Money begets more money
By Rob Smith / ecoRI News staff
But 14 months after the program launched in September 2023,
it’s falling seriously behind on its goals. Much of the rebates, ecoRI News has
learned, have instead trended toward Rhode Island’s wealthier and whiter
neighborhoods, despite an income-eligibility program that can pay for the
complete cost of a heat pump installation.
The program, which is actually administered by the
Massachusetts-based company Abode Energy Management, was announced in 2022 as a
way to spur heat pump adoption in Rhode Island. The $25 million funding the
program was sourced primarily through the state’s share of American Rescue Plan
Act dollars.
Rebates are calculated based on the size of the system being
installed, and are available for homeowners and businesses. The amount of the
rebate typically ranges between $2,000 and $5,000.
The program also has income-eligible rebates, which cover
the complete cost of a heat pump system and installation, making it free for
low-income residents. It’s this category that supports Rhode Island’s
environmental justice communities, according to the program website.
EDITOR'S NOTE: We installed a second heat pump, a split-unit that qualifies for a rebate (still waiting). To us, it was not just the right thing to do, but also makes good economic sense. The upfront cost was $1800. That cost is substantially recouped through the state rebate and the federal tax credit, not to mention the cost-savings from lessened heating oil use. But you're far more likely to take advantage of all these benefits if you have the upfront cash.
Obviously, higher income communities will have more people with the upfront money than poor communities (duh!). Solar panel installation calls for the same math, except the upfront cost is generally higher. To make this program work, there has to either be financing or perhaps the state needs to be the ones to handle the finances of the deal directly with the installer. - Will Collette
Between September 2023 and the end of October 2024, Clean Heat R.I. issued or reserved 3,191 total individual rebates to homeowners and business owners, according to data obtained by ecoRI News via a public records request. The number includes rebates the program has paid out, as well as rebates it calls “reserved,” meaning applications that have been accepted into the program but have not had their projects completed.
Of that total, 1,167 — well over a third of all rebates
counted by the program — went to just 10 zip codes in Rhode Island, which
represent some of the state’s wealthiest enclaves.
In terms of actual dollars, by the end of October, the 10
communities represented by the zip codes received $3.74 million in rebates from
the program’s funding, around 34% of the total money paid out. Another $0.93
million is pending, according to data provided by the state Office of Energy
Resources (OER).
Those 10 zip codes receiving the lion’s share of CHRI
funding include communities such as Barrington, Bristol, East Greenwich,
Narragansett, South Kingstown, and Providence’s East Side, each with median
household incomes well above the state average of $81,860 annually.
“The Justice 40 Initiative seeks to ensure that program
benefits, including both financial and non-financial resources, reach
disadvantaged communities,” Natalie Bishop, OER’s communications coordinator,
said. “The CHRI program team has conducted research and built relationships in
order to enhance targeted outreach to disadvantaged communities in the second
and third program years.”
Meanwhile, the income-eligible incentives haven’t kept pace
with promises made by state officials. Latest data from the CHRI
dashboard shows the
program has paid out $2.1 million in income-eligible incentives, with another
$1.174 million yet to be paid out.
Bishop said the commercial program in its first year had
come closest to meeting the 40% benchmark, when 38.5% of business incentives
were spent in environmental justice communities, according to Bishop. The rest
of the results were much lower: only 5.4% of the residential incentives, and
9.4% of income-eligible incentives, were spent in environmental justice
communities, for a total of only 12% of incentives in the first year getting
spent in environmental justice communities.
Bishop said OER remained focused on reaching the 40% goal.
“CHRI dedicated significant resources to disadvantaged communities through
consultations, contractor support, and site visits, offering personalized
support to help these communities transition to clean heating,” she said.
“These efforts, though not fully reflected in incentive data, represent a
critical part of our commitment to equity and support for vulnerable
populations. We anticipate the Justice 40 benefits will reflect our year one
investment in building relationships and trust in these communities.”
Getting home heating to net-zero
Heat pumps are a key part of the state’s renewable energy
transition away from fossil fuel infrastructure. Similar to other states in the
Northeast, Rhode Island is heavily reliant on natural gas from distribution
pipelines and delivered heating oil to provide heat.
Until recently, most residents did not have many green
options for heating their homes or businesses during the winter, unless they
wanted to invest in a wood stove, which has its own drawbacks as a heating
source.
Around 53% of state residents rely on natural gas to heat
their homes, with another 29% relying on home heating oil, according to the
federal Energy Information Administration. In addition, 4.7% use propane. Only
11.6% of state residents heat their home with electricity.
Air source heat pumps pull heat from one air mass and
transfer it to another — heating by moving energy into the building and cooling
by moving it out. (Chris Kent)
Heat pumps are an attractive alternative. They fit well into
existing ductwork from central air, or mini-split units can be easily installed
in the walls of a home. In addition to providing heat during the winter, they
can also provide cooling in the summer.
A significant advantage, and disadvantage, is the system’s
reliance on electricity. It’s what can reduce a business or home’s heating
emissions since they aren’t burning fossil fuels. The downsides are it’s
ultimately only as emission-free as the electricity that’s being produced, and
most electricity consumed in New England is derived from natural gas-fired
power plants.
The other disadvantage is cost. Heat pump units can be
expensive to put in, it’s not an easy home improvement project for most people
to knock off in a weekend, and they ideally should be installed by qualified
HVAC professionals.
It also ties the homeowner to electricity costs. Electricity
use will go up with every heat pump unit put in, and several can be required
for even modest homes. This ties a resident to electricity prices, which are
often cheaper than home heating oil, but are often more expensive than
comparative natural gas rates.
Electricity prices are likely a key reason why wealthier
communities have received the bulk of the rebates. The program’s design
excludes income-eligible participants of the program from participating if they
currently heat their homes with natural gas. State officials told ecoRI News
last year the exclusion was to avoid saddling the program’s participants with
utility bills much higher than they paid previously.
The state’s housing crisis is also likely dampening the
impact of the program on Rhode Island’s frontline communities. Homeownership is
a prerequisite for the residential side of the program; you have to own the
building you live to make such significant investments in its heating and
cooling infrastructure. Lower-income residents in Rhode Island are less likely
to own a home, especially as the cost of housing has skyrocketed since the
COVID-19 pandemic.
A tale of two cities: Providence
How the rebates have been distributed in Providence so far
shows how much affluent areas have benefited. Providence as a whole has been
the top rebate-getter, with 315 rebates awarded to Providence addresses by the
end of October.
But nearly half those rebates, 153, have been awarded to
addresses in one zip code, 02906, which includes the city’s East Side, College
Hill, and other affluent neighborhoods. Addresses on that side of the city have
been paid $447,075 in program money, with another $67,000 held in reserve.
It’s the zip code with the highest median income in the
city, around $98,000 a year, according to estimates from the 2022 American
Community Survey.
The comparison with other areas of Providence is staggering.
Area code 02905 includes Washington Park, waterfront neighborhoods in
Providence, and the Cranston neighborhood of Edgewood. Since the program’s
start, 49 rebates have been awarded or assigned to addresses in this zip code,
but only seven of them are for south Providence addresses; the remaining 42
were given to Cranston residents.
The Providence side of the area code is one of the state’s
most notorious sacrifice zones, with high populations of Black people and
Hispanics, and lower-than-average median household incomes compared to the rest
of the city.
It’s also an area facing well-known issues of environmental
justice, with a long history of pollution from businesses and industries in and
around the Port of Providence that have wrought serious public health impacts
to nearby neighborhoods.
But the good news is there’s still plenty of time left in
the program to meet the environmental justice goals. Clean Heat R.I. is running
for a three-year period, until Oct. 31, 2026, or until the program runs out of
money, whichever comes first.
