat pump contains a gateway into a pocket dimension where you can hide from evil wizards. Heat pumps can only be made with a special kind of diamond found only in meteorites from outside our solar system. Heat pumps will be your best friend.

OK, well, none of that is true. But heat pumps are a very useful and underappreciated technology, and it’s kind of hard to get people excited about them.

Since I started I’ve been writing a series of posts about important physical (“atoms”) technologies that will transform our physical environment — solar power for cheap electricity, batteries for power storage and energy portability, battery-powered appliances, green hydrogen, and so on. I plan to write about drones, space stuff, robots, and a bunch of others. But since my first four posts were all about climate-and-energy-related stuff, I thought I’d write about the one last technology in this category that everyone seems excited about — the humble heat pump.

The basics: What is a heat pump, why should you care, and how does it work?

Here’s a good primer on heat pumps. A heat pump is just a combination heater and air conditioner — it can either heat or cool your house, as either a central system or a wall unit. Why is that interesting? Well, at the risk of sounding more like an appliance salesman than an econ blogger, here are some possible reasons:

• Heat pumps heat your house much more cheaply than other types of heating, since they’re incredibly energy-efficient. So you can save money.

• Heat pumps are better for the climate than gas-powered heating, since they run off the electrical grid. (The electrical grid is shifting to renewables, so using electricity is better for the climate than burning gas.)

• Since the climate is getting more variable — hot summers in Canada and the occasional blizzard in Texas — a lot of people who have either only heaters or only AC in their house will need both in the years to come. Also, if you don’t have both yet, it’s just kind of nice.

• Heat pumps are safer than other heaters (they can’t cause a fire), and they take up less space than a normal heater plus normal AC.

How do heat pumps work? Well, you probably already know how an AC works. It takes hot air from inside your house, transfers some of the heat to a chemical called a refrigerant, and then blows the cool air back into your house, which cools it down. It then transfers the heat from the refrigerant to the outside, which heats up the air outside your house. It moves heat from the inside of your house to the outside.

This is exactly how a heat pump cools your house. When it’s cooling your house, it’s just a normal AC. But did you ever think “When it’s cold outside, why can’t we just turn the AC around and air-condition the outside, so it heats up inside?” Well, it turns out you can! And that is how a heat pump works. It just moves heat from the outside of your house to the inside, just by turning the air conditioning in reverse.

Now, you may ask: Isn’t it hard to move heat from outside to inside when it’s cold outside? Imagine you’re in Minnesota in the winter and it’s 15 degrees below zero outside. In order to use a heat pump to heat your house in that kind of weather, you have to actually take heat out of that frigid air outside! Is that really possible?

Well, yes it is. Heat pumps are really that awesome. The magic of thermodynamics means you can make your refrigerant really really cold, just by letting it expand a lot. You can make it so cold that in comparison, even Minnesota winter air is hot! I’m skipping over some engineering details, because there are actually ways that they modify heat pumps to work efficiently in super-cold weather. But basically it’s not something anyone needs to worry about, which is why heat pumps are getting popular in cold regions.

The most magical thing about heat pumps, though, is how energy-efficient they are. A normal electric or gas heater can’t possibly get more than 100% efficient, which would mean that it converted 100% of the energy it uses into heat. That’s just thermodynamics. But a heat pump mostly isn’t creating heat; it’s just relocating it. So it can reach much more than 100% efficiency — as high as 300% for a typical air-blowing heat pump, meaning that for every Joule of energy your heat pump consumes, you move 4 Joules of energy from outside to inside. (There’s a more expensive type called a ground-source heat pump that can get up to 400%.)

Because heat pumps are so efficient, they save you a lot of money on your heating bill (while keeping your AC bill the same). Everyone quotes different numbers, but in general I’m seeing that a heat pump — which costs a few thousand dollars to install — will pay for itself and start saving money in about 10 years. And as heat pumps get better and better, those savings will come faster and faster.

Anyway, that is why heat pumps are cool. So it’s no surprise that people in lots of countries are switching to them. I will therefore switch out of appliance-salesman mode and back into techno-optimist blogger mode.

The heat pump revolution

Here is a great IEA report about what’s happening with heat pumps. As with most green technologies, they’re are taking off because of two basic factors: subsidies, and technological improvements.

You might think subsidies aren’t necessary for a technology that pays for itself. But if you want people to install heat pumps fast, and at a large scale, subsidies help. And for technologies that have learning curves, subsidies kick off a familiar virtuous cycle — they cause volume to scale up, which drives down costs, which makes the tech even more attractive, which causes volume to scale up even faster, etc. Heat pumps don’t have the kind of dramatic learning curves that solar, batteries, and (hopefully) green hydrogen do. But nevertheless, costs are decreasing. (In general, a good rule of thumb is that if you make something in a factory, it has a learning curve.)

Heat pumps also have a network effect — the more of them are installed, the more repair services will become common in every town. Anyone who has had an AC or heater knows how important it is to have lots of repair services nearby.

Between subsidies, technological improvements, and network effects, heat pumps are becoming more of an economic no-brainer for households:

Source: IEA

The IEA reports that air-to-air heat pumps — the kind I described in the previous section— are already cheaper than gas heating plus traditional AC in basically every country (except possibly the UK). This is very naturally leading to increased adoption. And because heat pumps offer more improvements in heating than in AC, they’re getting adopted faster in cold regions. In fact, this is one rare case where the U.S. and Europe are installing a green technology much faster than China:

Source: IEA

European countries are going especially fast here, and the Russian gas cutoff will only accelerate their adoption:

In the U.S., adoption has been a bit slower. Heat pumps are cheaper than gas heating plus AC, but only a little bit, given America’s very cheap natural gas. And in some states in New England and the Pacific Northwest, there are a substantial number of households that still don’t even have AC, which reduces the savings from heat pumps. So in the U.S., it’s actually the South that has taken the lead on adopting heat pumps:

Source: EIA via Canary Media

Overall, only 12% of U.S. homes have a heat pump, but that’s way up from where it was a few years ago. And in 2022, heat pump sales outpaced gas furnace sales for the first time ever. So I’m pretty encouraged.

Actually, the fact that heat pumps are more popular in the Republican-dominated South is extremely encouraging to me. It means that heat pumps aren’t being subjected to the same kind of pointless culture war that has hindered the implementation of solar power and electric cars and induction stoves. Maybe a heat pump is just too boring and simple to have a culture war about.

In any case, the heat pump revolution is very good for a number of reasons. It’ll reduce carbon emissions, by as much as 10% globally if all building heating switches over. It’ll be an industry worth hundreds of billions of dollars, which the U.S. is decently well-positioned to dominate. And by saving energy, heat pumps will leave more energy to be used for other things — training AI, running robots, smelting aluminum, or whatever. Heat pumps are thus another source of material abundance.

So no, heat pumps won’t power your starship or cure malaria. But they do show the power of prosaic, boring technologies to change the world. Techno-optimism isn’t just about the flashy new stuff built by geniuses in secret labs — it’s about a future where regular people create small technological improvements that suffuse our daily lives, making everything a little bit better, all the time.

Financial disclosure: I am not invested in any company that makes or services heat pumps, though I am invested in a battery-powered appliance company, and I personally think they should make some battery-powered heat pumps!

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