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Two states & their Decarbonization challenges

BUILDING DECARBONIZATION - blog headerRhode Island and Massachusetts both have mandates to reduce statewide greenhouse gas (GHG) emissions by 2030 compared to 1990 levels: 50% for Massachusetts and 45% for Rhode Island. Let’s take a look at the approaches they’re taking in the building sector, specifically – what they have in common, what’s different, and what might work.

Plans to Make Plans 

First off, both states have published plans on how they would achieve GHG reductions economy-wide by 2030.

Massachusetts actually has two plans of note: (1) the legislatively required Clean Energy and Climate Plan for 2025/2030 (CECP) (which we wrote about back in July here), and (2) a report of Governor Baker’s Clean Heat Commission that was released on November 30 (you can read our review of that report here). These reports are relatively comprehensive, and the CECP purportedly reaches the 50% emissions reduction requirement (with the buildings sector itself achieving 49% reductions), but both still lack the detail we feel is warranted. 

Rhode Island recently released its own plan. Unfortunately, the Ocean State plan would ostensibly reach 38% emissions reductions, far short of the legally required 45%.  And if you can figure out how much building sector emissions in particular would fall, please let us know; we were sorely disappointed by the lack of detail and modeling in that report. 

How Many Heat Pumps?

There’s more to decarbonizing buildings than just installing heat pumps to replace fossil-fuel-burning heating systems. However, there is absolutely no way to achieve 50% or 45% emissions reductions by 2030 or 90% by 2050 without phasing out fossil fuels and installing lots of air-source and ground-source (geothermal) heat pumps. So, what do the plans call for in terms of heat pump installations? 

heat pump bannerThe Massachusetts CECP projects that by 2030, about 1.1 million or 38% of homes must be electrified, along with 300 million square feet of commercial space (see this presentation and this appendix, p. 159, for more info). And again, according to their modeling, these heat pumps will be a major contributor to a 49% reduction in building sector emissions. 

Further south, the Rhode Island plan has “an aspirational target of 15% of space and water heating demand in all buildings being provided by efficient electric appliances (e.g., heat pumps and heat pump water heaters) by 2030.” Their analysis shows that 22% of sales of new non-electric space heating equipment and 8% of the sales of new non-electric water heating equipment must be replaced with the sale of efficient electric equipment from 2021 to 2030 (see p. 70 of the plan). 

As pointed out above, Rhode Island’s overall plan would fall far short of the required 45% of GHG required by the Act on Climate. So, looking at the heat pump numbers, it’s fairly easy to see how Rhode Island clearly needs to raise its sights and, just as importantly, drop the word “aspirational” from its vocabulary. The Act on Climate does not aspire to a 45% GHG reduction. It requires it. 

Where Are the Carrots & Sticks? 

heat pump homeFor heat pumps to get into 15% of homes by 2030, let alone 38%, the states are going to have to come up with an effective combination of incentives and mandates or regulations. In terms of incentives, they both say that new funding sources will have to be identified. The current Three-Year Plan for Mass Save in Massachusetts provides heat pump incentives of up to $10,000 for most residential consumers and more for those who are income-eligible. But the total pot of money on an annual basis is a fraction of what will be necessary to support 100,000 installations per year.   

Rhode Island is launching a new $25 million heat pump program, funded by one-time federal dollars. We welcome the allocation, but it’s a drop in the proverbial bucket. The efficiency program administered by Rhode Island Energy is not at the scale justified by the climate plan. 

So, the search for a new, ongoing funding solution is happening in both states. It’s not a coincidence because of the common goals. And so it’s also not a coincidence that both states reference a policy that could provide both the ways and means.  

Standards as Carrots AND Sticks 

The plan for Massachusetts refers to this potential policy as a “Clean Heat Standard” (CHS) while the Rhode Island plan refers to it as a “Renewable Thermal Standard” (RTS). In both cases, suppliers of fossil fuels (methane, AKA natural gas; heating oil; or propane) for either heat or hot water would have to deliver clean heat solutions in increasing amounts over time. As we wrote in a recent blog, a good standard would create the support necessary to electrify buildings at the pace we need. Numerically, air-source heat pumps will dominate, but a CHS or RTS could also enable the financing of ground-source heat pumps and networked geothermal projects. Designed properly, it can be an equitable policy, prioritizing low- and moderate-income families, public schools, and other societally important structures. 

Basically, a CHS or RTS brings to the buildings sector both carrots and sticks.  

building decarbAnother policy that would drive equitable market transformation is a statewide Building Performance Standard (BPS) along the lines of what the City of Boston is implementing now (read this recent blog for more info). A BPS addresses existing buildings, starting with the largest ones, and requires emission reductions each year. It forces large building owners to meet the schedule of emissions reductions by installing energy efficiency measures and investing in renewable energy generation. Undoubtedly, meeting that schedule will cause more building electrification.  

Yet another approach is to set a date certain by which new construction must be all-electric. Both states need to establish such a date soon in order to avoid the prospect of having buildings heated by fossil fuels in 2050. For that same reason, some countries and states are also looking at applying that concept to existing buildings by setting a date certain by which new fossil fuel heating systems cannot be sold.  

Moving Off the First Square 

The plans have been written and read. It’s now time for Governor-Elect Maura Healey (MA) and Governor Dan McKee (RI) to work with their legislatures and choose a path or paths forward. Actually, it’s up to them to declare how resources will be brought to bear on the building electrification challenge. In the Bay State, the question is: how will Maura Healey react to the recommendation for a Clean Heat Standard? And in Rhode Island: how will Dan McKeen react to the recommendation to pursue a Renewable Thermal Standard? Tomayto, tomahto. Just do it.