(Bloomberg) -- Heat pumps were invented in the 1850s, and they’ve been used in houses and businesses since the middle of the 20th century. While they’re very efficient at heating and cooling, that doesn’t mean they aren’t due for an upgrade. 

It’s more complex to design and install a heat pump — which extracts heat from an external source like the air, ground or water, and transfers it into a building — than a gas boiler or furnace. Heat pumps also traditionally rely on refrigerants that pose a risk to the climate, and for users more accustomed to burning fossil fuels for heat, they take some getting used to. 

Companies are paying more attention to improving and refining heat pumps as they go mainstream and more people rely on them for heating and cooling their homes. Some technologies, like using magnets in heat pumps, or compressors borrowed from NASA, are still in relatively early stages of development but promise huge efficiency improvements. There are other technologies, though, on the market right now. While many options might cost more initially, prices are likely to drop as these technologies go mainstream. 

Here are five ways companies are working on barriers to the heat pump rollout.

Better refrigerants

Heat pumps run at relatively low temperatures, ideally 35C to 45C (95F to 110F), compared to 60C to 80C for gas- or oil-fired boilers or furnaces. 

They’re designed to run “low and slow,” working for longer periods than a boiler or furnace, which might be turned on and off a couple of times a day to provide a more intense blast of heat. Homes designed to be heated at higher temperatures need some modifications like new insulation to ensure things stay comfortable.

This is partly because the refrigerants typically used inside heat pumps don’t work well at those higher temperatures. But that is changing. Heat pumps that run at higher temperatures have been around for a while, says Patrick Crombez, the general manager for heating and renewables at Daikin Europe. The company has been selling a high-temperature model since 2009 that’s a “plug-and-play” option for homes heated with fossil fuels. 

What’s new is that heat pumps increasingly use propane as a refrigerant to absorb heat from the outside air and release it indoors. Propane can be compressed more than other refrigerants, and more compression means higher temperatures. “As a result, it is to some extent easier to develop systems that are running towards 70, 75 degrees,” he says. 

The trade-off is that these types of heat pumps can cost more upfront and to run, says Russell Dean, residential product group director at Mitsubishi Electric. Propane is also flammable, posing challenges around manufacturing and maintenance, and in the US, regulation means propane heat pumps are unlikely to become widespread in the near future. But they can still make sense where efficiency upgrades aren’t easily made — and they can also run at lower temperatures, too. 

There’s another reason propane is catching on. In the 1980s, the most commonly used refrigerants were banned because they were causing holes in the ozone layer. They were replaced with what are called HFCs, which don’t damage the ozone layer but do contribute to climate change in a big way. 

The refrigerant R410a — commonly used in air conditioners and heat pumps — has a warming impact 2,088 times greater than carbon dioxide. While refrigerants shouldn’t be released into the atmosphere, the reality is that they can be when equipment is damaged or repaired incorrectly. 

Manufacturers are increasingly looking at using low global warming potential refrigerants like propane as regulators in the US and Europe set deadlines to phase out HFCs. “Most of the heat pump companies are launching, planning to launch or have already launched a set of products using propane as a refrigerant in the air-to-water space,” says Jürgen Fischer, president of Danfoss Climate Solutions, part of the Danish engineering company.

No refrigerants at all

An even more cutting-edge idea is to do away with conventional refrigerants altogether. This is the plan of Magnotherm, a German startup that uses a technology called the magnetocaloric effect, which warms metal by magnetizing it. The company isn’t targeting the domestic heating space yet  — its first product is a commercial chiller — but it could feasibly be used for that purpose, says Max Fries, the company’s co-founder and chief operating officer, and that might be something they look at in the future. 

There are other ways to make a heat pump without conventional refrigerants. Thermoacoustic heat pumps use sound to compress and expand helium, while barocaloric heat pumps apply pressure to certain types of solid materials. These may be destined for niche use, though.

“What these ‘caloric’ technologies have is they are inherently much more efficient than a traditional gas compression and expansion cycle, but they're also technically much more demanding,” Fries says.

Better compressors

Heat pumps start to lose efficiency in extremely chilly weather. But there’s a way to ensure that doesn’t happen: improving the compressor that circulates refrigerant. The larger the variability in temperature one can manage, the better it works in lower temperatures. 

One organization that knows how to run a heat pump in very cold weather is NASA. It uses them on satellites in extremely cold temperatures, says Steve Walker, chief executive officer of Evari, a US startup working to bring the space agency’s technology to Earth. 

Its compressors are smaller and have one moving part — an internal wheel that moves faster than the speed of sound. This makes the internal heat exchange more efficient, says Walker. The biggest advantage is its ability to cope with big heat extremes, whether keeping a home warm in the dead of Midwestern winter or cool at summer’s peak in the South, without losing too much efficiency.

Better use of space

Air-source heat pumps typically need about 3.5 square meters (38 square feet) of space outdoors. But several companies are working on making heat pumps for small spaces, like flats with no external space. 

Some individual air-source heat pump models are designed to sit outside an apartment building or on a balcony. In New York City, window-mounted heat pumps made by the startup Gradient and the global manufacturer Midea are being installed in public housing. Another route is to connect every apartment to one heat source, like the ground. Refrigerators and other sources of cooling also emit heat. (Just put your hand near the coils on the back of a fridge.) That waste heat can be harvested and pumped into the ground, where it can be stored for warming homes. And because it’s already been warmed up, extracting it takes less energy, reducing running costs. 

Kensa, a British manufacturer of ground-source heat pumps, recently launched a small “shoebox” heat pump, which takes up little space in an apartment and can be independently controlled. Designed to be used in a dense block of flats or streets with large ground-source heat pumps, it runs as efficiently “as a really big expensive heat pump, but in something the size of a microwave that goes in a kitchen cupboard and allows that really high efficiency which results in lower running costs, lower electricity bills,” says Tamsin Lishman, the company’s CEO.

More efficiency

In the US and Europe, electricity is often more expensive than gas. This makes the case for getting a heat pump more difficult, even for those with top-of-the-line efficiency.

But there are gains to be made. This is what Evari aims to do, says Walker. The company’s big sell is that the compressor’s efficiency doesn’t drop nearly as much in frigid weather as a standard heat pump does, making it cheaper to operate. Overall, though, it’s hard to raise efficiency far above the four to five-fold level seen in the best-performing heat pump systems, says Crombez. After that, costs start going up “exponentially.”

The solution may not be technological, though. Instead, policies and billing approaches could reorganize how homes pay for electricity and gas. Some companies in the UK and Europe are trialing special pricing structures designed for heat pump use, which offer lower electricity prices at certain times of the day. Combining a heat pump with a battery and filling the battery up with low-cost overnight electricity or solar power is also a good hack for homeowners trying to maximize the efficiency of their heat pump with minimal cost. 

“The integration of the heat pump in a home system with solar photovoltaics, in the UK potentially with dynamic tariffs, I think that that’s where the end user will find the benefit,” says Crombez. 

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