Lower Bills, Cleaner Air: Heat Pump Benefits for Homes Relying on Delivered Fuels

Over 10 million US homes still rely on delivered fuels like oil and propane, which are expensive and polluting. Transitioning these households to air-source heat pumps (ASHPs) and heat pump water heaters (HPWHs) could save US customers nearly $8 billion annually in energy bills and significantly reduce carbon and air pollution. The document advocates for state-level policy changes, such as allowing fuel switching in utility energy efficiency programs and implementing clean heat standards, alongside targeted outreach and contractor training to support rural and low-income households.

• More than 10 million single-family and manufactured homes in the US use delivered fuels such as oil and propane for heating or water, with two-thirds of these homes located in the Northeast and upper Midwest.
• Switching to heat pumps can lead to significant financial savings for delivered fuel households, with an average annual saving of $970 and nearly $15,000 over the equipment's lifetime. If all such customers in the US switched, total annual energy bill savings would reach nearly $8 billion, with the highest individual savings occurring in the Southeast due to low electricity prices.
• Electric heat pumps reduce carbon pollution by approximately 60 percent in the first year for a delivered fuel home, equivalent to 3.9 metric tons of carbon dioxide equivalent (MTCO2e). New York sees the largest state-wide benefit, saving over 4.4 million MTCO2e per year.
• Delivered fuels emit hazardous pollutants including fine particulate matter (PM2.5), nitrogen dioxide (NO2), and sulfur dioxide, which contribute to respiratory and cardiovascular issues, smog, and acid rain. Indoor risks include carbon monoxide and volatile organic compounds from poorly maintained systems.
• Policy barriers exist in 17 states where utilities are prohibited or discouraged from providing energy efficiency incentives to delivered fuel households for switching to heat pumps. The document recommends implementing clean heat standards, which have already been enacted in Colorado and Vermont and are being considered by nine other states (CT, HI, MA, MD, NJ, NY, PA, RI, IL).

APA

RMI (2025). Lower Bills, Cleaner Air: Heat Pump Benefits for Homes Relying on Delivered Fuels. https://rmi.org/resources/lower-bills-cleaner-air-heat-pump-benefits-for-homes-relying-on-delivered-fuels/

Chicago

RMI. Lower Bills, Cleaner Air: Heat Pump Benefits for Homes Relying on Delivered Fuels. 2025. https://rmi.org/resources/lower-bills-cleaner-air-heat-pump-benefits-for-homes-relying-on-delivered-fuels/.

Wikipedia

{{cite report |author=RMI |title=Lower Bills, Cleaner Air: Heat Pump Benefits for Homes Relying on Delivered Fuels |date=7 May 2025 |url=https://rmi.org/resources/lower-bills-cleaner-air-heat-pump-benefits-for-homes-relying-on-delivered-fuels/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rmi2025lower, author = {{RMI}}, title = {{Lower Bills, Cleaner Air: Heat Pump Benefits for Homes Relying on Delivered Fuels}}, institution = {RMI}, year = {2025}, month = may, url = {https://rmi.org/resources/lower-bills-cleaner-air-heat-pump-benefits-for-homes-relying-on-delivered-fuels/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }