Report touts economic, climate benefits of all-electric homes

Source: By Daniel Cusick, E&E News reporter • Posted: Tuesday, October 20, 2020

Winter is coming, America. Time to turn off the gas-fired furnace and turn up the electric heat pump, a new analysis from the energy-focused Rocky Mountain Institute suggests.

In an update to its 2018 report “The Economics of Electrifying Buildings,” experts at the Colorado-based think tank argue that all-electric, single-family homes are more cost-efficient and have smaller carbon footprints than those powered by a mix of electricity and natural gas.

The analysis, released last week, applies to newly constructed homes in seven major cities representing different climate zones: Austin, Texas; Boston; Columbus, Ohio; Denver; Minneapolis; New York; and Seattle.

“Burning fossil fuels, primarily gas, to heat space and water and cook food poses a risk to climate goals and public health. Thus, spurring the shift to modern, electric appliances like heat pumps becomes critical,” RMI co-authors Claire McKenna, Amar Shah and Leah Louis-Prescott said of the findings.

The natural gas industry contends it remains a viable, low-cost source of household energy and that carbon emissions from an average gas-powered home has dropped annually since the 1980s.

The industry also argues that a rapid transition to electric-powered homes could force power producers to meet higher electricity demand, including from fossil fuels.

“Significant increases in peak electric demand could result in the need for major new investments in the electric grid including generation, transmission, and distribution capacity,” the American Gas Association said in a recent study. Moreover, AGA data shows carbon dixoide emissions from the average gas-powered home have declined 1.2% per year over the last 40 years.

Frank Maisano, a senior principal at Bracewell LLP, represents the heating, ventilation and air conditioning industry as well as clients in the natural gas sector. He questioned whether electricity is cheaper than gas in all regions of the country and said efforts to push all-electric buildings for environmental reasons run up against another imperative — consumer choice.

“It’s one of the big problems with these studies. In a lot of cases, builders and homebuyers simply don’t want all-electric homes,” Maisano said.

But RMI maintains that as buildings become “a cornerstone of ambitious climate policy,” builders and policymakers “recognize they can’t achieve the necessary science-based emissions reductions without tackling this stubborn sector.”

The study assumes a mixed-fuel home contains a gas furnace for space heating, water heater and gas stove, whereas an all-electric house uses a heat pump for heating and cooling and an electric cooktop and oven. In Boston and Seattle, the all-electric home has a lower cost to build, but a slightly higher cost to operate, the study found.

Reductions in carbon emissions from all-electric homes range from 12 tons of CO2 over a 15-year period in Denver to 51 tons over 15 years in Boston, RMI found. The greatest percentage reductions were in Seattle (93%) and New York City (82%). The emissions estimates are based on data from both EPA and the National Renewable Energy Laboratory that project changes in carbon intensity for electricity through 2036.

RMI noted that cities in California, Washington, New York and Massachusetts have passed ordinances requiring all-electric building construction. Other states are considering new policies or incentives to spur the transition to all-electric buildings.

The study recommends measures to promote all-electric building construction, including educating developers, contractors and consumers about the trade-offs of heat pumps versus gas-fired furnaces, even in cold-winter climates.

It also calls for reforming the way customers pay for gas service extensions to new areas and to factor the societal costs of greenhouse gas emissions into the costs for gas- versus electric-powered homes.