A feed-in tariff for air conditioners - yes I'm serious

Air conditioners have copped a lot of flak, but are a very efficient way to heat our homes. Encouraging highly energy-efficient reverse-cycle air conditioners could actually reduce emissions and peak demand if done right.

Reverse-cycle air conditioners are the most efficient and economical heaters to run, but unfortunately you aren't likely to get that information out of your home refrigeration or space-heating contractor.

Renewable heat is what an air conditioner produces in winter, heating your home. The term is now becoming widely understood in the United Kingdom; where the government has announced a Renewable Heat Incentive (RHI) program.  

From March next year UK households wishing to install various kinds of renewable heating appliances, including air-source heat-pumps (the geeky name for a reverse-cycle air conditioner), will get paid a feed-in tariff for the renewable heat that is produced.  

Conceptually, producing renewable heat from your air-conditioner is not much different than producing electricity from a solar photovoltaic panel. You pay the upfront capital cost of the air conditioner. You no longer buy gas and/or as much electricity from the grid, but instead get most of your heating energy by shifting heat in the outdoor environment indoors. 

With an air conditioner you are getting the bulk of your heating needs via the refrigeration cycle. Basically, through the compression and expansion of a gas, an air conditioner is able to concentrate, upgrade and pump the low temperature heat energy outside your house into house, at the sort of warm comfortable temperature you’d like to experience.

What do they pay?

In the UK the renewable heat feed-in tariff has been set at 7.3 pence per kWh ($A0.12). In Victoria this would mean a highly efficient LG  3.2kW reverse-cycle air conditioner which delivers 5.4 units of heat for every one unit of energy it uses (C.O.P. 5.4) would get paid 32 cents each hour to run at full output while consuming $A0.09  (off-peak) or  $A0.19  (peak) worth of electricity and only adding 590 watts of load to the power grid.  

A typical house in Melbourne might use 15,000kWh of heat energy in the winter and could receive up to $1500 a year in feed-in tariff payments. The UK scheme is capped based on an energy audit that is part of the prequalification process to avoid poor quality installations and rorting.

Does this replace insulation, air infiltration and passive solar house design?

Installing a reverse-cycle air conditioner is the single most economically efficient option when it comes to getting massive energy savings on your heating power bill. However, reducing energy wastage and inefficiency also doesn't hurt.  

Under the UK scheme houses are required to get an energy efficiency audit and upgrade – which basically means insulation and air infiltration check – before an air-source heat pump installation can be approved for payments under the RHI.

What about Australia's peak electricity cost problem which has been driven by air conditioner use?

In order to make sure that an Australian Renewable Heat Incentive scheme doesn't cause anymore unnecessary grid upgrades, approved installations would need to be attached to a smart meter (an upgrade for most people except in Victoria) and accept up to 20 hours of their air conditioners being interrupted each year (during summer) to reduce peak load on the power grid when it experiences high demand.

What about refrigeration gasses?

This is a separate problem, but the commencement of a new scheme would be a good time to phase out HFC and other ozone or climate damaging gasses altogether.  

A three year phase-out should be announced immediately only allowing extremely low Global Warming Potential (GWP) refrigeration gasses such as hydrocarbons or carbon dioxide to be used; some refrigerant gasses i.e. R-113 have 4,800 times the GWP of Carbon Dioxide.

What about Heat Pump hot water?

Heat Pump hot water currently gets support in the form of deemed RECS (renewable energy certificates). Under a properly functioning Renewable Heat Incentive scheme the support for that superior water heating technology could be migrated over to a future RHI scheme.

Why a feed-in tariff and not an upfront purchase incentive?

A feed-in tariff setup in conjunction with an energy audit and the mandated retirement of existing outdated conventional electric and gas household heating systems is that equipment would actually have to be installed, maintained and delivering heat to receive payments which themselves would be capped and could be audited via high resolution smart-meter data. Further spot checks and auditing would be able to compare previous gas and electric bills to see that savings on energy are correlating with feed-in tariff payments. The main alternative of upfront subsidies would risk having plant that is installed and under-utilised or that becomes serviceable creating phantom savings.

Where would the funds come from?

A levy on fossil gas, which is predominately used for space and water heating, would fund this with the resultant incremental cost increase being an additional incentive for customers to give gas the flick and go to cheaper renewable heat energy for their heating needs.

Time to move

Australia needs to take energy and climate security seriously by ending the practice of heating homes using fossil gas (which is highly polluting and very inefficient) and old fashion electrical element heating (i.e. bar radiators) which is not only inefficient, but puts a heavy burden on electrical grids.  

Renewable heat is now recognised in the UK as well as other European countries as a winning idea, it is time Australia capitalised on the massive opportunities renewable heat offers, not only in terms of climate and energy security but massive cost savings if can deliver for households.

Matthew Wright is Executive Director at Zero Emissions Australia.