Heat pumps are gaining recognition across much of the United States due to their energy efficiency advantages and lower greenhouse gas emissions compared to other building heating and cooling solutions. However, when deploying heat pumps in existing buildings, facility managers still face multiple practical challenges such as cost and construction disruption.

The U.S. Climate Alliance, a bipartisan coalition of 25 governors, recently committed to increasing heat pump installations in their states to 20 million units by 2030. Data from the clean energy think tank RMI shows that there are currently approximately 4.8 million heat pump installations nationwide.

Progress varies by state. In Massachusetts, upfront costs and the complexity of system selection have slowed adoption, leaving it behind Maine, which completed its goal of installing 100,000 heat pumps by 2025 two years ahead of schedule. Maine Governor Janet Mills, a Democrat, has recently proposed a new target of 175,000 units by 2027.

Physical Retrofitting Challenges

The feasibility of retrofitting existing buildings with heat pumps varies from building to building. Ryan Colker, Vice President of Innovation at the International Code Council, stated: "Heat pumps are undoubtedly a mature technology, but simply replacing an existing HVAC system with a heat pump system may not be the best strategy."

Kailash Viswanathan, Energy Director at Arch Energy (a subsidiary of Consigli Construction), points out two major challenges. First is building occupancy. He said: "Retrofitting depends heavily on the occupants. It would be easier if it were centrally planned, but you still need to enter the building, open up walls, and replace piping. In most cases, this can only be done when occupants leave or during tenant turnover." Second is maintaining space heating and hot water temperatures. Heat pumps operate most efficiently at lower water temperatures. Viswanathan stated that retrofits need to lower water temperatures from 180 degrees Fahrenheit to between 120 and 140 degrees. To achieve the same amount of heat at lower temperatures, flow rates must be increased, which means larger pipes are needed. "This requires accessing occupied spaces to remove and replace piping, which is very disruptive. Therefore, retrofit plans often span 10 to 12 years and cannot be completed overnight. Challenging buildings like historic structures may take around 20 years."

Viswanathan's team is involved in the heat pump retrofit of the high-rise building at 345 Hudson St. in New York City, the first project of its kind for the New York State Energy Research and Development Authority, aimed at rapidly electrifying this century-old building. He said: "We help engineers and clients find solutions and identify the best ways to reduce carbon emissions." He added: "Facility managers are always involved in the decision-making process. They need to consider the operational, maintenance, and control challenges of heat pump technology. This involves a lot of automation that they must learn."

Economic Barriers

Another major obstacle is cost. A report by Rosen Consulting Group shows that in 2022, the total cost of converting a typical gas-heated office building in New York State to a ground-source heat pump system was approximately $17 to $24 per square foot, while an air-source heat pump system cost $12 to $21 per square foot. Estimates include heat pump water heaters, necessary infrastructure, and electrical upgrades.

The report notes that heat pump retrofits in office buildings are expected to generate sustained "significant energy savings," but this estimate is based on additional building envelope improvements, which would incur extra costs. The Inflation Reduction Act provides federal tax credits and state-administered rebates that can offset some of the purchase and installation costs.

Doug Davenport, Founder and Executive Director of Prospect Silicon Valley (a nonprofit clean technology accelerator focused on transportation, energy, and infrastructure), stated that facility managers need a clear understanding of the financial costs and benefits of heat pumps, including long-term maintenance factors, to validate deployment decisions. He also noted that managers need more "education and training on aggregating and interpreting actual installation performance results to prove the technology works as reported. This is especially important as a wave of new designs enters the market."

One way to reduce retrofit costs is to adopt hybrid systems. A September report from the National Renewable Energy Laboratory stated that ground-source heat pumps with hybrid heat exchangers can help building owners lower capital expenditures and improve the economic viability of retrofit projects. The laboratory has added functionality to its REopt tool to analyze such systems, helping building managers evaluate combinations of renewable energy, conventional energy, energy storage, and ground-source heat pump technologies to achieve cost, clean energy, and resilience goals.

Concerns About Grid Strain

Despite the direct decarbonization benefits of heat pumps, widespread adoption could strain local power grids, which may lack the generating capacity to accommodate growth from building electrification. Owen Glubiak, Vice President of Revenue at Cortex Sustainability Intelligence, stated: "You can't just install heat pumps without upgrading the grid. Everyone is waiting for the grid itself to become greener."

Cortex recently launched automation features on its building decarbonization platform to help customers reduce energy consumption and carbon emissions. Glubiak stated that using heat pumps in demand response scenarios can alleviate grid strain. "The hottest and coldest days are the most problematic, so demand response programs are crucial for meeting peak demand."

One Piece of the Decarbonization Puzzle

As Glubiak noted, heat pumps are not the entirety of electrification. Thomas A. Kwan, Sustainability Research Director at Schneider Electric, stated that the benefits of building electrification are maximized when facility managers combine heat pumps with solar panels and battery storage systems as part of a complete system.

Colker of the International Code Council recommends conducting a thorough energy audit before deciding whether a heat pump retrofit is economically justified, to gain a comprehensive understanding of "where investments can yield the greatest returns and the best climate impact."

Mark Grinis, Head of Digital Transformation for EY Americas Real Estate practice, noted that facility managers often take a pragmatic approach when upgrading aging systems. "If something breaks, you fix it properly. But would we consider undertaking a very complex retrofit?" he said. The feasibility of heat pump retrofits also depends on location and whether it can attract a broader tenant base and achieve higher economic returns. He added that older buildings might have opportunities to install cool roofs and rooftop solar, but "I think heat pumps appear more often in new construction projects."

According to the International Energy Agency, heat pumps currently meet only about 10% of global building heating demand, far below the deployment levels consistent with the 2050 net-zero emissions goal. The agency calls for more policy support and technological innovation to improve efficiency, reduce upfront purchase and installation costs, and remove market barriers to complex retrofits.