Electrification of the Building Sector

Residential and commercial buildings account for about 30% of all greenhouse gas (GHG) emissions in the U.S. Electrification of the sector will be critical to achieving decarbonization, but it raises concerns around equity, affordability, logistics, public health and other serious issues. The Stanford Woods Institute for the Environment hosted a recent virtual conversation on the topic, featuring U.S. Senator Martin Heinrich (D-NM), a member of the Senate’s Energy and Natural Resources Committee and vocal electrification advocate, as well as experts from Stanford and the Rocky Mountain Institute (RMI).

Watch the video from this event. Read our related story about a new Stanford study on the health and climate impacts of natural gas stoves and appliances.

Incentivizing Widespread Electrification

Heinrich leads an effort in Congress to build a coalition of lawmakers who are committed to accelerating widespread electrification. In April, he joined 19 senators to introduce the Electrifying America's Future Resolution. The resolution lays out a framework to advance widespread electrification of American appliances and machines in the residential and commercial sectors. Along with other members of Congress, Heinrich has also established the first bicameral Electrification Caucus and introduced the Zero Emissions Homes Act, which would establish a point of sale rebate program for new electrified appliances. While acknowledging that the Build Back Better Act, which includes a version of these rebates, has hit roadblocks in the Senate, Senator Heinrich said he is confident Congress can find a way to get many of these climate investments passed. 

There are many electric alternatives to the millions of gas water heaters, furnaces and other appliances common in households across the nation. Heinrich emphasized that the goal with electrification is to allow people the choice to replace appliances with efficient electric alternatives for the same price as the old combustion technology.

Indoor Air Quality and Public Health

While many people understand the GHG impacts of gas stoves and home appliances, thinking about the health impacts is less intuitive, said Rob Jackson, a professor of Earth system science at Stanford. As someone stands over their stove they breathe co-produced gases and pollutants that come from the flame, such as carbon monoxide, formaldehyde and nitrogen oxide, which can trigger asthma and breathing difficulty. The concentration of gasses and pollutants in the air depends on how big the kitchen is, how ventilated the home is, whether there is a hood, and the quality of the hood. 

From an environmental justice perspective, people in lower income areas tend to have smaller kitchens where gases build up to higher concentrations, explained Jackson. They have poor ventilation equipment and are less able to afford swapping out appliances. Replacing fossil fuel burning appliances can improve health, reduce climate pollution, and create major savings on energy bills.

Equity and Affordability

It is critical to have policies in place that provide targeted subsidies and economic incentives to overcome upfront transition costs, Heinrich said. As more Americans choose electrification, it will encourage manufacturers to produce more and drive down costs. As that demand rises, it will also incentivize tradespeople to train on installing and maintaining electrified technologies, enhancing job opportunities. Discussing his background growing up in a trailer, Heinrich was critical of a two-tiered approach at the U.S. Department of Energy Department which would apply lower and less strict energy conservation standards to manufactured homes that retail for under $55,000, stressing that lower income people cannot afford the high energy burden that comes with low standards and drafty construction. 

It is important to think about the whole home retrofit, especially for low-income households, said Stephanie Greene, managing director of the Carbon-Free Buildings program at RMI. Homes should have tight envelopes, air sealing and the right insulation so owners are not paying more for energy than necessary. Lower income communities and communities of color often spend a much greater portion of their income on energy bills. It’s critical to prioritize these communities, Greene said. 

In California, RMI is working with a coalition of 10 cities and community-based organizations to study what an equitable electrification transition policy for these cities should look like. At the federal level, the Heating and Cooling Relief Act would increase funding for the Low Income Home Energy Assistance Program (LIHEAP) to $40 billion a year to ensure households pay no more than 3% of their income on energy costs.

Economics

In the U.S., there are 70 million buildings that burn fossil fuels on-site, 26 million of which are low-income households. 

Moving to all-electric new construction makes sense economically to focus on first and will allow the construction industry and manufacturers to more easily move towards electrifying existing building stock, Greene said. Pairing requirements on electrifying new building stock with incentive programs to replace gas appliances with electric will speed the transition, she said. 

Without reforms to the ways that rates work and the ways that those costs are allocated, costs will be concentrated on a smaller and smaller number of people who remain on natural gas systems, many of whom might be renters or other lower income communities who do not have the means to cover the upfront costs of electrification or cannot exit the natural gas system for other reasons, said Mike Mastrandrea, research director at the Climate and Energy Policy Program of the Stanford Woods Institute for the Environment. He cautioned that there needs to be a managed transition that involves those communities, and assists with related costs.

There can be extremely high upfront costs to disconnect gas lines - a major barrier to electrification - said Chris Field, director of the Stanford Woods Institute for the Environment and the discussion’s moderator. Field recalled being quoted $10,000 in to do so for his own home. A potential solution lies in branch pruning, a strategic decommissioning or removal of segments of the system to shrink cost over time, along with a reduction in gas usage in certain neighborhoods and in certain parts of the system, according to Mastrandrea who coauthored a related white paper. 

In his closing remarks, Heinrich emphasizing that while some public health and climate challenges can leave people feeling disempowered, switching out home appliances is a concrete way to take control of your health and future.

Questions Answered During the Discussion:

Should everyone with a gas range or water heater transition to an electric appliance immediately or wait until those appliances need replacing?

Whether you should switch to an electric appliance before it needs replacing depends on your means. But taking advantage of moments where appliances do need replacing and enabling someone to move to an electric one for the same cost as an older technology is key.

Does is make a difference how old your gas stove is or what type it is?

Though one might expect that older stoves would leak more, Jackson explained that his research does not show that. Instead, simply the presence of the gas stove leads to more leaks.

Are gas appliances banned in new construction?

In California over 50 cities ban gas in new construction. New York City is the largest population city to require all electric new construction(link is external). 

How can you manage your indoor air quality if you have gas appliances?

Make sure you use your vent hood and check to ensure the hood’s quality. Many hoods do not even vent to the outdoors. Indoor air purifiers may help as well. Tightening fittings and connectors may also help.

How do we change how we regulate investor owned utilities and the setting of rates?

There’s not really one blanket answer to that question. But in general, communities and customers need to be involved in providing input from the beginning on rate-setting processes. 

What happens to the old appliances? Is there a secondary market in gas appliances as a consequence of the push to electrification?

A flood of gas appliances on the market may lower their costs and make it more likely that they are used. Letting most older appliances run their course and replacing them with electric when they burnout is probably the most realistic approach for the majority of owners. However, incentivizing getting older appliances out of the market entirely would be ideal.

Does building electrification increase the risk to national security from possible targeting of the U.S. power grid? 

Electrifying the building sector does not have to decrease resilience, but it’s important to think strategically about distributed energy storage and other means of safeguarding against natural disasters and other disruptions. The natural gas system is also vulnerable to cyber attacks and similar issues, and the electricity grid is not intrinsically more susceptible to these kinds of cascading failures. Creating a single system will enable that system to focus resources on maintaining the system and minimizing the risk. 

What groups oppose electrification efforts and why? 

Gas utilities and some labor unions have expressed opposition likely out of concern for loss of opportunity. Understanding what the transition looks like for workers is key and there is an enormous number of local jobs that are needed to electrify all of the homes and businesses across the country. Members of the builder community have also expressed concern that consumers will not be happy with all-electric homes. This may reflect misperception of customer demand for these types of appliances.

What energy service companies do you see as leading the charge in residential building electrification retrofits? What are the challenges and opportunities for scalability?

RMI is working on a project called REALIZE California Initiative to bring the model of the Netherlands Energiesprong model, which does whole home retrofits for multifamily units in a day, to the U.S.