After recent rate hike, energy consumers search for alternatives to lower utility costs
Many Coloradans are seeing high utility bills and turning to solar energy to power their home. But it's not the only switch you can make.
Contractors are noticing a big spike in customers moving from natural gas to electricity to heat their homes.
It's the hot new accessory for your home this winter.
"Right now, over half the sales appointments are for heat pumps," said Marc Brewer, president of DALCO Heating and Air Conditioning.
He says the demand for heat pumps is up six-fold in the last two years.
"All a heat pump really is is an air conditioner with an added component called a reversing valve," Brewer said. "So, when you turn the refrigerant process backwards the unit will provide heat instead of cooling."
The pump uses electricity as opposed to natural gas but doesn't work well under 35 degrees. So, Brewer recommends Colorado homes opt for a duel system.
"Where when it gets below 35 the heat pump will shut off and the furnace will take over," Brewer said.
The reason for the surge in demand? High utility bills.
"A lot of our customers are giving us feedback that their bills are more than twice what they were a year ago," Brewer said.
According to the Public Utilities Commission, the largest contributors to high bills are a 40% increase in the cost of natural gas and increased usage due to a cold winter.
While base rates are up for both gas and electricity, Brewer says heat pumps are better for customer's wallets and the environment long term, especially when combined with a switch to solar.
"In the future too the writing is kind of on the wall that natural gas prices will continue to climb," Brewer said.
DALCO can currently install a heat pump with one week lead time, much quicker than the timeline to go solar.
Rebates are another thing driving the shift to heat pumps.
Xcel Energy says they paid out $1.2 million to Coloradans in heat pump rebates last year.
The company currently offers rebates of up to $2,000, while Denver's climate action rebate offers $1,500 or 3,500 depending on the type of heat pump installed. There's also a new 10% state tax credit for heat pumps.
Xcel Energy issued a statement, saying:
"We understand inflation is hitting everyone hard, and we want to help our customers who are facing challenges. Our goal as their energy provider is to provide safe, reliable, clean, and affordable energy.
We understand high energy bills can be challenging and we have programs in place to assist our customers who are in need. We work with state and local agencies and advocates for income-qualified customers to provide energy assistance to those in need. Energy Outreach Colorado, the Colorado Energy Office, and the Colorado Low-income Energy Assistance Program help income-qualified Colorado customers with bill payment assistance, free weatherization and energy-efficiency upgrades and HVAC repair and replacement. We encourage our customers to reach out directly if they're having trouble paying their bills with options such as payment plans, energy assistance programs or an Averaged Monthly Payment. To learn more about energy assistance options, customers can visit xcelenergy.com/EnergyAssistance or call 1-800-895-4999.
The driving factor for high energy bills is the increase in fuel costs. The wholesale price of natural gas makes up the largest portion of most customers' bills and is driven by global supply and demand market forces. Natural gas is used to heat customers' homes and businesses and to generate electricity. We pass this cost directly to customers, without mark-up from the company. To be clear, we do not make a profit on the increased wholesale price of natural gas."
