New York City has some of the most ambitious renewable energy and emissions reduction goals in the US. The city aims to reduce its emissions by 80% before the year 2050, compared to levels measured in 2005. This reduction is equivalent to 43 million metric tons of greenhouse gases per year, and the potential for reducing emissions in the Buildings are estimated to produce 25 million metric tons of GHG, which represents almost 60% of the target for 2050.
According to the Urban Green Council, heating is by far the largest energy expense in New York City buildings, where space heating represents 27% of energy expenses and water heating accounts for 10%. The dominant energy source for heating is natural gas, responsible for around 50% of space heating and more than 60% of water heating. Therefore, switching from gas to electric heating can significantly contribute to New York's emissions reduction goals.
Achieve an efficient electric heating design and reduce your emissions and energy bills.
However, there is an important challenge to overcome: New York homes and businesses use natural gas for heating because it is generally the lowest-cost option. Although electricity from renewable sources can provide green heating, New York State has some of the highest electricity rates in the country: the residential sector pays 18.5 cents/kWh on average, while the commercial sector pays 14. 5 cents/kWh. To make the transition to electric heating viable, the cost disadvantage must be overcome.
Making electric heating affordable
In 2017, the average price of natural gas in New York State was slightly less than $14 per million BTU, according to the U.S. Department of Energy. Suppose 1 million BTUs of water heating are needed and the two options are a tankless gas heater with an energy factor of 0.80 and a storage heater with an EF of 0.67. The energy costs would be as follows:
- Energy Cost (Tankless Heater) = (1 MMBtu / 0.80) x $14 / MMBtu = $17.50
- Energy Cost (Storage Heater) = (1 MMBtu / 0.67) x $14 / MMBtu = $20.90
Both options have a much lower operating cost than a conventional electric resistance heater. Even assuming a high EF of 0.95, the energy cost of electric heating is significantly higher:
- 1 MMBtu = 293.07 kWh
- Energy Cost (Tankless Resistance Heater) = (293.07 kWh / 0.95) x $0.185/kWh = $57.07
Electric resistance heating is about three times more expensive than gas heating in New York, so it should come as no surprise that many homeowners and businesses have decided to use gas. However, there are two main approaches that make electric heating cost-competitive:
- Increase heating efficiency to reduce electricity consumption and offset its high price.
- Reducing the cost of electricity itself.
It is also possible to reduce heating needs by improving the building envelope and minimizing the use of hot water. However, these approaches are beneficial to overall heating efficiency, regardless of whether the system uses gas or electricity.
Option 1: Increase electric heating efficiency
The main disadvantage of resistance-based heating is that one unit of electricity must be consumed for each unit of heat supplied, and then some of the heat is lost before it reaches the point of use. However, heat pumps use a reverse refrigeration cycle to provide greater heating power than electricity consumption.
Aerothermal heat pumps with the ENERGY STAR label have a coefficient of performance (COP) of 2.5 or more: they provide 2.5 kWh of heat per kWh of electricity consumed. Geothermal heat pumps are even more efficient and some models have a COP greater than 4. With a COP of 2.5, a heat pump consumes 60% less electricity than a resistance heater of the same capacity and the savings increase to 75% with a COP of 4.
Suppose a heat pump with an energy factor of 3 is used instead of the example resistance heater to achieve a significant reduction in energy costs:
- Energy cost (heat pump) = (293.07 kWh / 3) x US$0.185/kWh = US$18.07
Heating demand and electricity prices have remained the same, but running costs are now much lower because electricity is being consumed more efficiently.
In New York City, Con Edison's energy efficiency incentive program makes heat pumps more affordable by offering rebates. We highly recommend checking the program requirements before purchasing a heat pump to ensure it qualifies for the rebate.
- Homeowners are eligible for a $500 rebate when purchasing an electric heat pump.
- In the commercial sector, heat pumps are eligible for rebates ranging from $50 to $125 per ton. The incentive rate varies depending on the specifications of the heat pump.
Option 2: Reduce the Cost of Electricity
Individual homeowners and businesses have no control over the electricity rates charged by utility companies, but there are two ways to access electricity at a lower cost: taking advantage of electricity prices at the time of day and generating power on site. It is important to note that although generation can be based on renewable sources or fossil fuels, the second option defeats the purpose of replacing gas heating with electric heating.
Utility companies typically use hourly rates, where the cost of electricity is adjusted according to demand on the power grid. Since operating a highly loaded network is more expensive for the utility, a higher rate is charged during these hours. The opposite also applies: at times of low demand, utilities can rely on their cheapest power plants and grid losses are also minimal. A simple way to access low-cost electricity for heating is to use more energy when utility rates are low. Hot water can be stored in an insulated tank and then used directly or for hydronic space heating.
Self-generation is also a valid approach, as long as the energy can be produced on-site at a cost lower than the retail price of electricity. A Power Purchase Agreement can be an attractive option for home and business owners who want to avoid the upfront cost of a renewable generation system; In a PPA, the system is owned and maintained by a specialized company, and the customer agrees to purchase all electricity generated at a price lower than the retail price of electricity.
With their efficiency alone, high-performance heat pumps can match the operating cost of gas heaters. If complemented with off-peak heating or on-site power generation, they can become a low-cost option that also eliminates emissions associated with natural gas combustion.
Final Observations
Heating is the leading energy expense in New York City buildings and natural gas is the primary energy source for heating applications. Although its emissions are lower than coal and oil, it is nevertheless a fossil fuel, and New York has some ambitious goals in terms of renewable energy and emissions reduction. Conventional electric heating has long been much more expensive than gas heating, but this is changing thanks to high-performance electric heat pumps, distributed renewable energy and demand-side management technologies such as smart energy storage. energy.
