Heat Pumps for All? The Distributional Costs and Benefits of Residential Air-Source Heat Pumps

Electrification of fossil-fuel combustion in buildings is a key component of achieving global greenhouse gas emissions targets. We use physics simulations of 550,000 statistically representative households to analyze distributions of the costs and benefits of three air-to-air heat pump performance levels, with and without insulation upgrades, across the diversity of the US housing stock. We find positive greenhouse gas reductions in every US state for all performance levels across five 2022-2038 electric grid scenarios, with full adoption reducing national emissions by 5%-9%. We find that air-to-air heat pumps could be cost effective without subsidies in 59% of households (65 million). However, efficiency is key: whereas minimum-efficiency equipment could increase energy bills in 39% of households, this fraction is only 19% when also upgrading insulation or 5% when using higher-efficiency equipment, though both strategies have higher upfront costs. Such affordability challenges could be addressed through supportive incentives, policy, and innovation.