Funds Available to Develop HVAC Decarbonization Technologies

The California Energy Commission has announced the availability of up to $20 million to support applied research and development projects that develop decarbonization solutions for heating, ventilation, and air conditioning (HVAC) systems in large commercial buildings.

What is the program’s purpose? The purpose of this solicitation is to develop and demonstrate affordable, promising, pre-commercial technologies to accelerate decarbonization of large building HVAC systems that use low or ultra-low GWP HVAC refrigerants.

Who is eligible to apply? This solicitation is open to all public and private entities with the exception of local publicly-owned electric utilities. All funds must be spent in California, as defined in this program’s solicitation.

What are the project groups? Projects must fall within one of the following project groups:

  • Group 1: Large Hybrid or Stand-Alone Low GWP Electric Heat Pump Systems – Develop and test large hybridized or stand-alone heating and cooling systems that use a heat recovery chiller or heat pump (GWP of 10 or less) to operate during lower load conditions, with boilers and chillers being used during high load situations. Hybrid heating system using a heat pump or heat recovery chiller with thermal storage is also acceptable.
  • Group 2: Ultra-Low-GWP HVAC Heat Pump Advancements – Develop and demonstrate advanced, cost-competitive, high-efficiency large air-source and water-source heat pumps that use ultra-low GWP (less than or equal to 4) refrigerants.
  • Group 3: Other Advanced HVAC Technologies – Develop and demonstrate other types of low or zero carbon, non-vapor compression HVAC technologies for large commercial buildings with GWP of 0.

What are the funding levels and match requirement? The total, minimum, and maximum funding amounts for each project group are provided below. Match funding in the amount of 20 percent is required for this program.

  • Group 1: Large Hybrid or Stand-Alone Low GWP Electric Heat Pump Systems – Total available funding for this group is $12 million. Awards range from $2 million to $6 million.
  • Group 2: Ultra-Low-GWP HVAC Heat Pump Advancements – Total available funding for Group 2 is $4 million. Awards range from $1 million to $ 2 million.
  • Group 3: Other Advanced HVAC Technologies – Total available funding is $4 million. Awards range from $1 million to $ 2 million.

What are the project requirements?

HVAC decarbonization technologies considered for this solicitation must meet all the following requirements:

  • Have high efficiency, minimum Coefficient of Performance (COP) of 3, unless otherwise noted.
  • Use low or ultra-low global-warming potential refrigerants for space conditioning.
  • Use electricity or other low/zero carbon fuel as a power source.
  • Capable of being integrated with other heat pumps and/or thermal systems where an existing boiler could supply a portion of the heating load.
  • Meet at least 25 percent of the peak building design heating load with an electric heat pump, heat recovery chiller, or other low carbon advanced system.

Additionally, all commercial building demonstrations must occur in electric investor-owned utility (IOU) service territory. Technology demonstrations must occur in at least one large commercial building that measures over 100,000 square feet and currently has a hot water or steam heat distribution system. Demonstrations of more than one technology must include separate monitoring and verification (M&V) of project benefits to determine the impacts of each technology. For integration of demand responsive controls, the M&V must include baseline without controls and the operation with the controls to show the load reductions (e.g., shift or shed). Buildings located in and demonstrating benefits to under-resourced communities will receive additional points during scoring.

Which projects will be given priority consideration?  

HVAC technologies that meet the following requirements will be considered more favorably during evaluation and scoring:

  • Has potential to exceed current Title 24 energy efficiency requirements and/or Title 20 appliance efficiency standards.
  • Provides cost-effective energy savings (e.g., payback within the life of the equipment, including reduction in operation and maintenance costs) as shown by demonstration and independent measurement and verification testing, including at least 12 months pre-installation and a minimum of 12 months post installation.
  • Includes controls to enable energy resiliency and grid flexibility to minimize electric load during net peak, such as between 4 pm and 9 pm, and maximizing electricity use when renewable energy is plentiful.
  • Partners with a mechanical system manufacturer to ensure a path for equipment deployment, servicing, and maintenance after the grant is completed.

What is the timeline for this application? The deadline to submit applications is September 15, 2023 by 11:59pm.

Awards are anticipated to be announced by November 15, 2023 with an expected start date of January 20, 2024.

The full Grant Funding Opportunity Solicitation can be found here.

Morrison has extensive experience writing successful applications for clients for CEC programs. For more information on this grant or how to apply with Morrison’s assistance, please contact the Morrison Grants Team by email at or call us at 530-893-4764.


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