A new program in Gustavus will provide residents with money for heat pumps.
Incentive payments of up to $500 will be available for homeowners, businesses, agency offices and city buildings to replace their oil-based heating systems with an electric heat pump, thanks to a $20,000 grant awarded by the National League of Cities. Gustavus was one of a dozen cities nationwide selected for the organization’s Advancing Economic Mobility Rapid Grant program.
Gustavus City Councilman Mike Taylor worked on securing the grant for the community of about 600 people. He says heat pumps have been gaining popularity in town for several years. Taylor has installed a heat pump at his own home, and the city invested in one for City Hall.
“We’re a community that really cares about the environment and thinks about climate change and the role of carbon emissions,” Taylor said. “So a lot of people are looking for ways to reduce their impact, and heat pumps are a good way to do it.”
Heat pumps use electricity and refrigerants to cool air in the summertime and warm air in the winter. Because heat pumps run on electricity instead of fossil fuels, many experts consider them a key climate solution. In Gustavus, heat pumps will tap into renewable power from the Falls Creek hydroelectric project, which supplies nearly 90% of the community’s electricity needs.
Heat pumps are also generally more energy efficient than oil-burning systems, which means installing one can cut down on home energy bills. Taylor said that’s especially important in Southeast communities like Gustavus, where heating oil is barged in at costs as high as $6 a gallon.
The cost to install a heat pump typically starts at $5,000, according to the Juneau-based nonprofit Alaska Heat Smart. There are several funding sources that could help to cover those costs. Gustavus’ local utility, Alaska Power and Telephone, offers an additional $500 heat pump incentive payment, and Sealaska shareholders are eligible for another $500 on top of that, funded by the Sealaska Corporation. The federal government also offers tax credits and rebates for heat pump installation through the Inflation Reduction Act.
Taylor says he hopes that all that funding combined will be enough to motivate residents to install a heat pump.
“We’re hoping to make the most of it and maybe get as many as 40 new installations in the community by January,” he said.
Residents can apply to the incentive program now through Jan. 20, 2025. More information can be found on the City of Gustavus’ website.
