Heat pumps have emerged as a key building block in the electrification movement, and there is plenty of room to grow. The energy-saving appliances — which can cool as well as heat — have undergone a technology makeover in recent years, enabling them to operate efficiently in colder parts of the US. Take snowy Colorado, for example, where a $200 million federally funded program aims to turbo-boost the market for cold climate heat pumps. Unleashing The Heat Pump Kraken Electric heat pumps are well-known in temperate parts of the US. However, for much of the 20th century and into this one, they were considered inefficient for cold-climate needs. That changed during the Biden administration, when leading heat pump stakeholders participated in the new “Cold Climate Heat Pump Technology” Challenge and benefited from federally funded R&D efforts. State energy planners soon began organizing around the new technology. In 2024, a coalition including Colorado and eight other climate-variable states organized to accelerate uptake, in collaborative effort under the wing of the organization Northeast States for Coordinated Air Use Management. Alongside other initiatives, all that hard work has paid off. Earlier this month the national organization Building Decarbonization Coalition assessed the state of play in the US heat pump industry and found plenty of reason for optimism: Heat pumps outsold gas furnaces for the fourth year in a row in 2025. Heat pumps outsold air conditioners for the first time ever over a one-month period in September 2025. An Oklahoma electricity cooperative has avoided rate increases for eight years after incentivizing approximately 1,650 geothermal heat pump installations, which have reduced peak demand, improved load factor, and lowered its wholesale power costs. BDC also indicates that electric heat pumps have a built-in cost advantage over gas-fired HVAC systems, as utilities conduct expensive upgrade work on older gas pipelines and related infrastructure. “In 2025, gas bills rose 60% faster than electric bills and four times faster than inflation,” BDC reported. “About two-thirds of a typical household’s gas bill now goes toward pipeline replacements and other distribution infrastructure investments, rather than the gas itself.” A $200 Million Heat Pump Program Survives The Trump Chopper As part of his mission to prop up domestic fossil energy producers, US President Donald Trump has been clawing back federal clean power funds that were previously awarded, approved by Congress, or both. However, Colorado’s $200 million grant from the Pollution Reduction Grant program of the US Environmental Protection Agency is still alive and kicking. The funds are part of a $5 billion pot authorized by Congress under Section 60114 of the 2022 Inflation Reduction Act. Colorado has used its share to fund Power Ahead Colorado, a new program under the umbrella of the 10-county Denver Regional Council of Governments. Power Ahead is designed to alleviate persistent barriers to the uptake of climate heat pumps. The technology solutions are in place, but a stubborn bottleneck has settled on both sides of the transaction. Prospective buyers can be put off by financial limitations and the unknowns of identifying a reliable contractor, while contractors need help breaking through the customer confidence barrier. Recruiting a skilled workforce in a growing industry is another contractor challenge that can gum up the works. Free Platform To Connect Contractors And Clients To break through the bottleneck, Power Ahead supports the new online resource and marketplace Colorado Contractor Hub, a partnership with the Building Decarbonization Initiative. The Contractor Hub launched in January with the aim of connecting contractors and customers. In the latest development, leading utility Xcel Energy and the 10-county Denver Regional Council of Governments announced the formation of a new partnership to stimulate Contractor Hub activity among contractors and clients. The free online platform provides customers with a online assessment tools and a vetted list of qualified contractors. It also includes information on rebates and other available forms of financial assistance to customers, along technical and financial information for contractors. “Heat pump contractors are the lifeblood of the clean-energy transformation,” explained Clay McCombe, Power Ahead Colorado Workforce and Industry Lead, in a press statement emailed to CleanTechnica. “Solutions like the Colorado Contractor Hub demonstrate our understanding of the complex environment in which contractors operate and our commitment to addressing their needs,” McCombe added. Heat Pumps Are Coming For Your Fossil Fuels Of course, the electricity to run the heat pumps has to come from somewhere, and it’s not necessarily going to come from clean power. Trump’s backwards-looking energy policy has not been helpful in that regard, to put it mildly. His Republican allies in Congress can shoulder their share of responsibility for that. The new tax bill, passed by the Republican majority last July, eliminated substantial utility incentives for clean power. The leading energy conglomerate PacifiCorp, for example, cited the new tax bill when it a new long term plan for Wyoming, Utah, Idaho and California that excludes new wind and solar assets for a period stretching from 2027 until 2045. Still, other leading energy stakeholders are continuing to offer more support for more clean power to run more heat pumps. Xcel Energy, for example, is pushing forward with a new intrastate transmission line that loops around 12 wind- and solar-rich counties in Colorado. Under Colorado law, Xcel does not have exclusive interconnection rights to the new power line, enabling other renewable energy developers to pile on. In the meantime, the heat pump market continues to expand and attract investors, too. Last December the startup Quilt, for example, earned $20 million in Series B funding, supporting the firm’s expansion from California into other states. Newcomer Marino Energy also illustrates how quickly the market is moving. The company has come up with a low-cost, all-in-one heat pump that eliminates the need for an outside unit while trimming installation time down to one hour. Stakeholders are also moving beyond heating and cooling to address hot water heaters. Industrial and commercial-scale technologies are also emerging. Keep an eye on industry leader Carrier, which began trialing a supersized, 10-14 ton rooftop heat pump technology last December in chilly upstate New York. When last heard from, Carrier was also assessing a 15-ton version of the technology at Oak Ridge National Laboratory in Tennessee, with a field test planned for a location in Pennsylvania to come. Image: New energy efficient, cold-climate electric heat pumps are beginning to outsell gas, and there is plenty of room for the market to grow as ratepayers scramble to reduce their utility bills (cropped, courtesy of Power Ahead Colorado).
+16 others
