Heat pumps

Heat pumps Heat pumps

Air-source, cold-climate, and geothermal heat pumps provide heating and cooling

No matter the temperature, heat is always available in the air around us and in the ground. Heat pumps take advantage of that by moving heat in or out of buildings to keep spaces comfortable. Because they move heat rather than produce it, heat pumps operate with high efficiency.

Rebates are available for air source, cold-climate, and geothermal heat pump installations. Requirements vary by heat pump configuration, program, and state policy. Below is a summary table of rebates per ton for qualified systems and the rating and rate requirements that apply.

Energy control rebates are available for qualified off-peak installations.

CIP efficiency rebates are available for heat pump systems that meet required efficiency levels— regardless of the rate on which it’s served.

2021 Minnesota heat pump rebates

CIP efficiency program rebates

Heat Pump Configuration Qualifications Energy control program rebates*

Rebate Qualifications Rebate

Air-source heat pump (ASHP) Ducted or Ductless Model labeled ENERGY STAR®; or SEER ≥ 15, and HSPF ≥ 8.5, and EER ≥ 12.5; and $400 per ton No Energy control rebate available.

Cold-climate heat pump (CCHP) Ductless mini split system

Ducted system

Geothermal heat pump Water to air open loop

Water to air closed loop

Water to water open loop

Water to water closed loop Model labeled ENERGY STAR® with HSPF of ≥ 10; or

Model labeled ENERGY STAR® with HSPF of ≥ 9; or HSPF ≥ 10 and SEER ≥ 15; and

HSPF ≥ 9 and SEER ≥ 15; and

COP ≥ 4.1; and EER ≥ 21.1; and COP ≥ 3.6; and EER ≥ 17.1; and COP ≥ 3.5; and EER ≥ 20.1; and COP ≥ 3.1; and EER ≥ 16.1; and

New construction, retrofit, or replacement of electric heating. Does not qualify if installed to replace an operating natural gas heating system that is not considered at end of life. $700 per ton Installed on a qualified rate;

$900 per ton Dual Fuel or Deferred Load HSPF ≥ 10 $500 per ton

HSPF ≥ 9 $700 per ton

$1,000 per ton No Energy control rebate available.

Limit one rebate per installation. Models with qualifying efficiency criteria may be found through AHRI at ahrinet.org *Rebates totaling more than $10,000 require prior approval by program manager.

Break-even costs for heat pump systems

Fuel price break-even points

To calculate the break-even point of electricity compared with natural gas, propane, or heating oil, find the price per kilowatt-hour paid (prices will vary by rate) and the efficiency level of the fossil fuel-operated equipment you’re comparing. The price shown is the all-in price fossil fuels must reach to break-even with electricity prices.

Energy source Btus per unit Propane 91,600 Btu/gallon Natural gas 1,000,000 Btu/MCF Fuel oil 140,000 Btu/gallon Electricity 3,413 Btu/kilowatt-hour

Break-even costs for heat pump systems

Electricity 100% efficient electric 150% efficient electric 250% efficient electric 400% efficient electric

Cost per kWh 3.5¢ 5.5¢ 7.5¢ 3.5¢ 5.5¢ 7.5¢ 3.5¢ 5.5¢ 7.5¢ 3.5¢ 5.5¢ 7.5¢

Fossil fuel System efficiency Break-even point for electric to fossil fuel

Propane (Gallon) 80% $0.75 $1.18 $1.61 $0.50 $0.79 $1.07 $0.30 $0.47 $0.64 $0.19 $0.30 $0.40

90% $0.85 $1.33 $1.82 $0.56 $0.89 $1.21 $0.34 $0.53 $0.72 $0.21 $0.33 $0.45

Natural gas (MCF) 80% $8.20 $12.89 $17.58 $5.47 $8.59 $11.72 $2.81 $5.16 $7.03 $2.05 $3.22 $4.40

90% $9.23 $14.50 $19.78 $6.15 $9.67 $13.18 $3.69 $5.80 $7.91 $2.31 $3.63 $4.95

Fuel oil (Gallon) 70% $1.00 $1.58 $2.15 $0.67 $1.05 $1.44 $0.40 $0.63 $0.86 $0.25 $0.40 $0.54

85% $1.22 $1.92 $2.62 $0.81 $1.28 $1.74 $0.49 $0.77 $1.05 $0.31 $0.48 $0.66

Current rates for off-peak options are available at otpco.com/pricing.

Cold-climate heat pump rebates

CCHPs may qualify for rebates either through energy control rebates or through the CIP energy efficiency program. ■ Rebate is based on nominal heating capacity at 47˚F. ■ Rebates vary by whether the configuration is ducted or ductless.

Notes for energy efficiency rebates ■ Customers with existing natural gas heating systems are not eligible for energy efficiency heat pump rebates through the Minnesota CIP program. CCHPs must be: ■ Equipped with a variable capacity compressor. ■ Designed and sized to meet heating requirements. ■ Installed with crossover set point no higher than 0˚F.

Energy control rebates must additionally: ■ Be served on a Dual Fuel or Deferred Load Rate.

■ Be subject to control according to the rate. ■ Receive prior approval when a rebate will total more than $10,000.

■ Natural gas heating customers installing an off-peak CCHP may qualify for an energy control rebate. ■ Financing options may be available for qualifying

Minnesota commercial customers.