HRAI provides update on heat pump issue

Last year, apparent plans to introduce a heat pump (HP) rental program caused some concern for Heating, Refrigeration and Air Conditioning Institute of Canada (HRAI) Atlantic Chapter members. They expressed reservations about NB Power (formerly known as the New Brunswick Power Corporation and the New Brunswick Electric Power Commission) stepping over the line that separates regulated monopoly energy market from the competitive HVAC/R market. HRAI met with NB Power to discuss these industry concerns and to explore solutions.

In July, NB Power announced that the company had “re-evaluated [its] approach and has determined not to proceed with the rental program.” Having received suggestions for alternative approaches, NB Power is “developing a new program approach, which includes an educational program for customers, starting this fall, to help promote the benefits of DHP, specifically the most energy efficient units for cold climates.”

On October 21, 2015, NB Power updated members of HRAI’s Atlantic Chapter on how the company will be proceeding. The utility again confirmed that it had abandoned the concept of setting up a rental program based on the feedback they received from HRAI members and industry stakeholders since December 2014. Having said that, the utility’s goals remain to:

1. Increase the sale of high efficiency ductless heat pumps (DHPs) in the province.
2. Help homeowners choose a product that is better than what they were going to purchase.
3. Reduce “winter peak” demand by promoting cold climate products that will still provide a decent coefficient of performance (COP) at temperatures of -20C or lower.

NB Power reported that the company had conducted three surveys over the summer of 2015 – with distributers, contractors and homeowners. Interestingly, the surveys revealed that:

• HP sales have stayed steady over the past year and a half, despite the cancellation of a previous incentive program from Efficiency NB.
• 90 per cent of DHPs sold in NB are ENERGY STAR certified.
• At least 30 per cent of HPs sold in NB meet the CEE Tier 3 (high efficiency HP) requirements.
• Up to 55 per cent of homeowners are willing to pay more for a system that will give them a quicker payback and better energy savings.

These results would suggest that there is little need for utility incentives in a market already showing significant HP sales (HRAI’s statistics confirm this). But the utility is concerned about meeting peak demand with already strained power generation capacity and has concluded that it is in the public interest to keep incentivizing homeowners to buy high-efficiency products.

Effective October 1, 2015, NB Power is offering a $500 point of sale, after-tax discount for ENERGY STAR Certified HPs with SEER of 18, HSPF of 8.7 (Zone V), as well as cold climate ductless mini-split heat pumps. Under the terms of the program, participating contractors sell eligible heat pumps to  clients at the regular price (+ HST), less $500, and NB Power simply reimburses the contractor for each qualifying HP sold (after October 1).

HRAI expressed concerns about how NB Power selects its “Participating Contractors,” but has learned that, after April 1, 2016, “Participating Contractors” will need to meet additional certification criteria to stay enrolled in the program. Furthermore, homeowners will be encouraged to ask contractors to “Show me your card” (trade licence), similar to the marketing message used in the Heat Pump Quality Assurance program that was rolled out in Nova Scotia.

The goal, as always, will be to ensure NB Power is an ally in the promotion of properly installed systems, rather than an active market participant. HRAI will continue to monitor this program and assist NB Power in moving forward.

For more information, contact Martin Luymes at 800.267.2231 ext. 235 or e-mail mluymes@hrai.ca. From HRAI E-Insight.