Report: Renewables Could Cover a Third of US Industrial Heat by 2035
Off-grid renewable systems paired with industrial heat pumps and thermal storage could economically supply up to one-third of US industrial heat demand by 2035, Utility Dive reports, citing a new University of California, Berkeley paper. The analysis, not yet peer reviewed, examined more than 3,000 industrial sites nationwide and found the approach most viable in regions with high natural gas prices and cheap renewables, including California and parts of the Northeast. Heat pumps came out as the most cost-effective option for low-temperature processes under 200 degrees Celsius, while thermal batteries were competitive for high-heat applications. Report co-author Jose Dominguez told Utility Dive the findings could help manufacturers escape volatile natural gas pricing, though he noted the technology “needs to be planned and developed” and many industrial operators are still unaware it exists. The report also flagged that about 27% of total industrial heat demand sits at facilities, often urban, lacking adequate local renewable potential.
What It Means for Subcontractors
- Electrical and mechanical contractors serving manufacturing and industrial clients should expect early interest in heat pump and thermal storage retrofits first in high natural-gas-price regions like California and the Northeast, per the report’s site-specific findings.
- Firms with industrial electrification experience have an opening to pitch plants directly, since Dominguez says many manufacturers don’t yet know the technology is cost-competitive, a gap consultants and EPC-adjacent subcontractors can fill with site assessments.
- Contractors targeting urban industrial facilities should note the report’s finding that 27% of total heat demand sits at sites with insufficient local renewable potential, meaning grid-tied or hybrid solutions rather than pure off-grid retrofits will likely be needed there.
- No fixed rollout timeline or funding mechanism was specified beyond the 2035 economic-potential window, so subcontractors should treat this as a market signal for future bid packages rather than a near-term project pipeline.
