Southeast and Southcentral Alaska to receive $38M to launch heat pump rebate program

Southeast Conference and Juneau-based nonprofit Alaska Heat Smart have received a $38.6 million federal grant to help homeowners in southeast and southcentral coastal Alaska purchase electric heat pumps to replace traditional fossil fuel heating systems.

AK Heat Smart has already helped get heat pumps into 1,000 homes in the region. This new injection of money, announced last week by the Environmental Protection Agency, will “supercharge” those efforts.

“It was, you know, definitely a sense of shock,” said Andy Romanoff, executive director of Alaska Heat Smart. “And a little bit of fear at the same time, which quickly turned into excitement.”

Romanoff says the region is ready for more heat pump installations.

“We like to say that the Alaska coast, from Ketchikan to Kodiak, is kind of a Goldilocks zone for heat pumps,” he said.

On Alaska’s southern coast, winters aren’t too cold and summers aren’t too hot, so heat pumps can easily maintain comfortable temperatures. And communities like Juneau, Sitka and Ketchikan have clean, renewable electricity in the form of hydropower, while Kodiak combines hydropower with wind power. When heat pumps plug into those grids, they’re essentially emissions-free.

But even when running on diesel power, heat pumps can save homeowners 25% to 50% on their energy bills compared to traditional oil-based heating systems.

“That’s really a huge boost, particularly in our rural communities,” said Robert Venables, executive director of Southeast Conference. “And that’s one of the key focuses of this project, where more than half of the funding is actually going to those small rural towns that are struggling with heating costs.”

The new funding will establish the Accelerating Clean Energy Savings in Alaska’s Coastal Communities Program, administered by the Southeast Conference and AK Heat Smart, with assistance from the Alaska Municipal League. The program will provide financial incentives for heat pumps in communities from Ketchikan to Kodiak. Homeowners are eligible for rebates ranging from $4,000 to $8,500, depending on household income.

The program proposal was selected from more than 300 applicants from across the country who submitted bids under the EPA’s Climate Pollution Reduction Grant program. Ultimately, a total of $4.3 billion was distributed to states, local governments and one tribe for 25 projects that will reduce greenhouse gas emissions across the country.

The biggest potential hurdle to the success of this program, Romanoff says, may be the labor force. There’s money for heat pumps, but there aren’t really enough people to install them. He hopes that more HVAC professionals, plumbers, electricians and even companies that traditionally service oil boilers will go all-in on heat pumps after this funding announcement.

“This is an opportunity to grow a business, to start a business, to enter the space and recognize that this is where it’s going, especially with this kind of cash injection,” he said. “This is a great time to get on the train and come with us as we leave the station.”

The program is expected to officially launch next spring.