MONTPELIER -- Money from Vermont's statewide energy efficiency program could be used to install electric heat pumps -- and insulation in the houses where they are going -- under legislation endorsed Friday by the Vermont Senate.

The program, Efficiency Vermont, traditionally used money raised through a charge on electric bills to help people install more efficient lighting, appliances and business equipment.

In 2008, the Legislature expanded EVT's mission to include thermal efficiency -- insulation of buildings to save on heat -- but required that funding for that effort come from sources other than the charge on electric bills.

Given preliminary approval on a Senate voice vote, the bill would allow some money from the electric charge to be used for weatherization, in homes that install a new generation of high-efficiency heat pumps that are rapidly increasing in popularity in Vermont.

People who install heat pumps are finding they can cut their heating bills in half over the cost of older technologies and energy sources, including oil and propane furnaces and electric baseboard systems, said Sen. Mark MacDonald, an Orange Democrat and a member of the Senate Natural Resources and Energy Committee, who described the legislation to his Senate colleagues.

The heat pumps, essentially reverse refrigeration units that extract heat even from cold outside air, use electricity, too, but far less than traditional electric baseboard systems.


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They can be reversed in the summer to cool indoor spaces.

Their increasing popularity has caused worry about increasing demand on the electric grid, with consequences possibly including a demand for new power lines and generation, which MacDonald said likely would drive up electric costs.

One problem is that much cheaper heat might lessen the incentive for people to tighten up their homes against cold weather, MacDonald said. People who've never had air conditioning might be use the heat pump to cool air, too.

One of the goals of EVT was to cut Vermont's electrical usage overall, said both MacDonald and George Twigg, EVT's director of public affairs. They said using money from the charge on electric bills for weatherization would help pursue that goal by reducing power demand from homeowners using the heat pumps.

"If you weatherize a house that uses a heat pump, you're saving electricity," Twigg said.

EVT in the past has set up financial incentives for people to install more efficient light bulbs and appliances, as well as guiding them on which products are best, and likely would take the same approach with heat pumps. Twigg said EVT does not sell the products it advises people to install.

In the case of heat pumps, some work much better in Vermont than others, he said. "Not all heat pumps are created equal when it comes to cold climate performance," Twigg said.