Terry Slavin writes on the Reuters news website about how air conditioners can play a more positive role in our energy transition.
How AC maker Carrier wants to turn air conditioners from energy hogs to grid assets
Summary
- 40% of U.S. grid is reserved to meet heating and air conditioning peak demand
- By pairing batteries with HVAC, demand could be controlled, freeing up capacity
- Carrier doing in-home trials of its hybrid HVAC with utilities in eight states
- Texas has reformed its electricity market to integrate battery storage
One of the fastest-growing users of electricity is air conditioning, which accounts for about 10% of global power use.
According to the International Energy Agency, the number of air conditioners globally could triple from 2 billion today to 6 billion by 2050, as cooling demand soars in a warming world.
But what if air conditioning units could be turned into home battery systems, which would allow them to store electricity, when needed, and relieve, rather than add, to pressure on electricity grids?
That is the vision of U.S. air conditioning company Carrier, which is working with several U.S. utility companies and the Electric Power Research Institute to conduct in-home trials of its hybrid heating, ventilation and air conditioning (HVAC) unit, which has a built-in battery system.
Hakan Yilmaz is former chief technology officer of Carrier, and is now president and chief sustainability officer of Carrier Energy – a new business unit that the Florida-based company set up early last year.
He said that the batteries would be remotely controlled by Carrier to store excess electricity at noon, when solar panels are at peak generation, and then discharge it to run the air conditioning unit between 6-8pm, when the sun is down but cooling demand is still high, and utilities would otherwise call on fossil fuel power.
By replacing conventional HVAC with millions of hybrid units over the next 10 to 15 years, the lifespan of a HVAC unit, Carrier believes it could free up several gigawatts of power plant capacity that would otherwise have to be reserved to meet air conditioning demand.
The company last year teamed up with Google Cloud, whose AI-powered WeatherNext model will enable Carrier to more intelligently predict energy demand to optimally manage battery charging and discharging.
“Our vision is to transform this massive, uncontrollable, but predictable, (HVAC) load into a load that’s intelligently AI controlled,” says Yilmaz.
“By flattening that HVAC load and moving it to off-peak, we can increase the overall utilisation of the whole grid.”
Carrier is part of RMI’s Virtual Power Plant Partnership, a coalition of nonprofits and companies seeking to unlock the market potential of VPPs.
VPPs are networks of small devices, which either produce or store energy, such as solar panels and batteries, and are pooled together to serve electricity grids. VPP systems have been on the rise in the U.S. since 2020, when the Federal Energy Regulatory Commission allowed them to compete in wholesale power markets.
In a 2024 report, RMI estimated that fully integrating VPPs into the U.S. grid by 2035 could lower net generation costs by 20%, reduce carbon emissions by 7%, add 200 megawatts (MW) of renewable capacity to the grid, and avoid the need for 1.5 gigawatts (GW) of new gas-powered generation units to meet the growing need for power.
California-based Sunrun is VPP leader in the U.S. In November it announced that it had more than 106,000 customers enrolled in home-to-grid virtual power plant programmes, a fourfold increase since the previous year. To date, Sunrun has installed more than 217,000 solar and storage systems, representing 3.7 gigawatt hours (GWh) of capacity.
Batteries for electric vehicles are also performing as virtual power plants to stabilise power grids. Tesla reported last year that it has more that 100,000 of its Powerwall batteries involved in VPPs in states including Colorado, Texas and California, and internationally.
But Yilmaz says its solution would be easier for consumers to install at scale than whole-home batteries. “Because they’re attached to the wall, they need panel upgrades, they need electrician installations, they’re costly. Our batteries are compact and they’re attached to the HVAC. They don’t need any change to the home electrical architecture.”
And the potential for HVAC users to act as VPPs is vast, says Yilmaz, pointing out that 40% of the capacity of the U.S. grid system, or 400 GW, is reserved for heating and air conditioning. Since Carrier supplies a third of the U.S. HVAC market, it alone accounts for 100 GW of off-peak energy demand, Yilmaz says. To put that in perspective: estimated demand from all U.S. data centres combined by 2030 has been put at 80 GW.
The reason for utilities’ interest in VPP solutions is clear. After decades of zero growth, U.S. power consumption, which hit its second straight record high in 2025, is expected to rise further in 2026 and 2027, driven in part by the rapid growth of artificial intelligence.
In September, the U.S. Energy Department launched its speed to power initiative, to accelerate large-scale grid infrastructure projects, exhorting the private sector “to leverage all forms of energy that are affordable, reliable and secure to ensure the United States is able to win the AI race”.
“Speed to power is the biggest problem that the utilities are trying to solve, and we have a really impactful solution (for that problem) that can be scaled,” Yilmaz says.
The company has been working with EPRI to conduct field tests of the hybrid units in 50 homes of its employees, and will this year begin pilot projects of a couple of hundred units each with eight U.S. utilities.
Yilmaz would not name the utilities, but said they cover different climate zones, on the west coast, east coast and in Texas, where the Electric Reliability Council of Texas, which operates the state’s independent power grid and runs its wholesale electricity market, in December reformed its market to integrate battery storage into real-time grid optimisation.
Data from Carrier’s trials will be shared between participating utilities in order to speed up the regulatory approvals that will be needed for the HVAC batteries to be treated as grid assets, Yilmaz says.
Yilmaz says the attraction for HVAC customers to participate will be lower electricity bills, particularly if they are on time-of-use tariffs. “We will own the battery and operate it for the grid, and it will be a leasing program to the homeowner.”
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