Off-grid systems powered by renewable energy could economically meet up to one-third of industrial heat demand in the United States by 2035, according to a paper published earlier this year by researchers at the University of California, Berkeley. The paper, which hasn't undergone peer review, examines the economics of transitioning the manufacturing sector—a major source of U.S. greenhouse gas emissions—away from fossil fuels. The findings suggest that technologies once considered too expensive have become viable alternatives to natural gas.
The Berkeley analysis assessed the cost of delivered heat across low, medium, and high temperature ranges, applying site-specific data to determine renewable energy capacity at more than 3,000 industrial facilities nationwide. On-site wind and solar combined with industrial heat pumps and thermal energy storage prove economically competitive, especially in areas where natural gas prices run high and renewable costs stay low, such as California and portions of the northeast. Heat pumps emerged as the most cost-effective clean option for low-temperature industrial operations below 200 degrees Celsius, while thermal batteries deliver competitive or lower costs for high-temperature processes. However, roughly 27% of total heat demand concentrates in facilities that lack adequate local renewable potential, particularly those situated in urban areas.
"These technologies are a way to have control over the cost and predictability," Jose Dominguez, a research manager at UC Berkeley and one of the paper's authors, told Utility Dive. The report states that "in many cases, electric heating solutions are already at cost parity with fossil fuel-based alternatives, and as renewable energy costs continue to decline, their economic advantage is expected to grow." Dominguez noted the findings should be welcome news for a manufacturing industry heavily dependent on natural gas and its volatile pricing. He added that many U.S. industrial sites have potential to add renewable generation, though "some of the industries are not aware about these technologies."
The paper focused on decarbonizing the industrial sector, which the Biden administration identified as especially challenging to shift away from fossil fuels. Dominguez explained that clean energy technologies have advanced dramatically in recent years—what wasn't cost effective a few years ago has now become economical, though it requires planning and development. The report identifies several obstacles to widespread adoption of renewable-powered industrial heating, including reliability concerns from users who need uninterrupted energy for operations, investment and timeline factors, and space constraints at facilities.
The analysis points to a gap between technological readiness and industry awareness. Dominguez said he was surprised by how many industrial sites across the country could support renewable generation. There's a need for developers to approach industries and demonstrate that new alternatives exist, he noted. The report's findings suggest that as renewable energy costs keep falling, the economic case for electrifying industrial heat will only strengthen—if manufacturers can overcome the practical barriers to adoption.