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Proposal for $15 Million Rebate Program for Renewable Heating and Cooling Technology

 

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Governor Andrew M. Cuomo announced a $15 million proposal to accelerate the use of renewable heating and cooling technologies in New York to stimulate the clean energy economy. The new policy framework released by the New York State Energy Research and Development Authority includes a proposed two-year, $15-million program to provide rebates for the installation of ground-source heat pumps. This plan will support the state’s goal to reduce greenhouse gas emissions in New York 40 percent by 2030 from 1990 levels.

“New York has made great strides to combat climate change by supporting the use of new technologies and growing our clean energy economy,” Governor Cuomo said. “We will continue to make green investments that will encourage the use of clean, affordable energy to reduce our carbon footprint and support sustainable communities throughout the state.”

Currently, fossil-fuel based thermal energy — primarily natural gas, propane and oil — is the main energy source for space heating, space cooling and domestic hot water in the residential and commercial sectors. It is responsible for approximately 32 percent of New York’s energy-related greenhouse gas emissions. Reducing emissions is integral to the Governor’s Reforming the Energy Vision strategy for a cleaner, more resilient and affordable energy system for all New Yorkers.

Renewable heating and cooling technologies not only provide environmental benefits, they can provide energy bill savings, increased comfort levels and health benefits compared to conventional heating and cooling technologies.

The NYSERDA framework, the “Renewable Heating and Cooling Policy Framework: Options to Advance Industry Growth and Markets in New York,” sets out policy options and market-based solutions for the next few years, and identifies approaches for longer term action. Interested parties are invited to comment on the framework. More information on the framework policy is available here [PDF].

The proposed $15 million rebate program would provide about $6,000 for a typical residential consumer for the installation of a ground-source heat pump. This technology has tremendous potential to provide New Yorkers with a heating and cooling system that is energy efficient and reliable. However, it is not yet cost-competitive with conventional technologies so providing rebates will help stimulate market growth.

In addition to the rebate, the framework identifies a range of options for the next few years to lower costs, reduce barriers and grow the market, including:

  • Community-based outreach, education and bulk procurements.
  • Integrating renewable heating and cooling in new housing developments and campuses, which can be more economically efficient and lower cost due to the scale of the projects.
  • Developing a unified and streamlined permitting process.
  • Reducing project development risks by providing support for feasibility and engineering studies.
  • Introducing renewable heating and cooling technology into existing trade and distribution channels.
  • Advancing new business models and financing innovations that can mitigate high upfront costs by spreading them over time.

The framework also explores methods to implement renewable heating and cooling mandates for public buildings, new construction, and renovation.

“The expanded use of renewable heating and cooling technologies is critical to helping New York reduce greenhouse gas emissions,” said Richard Kauffman, Chairman, Energy and Finance, New York State.” The policy framework outlines several opportunities that we can explore for the best path forward in our efforts to expand the reach of clean energy throughout our state and curb climate-changing emissions.”

NYSERDA, which developed the framework, will work with stakeholders and launch renewable heating and cooling programs in 2017 upon approval by the Department of Public Service, as part of the Clean Energy Fund. Once approved, NYSERDA expects to offer the rebate program in the Spring. NYSERDA, DPS, and the New York Power Authority will be collaborating to advance the framework.

“Accelerating clean heating and cooling technologies like ground-source heat pumps is another significant step under Governor Cuomo’s direction to make New York the cleanest and most energy efficient state in the country," said John B. Rhodes, President and CEO, NYSERDA. "The recommendations outlined in the Framework strongly support New York’s nation-leading clean energy strategy and we look forward to working with the industry to bring these ideas to fruition.”

“This proposal will help to streamline the implementation of renewable energy technology all across New York State,” said Gil C. Quiniones, NYPA president and CEO. “By undertaking screenings and feasibility assessments for geothermal heat pump projects, we will accelerate their installation and expedite achieving a clean energy economy for all New Yorkers.”

Assemblywoman Amy Paulin, Chair, Assembly Committee on Energy said, “NYSERDA’s proposal supplies a roadmap for how we can increase the use of clean, geothermal energy in NY, which is currently under-utilized. This will go a long way towards helping to meet the State’s ambitious renewable energy goals.”

John Franceschina, President, NY-GEO said, “New York is now charging ahead with a rapidly evolving program to address climate change that combines renewable heating, cooling, power generation and electric vehicles. NY-GEO thanks Governor Cuomo, who has come to the rescue of 1,000 family-supporting geothermal jobs, while paving the way for New York to meet the goal of reducing greenhouse gas emissions by 40 percent by 2030.”

Roger Downs, Conservation Director, Sierra Club Atlantic Chapter said, “The Sierra Club applauds Governor Cuomo’s leadership in energy efficient technologies such as geothermal. Geothermal heating and cooling represents one of New York's best and most cost-effective strategies to achieving our net zero energy goals and deserves the same financial encouragement as other desirable energy sources like wind and solar.”

Several barriers currently stand in the way of widespread market adoption of renewable heating and cooling technologies. These include higher upfront costs than conventional technologies, cost-effectiveness challenges, inadequate access to low-cost investment capital, limited customer awareness and confidence in the technologies, and a range of supply chain barriers to growth. In addition, heating and cooling equipment is typically only replaced toward the end of its useful life — about 15-20 years — so the opportunity to switch to renewable energy is limited.

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