This commentary is by Richard Cowart and Chris Neme. Cowart is a principal at RAP, a global clean energy nonprofit based on Montpelier, and a member of the Vermont Climate Council. He lives in Calais. Neme is a principal and co-founder of Energy Futures Group, a clean energy consulting firm based in Hinesburg. He lives in Shelburne.
Vermonters opening their oil bills recently have gotten some shocking news: The retail price of fuel oil has risen by more than $1 per gallon since this time last year and almost $2 per gallon since summer 2020. Propane bills are up 50 cents a gallon in the past year and by more than a dollar since summer 2020. These price increases remind us, once again, that fossil fuels are expensive and unpredictable as ways to heat our homes and businesses.
Fossil heat is also highly polluting. The thermal sector (heat for buildings, hot water and some commercial processes) is Vermont’s second-largest source of climate pollution. Fossil heating fuels — fuel oil, kerosene, propane and natural gas — make up 34% of our state’s greenhouse gas emissions. Other, cleaner sources of heat are cheaper and less volatile.
Fossil heat is also a major drain on Vermont’s economy, costing more than $750 million annually. It’s crazy when you think about it, but we are paying that hefty price to import fossil fuels that, responsibly, we don’t actually want to burn.
You might be thinking, “There must be a better way.” Well, there is. It’s called the Clean Heat Standard.
The Clean Heat Standard, or CHS, is a performance standard applied to fossil fuel wholesalers and importers requiring them to provide increasing amounts of non-fossil heat services to Vermont customers over time. The CHS is similar to other performance standards in the energy world, like the Renewable Electricity Standards and Energy Efficiency standards, that have succeeded in Vermont and dozens of U.S. states and other countries.
The Vermont CHS has been closely studied in a yearlong effort by a working group that included energy experts, fuel dealers, environmental advocates, weatherization and efficiency providers, utilities, and public officials. Our detailed white paper sets out how it would work.
The clean heat proposal was adopted by the Vermont Climate Council as a key element in the new Climate Action Plan, which urges the Legislature to “adopt legislation authorizing the Public Utilities Commission to administer a Clean Heat Standard … by the end of the current session.” The Legislature is hard at work on a bill, now in the House Energy and Technology Committee, that would deliver on that mission.
What is “clean heat”?
The goal of the CHS is to replace fossil heat in Vermont with less volatile, less polluting and lower cost heating services — what we call “clean heat.” A wide range of clean heat solutions are eligible, including weatherizing homes, electric cold-climate heat pumps, biofuels and renewable natural gas, district heating systems, pellet stoves and other advanced wood heat systems. The CHS does not require fossil heat companies to provide any particular type of heating fuel. They just have to deliver or pay for some mix of clean heat solutions in line with Vermont’s legally binding greenhouse gas requirements. Individual customers are not required to switch fuels, but the CHS will provide a range of options — as well as financial and technical support — when they are ready to improve their heating systems. No rocket science is required — Vermonters know how to deliver all of these clean heat solutions.
What will it cost?
Our analysis found the Clean Heat Standard can be rolled out efficiently and at low cost to consumers. This is true for a few reasons. First, many clean heat solutions are simply cheaper than fossil heat for Vermont customers. At current prices, switching a home from propane heat to a cold-climate heat pump can save the average Vermont homeowner about $900 per year. Pellet stoves deliver heat for less than the cost of fuel oil, and heat pump hot water heaters are almost always cheaper than other hot water options.
Also, tradeable clean heat credits can be earned by anyone who delivers any of the clean heat solutions to Vermont customers. This includes heat pump and HVAC contractors, weatherization agencies, fuel dealers selling biofuels, shops selling pellet stoves, utilities helping customers to install heat pump water heaters and many others. Competition among all of these providers will keep the costs of fuel-switching in check.
The legislation would also provide a safety valve to keep the costs of change low and includes a requirement that a progressive fraction of clean heat savings must be provided to low- and moderate-income households.
What’s the future for Vermont’s heat providers?
In Vermont’s climate, we need reliable, affordable heat. Changing the heating systems and fuels we all rely on is no easy task. It requires “boots on the ground,” and those boots have to be filled by trusted installers, technicians, truck drivers and more. The Clean Heat Standard would require change at the pace of 4% to 5% per year. This would give our fuel providers time to change the mix of services they provide and to learn by doing. We want them to thrive in a world less reliant on fossil fuels. The CHS is designed to support our valued fuel suppliers to make this change.
Performance standards work
Using performance standards, Vermont has successfully moved to an electric system that is much more efficient and much greener than it otherwise would be. Performance standards and competition have lowered the cost of solar and wind power by 90% in recent years, and efficiency measures now in place will save Vermonters more than $2.8 billion. However, change in the thermal sector has been painfully slow. It’s time to learn from our successes and tackle the fossil heat challenge — it’s time to adopt the Clean Heat Standard.
