Home Electrification Fights Climate Change
The concept of replacing gas-powered appliances with electric ones is taking off as homeowners reduce their carbon footprint and save money at the same time.
As the global transition to clean energy gains momentum, home electrification is scaling up to meet increasing demands for sustainable living. This shift brings exciting new opportunities in residential energy solutions, transforming how we power, heat, and cool our homes while reducing carbon emissions and enhancing energy efficiency.
Why Home Electrification is Taking Off
Though home electrification isn’t the only solution to reverse climate change, it’s a significant one. Electrifying homes, which involves replacing fossil fuel-based systems with electric-powered ones, can contribute to reducing greenhouse gas emissions. Here's how home electrification plays a crucial role in mitigating climate change:
Decarbonizing the Grid: As more electricity is generated from renewable sources such as wind, solar, and hydroelectric power, the overall carbon footprint of the electrical grid decreases. Home electrification enables households to take advantage of this cleaner energy, thereby reducing the overall emissions associated with their energy use.
Energy Efficiency: Electric appliances and systems are generally more energy-efficient than those powered by fossil fuels. For example, electric heat pumps are more efficient than traditional gas or oil furnaces. By using energy more efficiently, households can reduce their overall consumption and associated emissions.
Electric Stoves: Offer a cleaner, healthier, and more efficient cooking solution than gas stoves by eliminating pollutant emissions, reducing greenhouse gas emissions, and providing superior energy efficiency, potentially saving millions of dollars in electricity costs.
Heating and Cooling Electrification: Heating and cooling account for a significant portion of residential energy use. Electrifying these systems through heat pumps or electric heaters can reduce the demand for natural gas and other fossil fuels.
Electric Vehicles: As households switch to electric vehicles (EVs), they can charge them using electricity generated from renewable sources. This helps to reduce the emissions associated with transportation.
Smart Grid Technology: Home electrification can be integrated with smart grid technologies, enabling better demand management and stability. These technologies can help balance energy supply and demand, reducing the need for additional fossil fuel generation during periods of high demand.
Distributed Energy Generation: Home electrification can also facilitate the adoption of distributed energy generation, such as rooftop solar panels. This allows households to generate their own clean electricity and reduce the load on the grid, further decreasing reliance on fossil fuel-based power generation.
Healthy Home and Living Environment
Gas stoves are the main reason for polluted air inside your homes. Did you know that homes with gas stoves have nitrogen dioxide (NO2) concentrations that are 50-400% higher than in homes with electric stoves? Besides NO2, pollutants like carbon monoxide (CO) and formaldehyde from the gas stove lead to respiratory problems like asthma. There is a chance of 24-42% of children suffering from asthma if their home uses a gas stove compared to homes with electric stoves.
Electric Appliances are Comparatively Less Expensive than Fossil Fuel Appliances
Recently, RMI analyzed and compared the cost of all-electric and mixed-fuel homes. In New York City, an all-electric home saves $6,800 in net present costs and 46 tons of CO2 emissions over a 15-year period.
The primary reason mixed-fuel homes are expensive is that they have gas furnaces, water heaters, air conditioning, and new gas connections (which carry a median price tag of nearly $9,000). Whereas, if we talk about an all-electric home, we use a single heat pump system for both heating and cooling. Heat pumps are also more efficient than gas heaters and coolers and generate less electricity, leading to electric cost savings.
Electrification will Decrease Carbon Emission Due to Appliances at Home
Residential properties are responsible for ~17-21% of energy-related carbon emissions globally. To decrease this, one thing to do is start using renewable energy sources.
As the proportion of renewable energy sources in the electricity grid increases, the overall carbon intensity of the electricity supply decreases. Home electrification ensures that appliances at home rely on this cleaner electricity, leading to lower carbon emissions. Home electrification often goes hand-in-hand with the adoption of more energy-efficient appliances. Modern electric appliances, such as heat pumps for heating and cooling, induction cooktops, and electric water heaters, are designed to use electricity more efficiently than their fossil fuel counterparts, which results in reduced energy consumption.
Apart from this, you can combine home electrification projects with energy efficiency upgrades to the building envelope, such as insulation, air sealing, and window replacements. This can reduce energy consumption for heating and cooling, further reducing carbon emissions associated with residential energy use.
3 Major Incentives for Home Electrification by US Government
State and Tribal Allocation For Home Energy Rebate Program
The Biden-Harris administration has announced nearly $9 billion in funding for states and Tribes to implement consumer home energy rebate programs through the Inflation Reduction Act. These programs aim to make homes more energy-efficient, promote electric appliances, and cut energy costs. The DOE estimates these rebates will save households $1 billion annually.
Here’s what the program will include:
Rebates for complete house and buildings
Rebates for energy efficiency retrofits range from $2,000-$4,000 for individual households and far more for multifamily buildings.
States to provide rebates for home retrofits:
Get a rebate of up to $2,000 for retrofits reducing energy consumption by 20% or more and up to $4,000 for 35% energy-saving
High-efficiency electric home rebate program to:
The government is planning to develop a high-efficiency home rebate program for tribes with an allocated budget of $225 million
Clean Energy for All - The White House
The Clean Energy for All Act aims to lower energy costs and promote the adoption of clean energy. This legislation provides incentives and rebates to make energy-efficient upgrades more accessible for consumers and small businesses. Here are some home upgrades and rebates you must know about:
Rooftop Solar: Tax credits cover 30% of installation costs, potential state incentives, and average savings of $300 per year or $9,000 over the system life.
Insulation and Air Sealing: Tax credits and rebates for energy-efficient home improvements, including home energy audits to identify optimal upgrades.
Clothes Dryer: Rebates covering up to 100% of costs for purchasing and installing electric heat pump clothes dryers, depending on household eligibility.
Electric Stove or Oven: Rebates cover up to 100% of the costs for electric stoves, cooktops, ranges, and ovens, depending on household eligibility.
Weatherized Windows & Doors: Tax credits and rebates for energy-efficient windows and doors, plus coverage for home energy audits.
Breaker Box: Tax credits and rebates for upgrading home breaker boxes or electrical wiring.
Electric Vehicle: Tax credits up to $7,500 for new electric vehicles and $4,000 for used electric vehicles, with average annual fuel savings of $950.
Federal Income Tax Credits and Incentives for Energy Efficiency
The Inflation Reduction Act of 2022 offers various federal tax credits and deductions to encourage energy-efficient upgrades for homes and commercial buildings. Homeowners can receive up to $3,200 annually in tax credits for energy-efficient home improvements and clean energy equipment. Home builders benefit from updated Section 45L Tax Credits tied to ENERGY STAR program requirements, while commercial building owners can claim deductions for energy efficiency improvements.
Aspects of Home Electrification
1. Switch from Gas-Based to Electric Stove
Gas stoves release pollutants such as nitrogen dioxide (NO2), carbon monoxide (CO), and fine particulate matter (PM2.5) into the indoor environment, which can have negative impacts on human health. Electric stoves do not emit these pollutants, providing a cleaner and healthier indoor environment. If we talk about climate concerns, Electric stoves produce no direct greenhouse gas emissions, as they do not burn any fossil fuels during operation. Meanwhile, gas stoves emit carbon dioxide (CO2) and methane (CH4) during combustion. If the electricity used by the electric stove comes from renewable sources, its greenhouse gas emissions will be significantly lower than those of a gas stove.
Efficiency is another aspect where electric stoves have the upper hand over gas stoves. Where a gas stove uses three units of energy to boil a quart of water, an induction stove needs just one. According to a report by The Environmental Protection Agency, if every stove sold in 2021 were an induction stove, the world would save electricity worth $125 million.
2. Replace your Furnace with Heat Pump
Heat pumps are significantly more energy-efficient compared to oil and gas furnaces. While furnaces generate heat by burning fuel, heat pumps transfer heat from one place to another. An air-source heat pump can provide up to 300% efficiency, meaning it can deliver three units of heat for every unit of electricity consumed. A traditional gas or oil furnace has an efficiency ranging from 80-95%, which means some energy is lost as waste heat during combustion.
Since heat pumps run on electricity, their greenhouse gas emissions are directly related to the carbon intensity of the grid. As the grid becomes greener with increased renewable energy generation, the emissions associated with heat pump operation decrease. In contrast, burning fossil fuels in oil or gas furnaces directly releases CO2 and other greenhouse gases, contributing to climate change.
3. Switch to Induction and Electric Cooktops and Ovens
Replace gas stoves and ovens with electric or induction cooktops and electric ovens. Induction cooktops are particularly energy-efficient and provide precise temperature control. Many of you might be fond of cooking and think that gas flames are more responsive and precise than electric burners. But that’s not right! Induction cooktops warm up and cool faster than gas cookers and offer highly accurate temperature control. Magnetic inductions cook food by generating a magnetic field under the pot and eliminate the need for a burner altogether, reducing greenhouse gas emissions.
The World Needs to Shift from Fossil Fuels to Renewable Energy Sources to Produce More Clean Electricity FAST
As the demand for electricity increases due to the widespread adoption of electric appliances and vehicles, it becomes even more critical to ensure that the electricity consumed is generated from renewable sources rather than simply shifting the burden of gas consumption from one place to another. Integrating increased renewable electricity production into the grid is the key to successful electrification. This involves a combination of strategies:
Expanding renewable energy capacity: Developing more solar and wind farms, as well as other renewable energy sources such as hydroelectric, geothermal, and biomass.
Grid modernization and flexibility: Upgrading the grid infrastructure to accommodate variable renewable energy sources is crucial.
Decentralized energy generation: Encouraging the adoption of distributed renewable energy generation, such as rooftop solar panels and small-scale wind turbines.
Supportive policies and regulations: Governments play a vital role in promoting electrification coupled with increased renewable energy production
Steps Taken By Big Companies to Transform Homes into Virtual Power Plants
One of the more prominent arguments for home electrification is that homes can act as virtual power plants, not for electricity products, but for controlling electricity consumption. It's possible you think of this term as electricity production, but they call large swaths of smart-connected homes power plants because, with the flip of a switch, a utility company can lower the temperature of a house and reduce electricity consumption (lowering the heat in winter or AC in summer) in a big way to avoid turning on a literal power plant.
Logical Buildings and Keyframe Capital Launch $110M Plan to Turn NYC Apartments into Virtual Power Plants
Logical Buildings and Keyframe Capital have announced a $110 million financing plan to install and operate smart thermostats in thousands of New York and New Jersey rental units, transforming apartments into virtual power plants (VPPs). The plan aims to help multifamily buildings save energy and reduce CO2 emissions while addressing the "split incentive" challenge between building owners and tenants. The smart thermostats will be connected to Logical Buildings' VPP platform, which controls temperature settings in real time to reduce energy demand. The first $25 million tranche of investments aims to enable about 100 megawatts of peak load-reduction capacity across several multifamily buildings.
Sunnova in Talks for $3.3B DOE Loan Guarantee to Expand Virtual Power Plants for Low-Income Households
Residential solar provider Sunnova is in discussions with the U.S. Department of Energy (DOE) to secure a loan guarantee covering 90% of up to $3.3 billion for solar loans. The guarantee could help expand Sunnova's "Energy as a Service" offerings, enabling low-income customers to access rooftop solar, backup batteries, and other modern virtual power plant (VPP) tools. The initiative aligns with the Biden administration's goals to combat climate change and provide clean energy benefits to disadvantaged communities.
4 Major Home Electrification Companies
Startups Within Home Electrification
1. BlocPower - Smarter, Greener, & Healthier Home Upgrades
BlocPower is a one-stop-shop solution for energy-efficient upgrades in homes and buildings. They offer proprietary technology to analyze, finance, and implement heating and cooling projects, making them accessible to all. Their services include business consulting, financing, engineering, and construction.
To avail BlocPower’s benefits, customers can follow a 6-step process
Provide property information
Receive a preliminary scope of work (SOW)
Get a lease proposal
Sign the contract
Have the project installed
Enjoy a 15-year maintenance guarantee
BlocPower's lease helps customers enjoy benefits without significant upfront costs, streamlining the process of adopting energy-efficient systems.
2. Lunar Energy - Building an All-Electric Future
Lunar Energy is dedicated to transitioning homes to 100% clean energy, simplifying the process, and promoting a greener, cleaner, and more reliable energy future. They develop an ecosystem of all-electric products, focusing on next-generation home battery systems. Their Lunar Gridshare energy management platform optimizes distributed energy resources (DER) in dynamic markets, connecting with third-party devices and maximizing value for customers and the grid. With over 73,000 residential battery systems connected worldwide, operating in North America, Europe, and Asia, Lunar Energy is transforming how homes are powered, providing increased savings and supporting the global shift to clean energy.
3. Sealed - Providing Comfortable, Energy-Efficient, and Healthier Homes
Sealed modernizes homes by upgrading them with the latest HVAC, weatherproofing, and smart home technology, ensuring comfortable, energy-efficient, and healthier living spaces. They utilize advanced heat pump technology powered by clean electricity, which includes built-in air filtering to maintain healthy and fresh indoor air. Sealed improves insulation and air sealing, reducing drafts in winter and stuffiness in summer while reducing energy consumption up to 3 times. They cover the upfront costs of these upgrades, only getting paid if they successfully lower your energy use.
Sealed also offers plans like the Comfort Plan, which addresses seasonal temperature fluctuations, improves ventilation, enhances home value, and reduces the carbon footprint. This plan includes air sealing, better insulation, smart thermostats, and LED lighting.
The Climate Control plan updates your home with the latest HVAC technology, covering upfront costs, providing more efficient heat pumps, and offering room-by-room temperature control, air purification, and compatibility with homes with or without ductwork.
Overall, Sealed provides comfortable, energy-efficient, and healthier homes by modernizing heating, cooling, and insulation systems while ensuring environmental sustainability.
Startups Enabling and Utilizing Home Electrification
1. Greenwork - Find a Home Electrification Contractor
Greenwork lets you find high-potential contractors with minimal resistance to complete home electrification. It’s trusted by BlocPower, Kopperfield, Quilt, and many more. The platform offers the most detailed data on 350,000 electrical, HVAC, and other electrification-related contractors worldwide.
2. Ohmconnect - Save Energy and Earn
OhmConnect is an energy-saving platform that encourages users to reduce their energy consumption during specific events called OhmHours and AutoOhms. These events typically last an hour, during which users are notified in advance to save energy. By doing so, they help prevent the activation of expensive, pollutant-emitting peaker power plants, benefiting both the environment and their communities. Users are rewarded with Watts, which can be converted into money or used to buy smart home technology to further increase energy efficiency.
OhmHours are scheduled when the grid predicts an energy surge within 24 hours, while AutoOhms occur during an immediate energy surge, offering a shorter warning period. By connecting smart thermostats or smart plugs to OhmConnect, users can automatically power down during these events, maximizing energy savings. OhmConnect's positive environmental impact includes reduced carbon emissions and energy consumption, ultimately benefiting both users and the planet.
3. Logical Buildings - Control Energy Usage and Earn
Local Buildings offers two types of home electrification rewards:
Introducing GridRewards, a free, award-winning app that empowers you to control your energy usage and carbon footprint by alerting you when to reduce energy consumption during key times. Users can earn cash payments and lower their electricity bills all year round. GridRewards events usually occur during hot summer afternoons, and by participating, you contribute to a smaller carbon footprint for your city. You can also refer friends to earn extra rewards and amplify your impact.
Utility companies pay users to reduce energy consumption at peak times, helping maintain system reliability in their communities. Households in the ConEd service area are eligible for GridRewards, which is available on iOS, Android, web, and SMS.
Additionally, the company offers cutting-edge technology for the built world to unlock energy and IoT data in buildings, creating continuous savings and sustainability achievements called SmartKit. This approach reduces utility costs, energy consumption, and energy supply cost risk while also enhancing building health and lowering carbon emissions. Their suite of analytical tools helps manage energy cost risk, track sustainability goals, and deploy IoT devices for building health monitoring and fault detection diagnostics.
4. SPAN - Regulate Your Electricity Usage
SPAN is a smart electric panel that gives you actionable insights into your home’s energy consumption and production. Via SPAN’s mobile app, you can get circuit-level control for every electric appliance in your house. The app also gives you insights into your energy usage patterns throughout the day, showing you when you use energy the least or the most so you can prioritize the must-have circuits to make your home battery last longer during power outages. The panel can be integrated with Tesla Powerwall, Enphase IQ battery, LG RESU, and SolarEdge Energy Bank.
If you enjoyed this article, share it with your network and subscribe to Warming Up to Climate Tech. This publication is brought to you by Inbound Growth Co - content for climate-focused brands.