Climate advocates are pushing for “building electrification” to get new and existing building off of natural gas altogether through appliance-switching, which would provide significant greenhouse gas savings and indoor air quality benefits (as I discussed last week). Now we have a new study documenting some significant cost savings (as well as emission reductions) that this switch could provide to homeowners who get off natural gas.
Energy and Environmental Economics, Inc. (E3) released the study quantifying the economic impacts of this transition for consumers of various appliances in existing and new residential buildings. Funded by utilities including Southern California Edison, Sacramento Municipal Utility District, and the Los Angeles Department of Water and Power, the researchers analyzed the cost impacts of electric air source heat pumps for space heating and cooling (HVAC), heat pump water heaters, electric and induction stoves, as well as electric and heat pump clothes dryers, compared individually to their natural gas alternatives.
The economic savings were notable. For new residential construction, all-electric appliances with today’s technology would result in lifecycle savings of $130 -$540 per year. It’s less clear though what the savings might be in general for retrofitting existing homes, as it depends on whether the building requires an electrical upgrade for all these new appliances and whether the homes have air conditioning.
The study also evaluated specific technologies in depth, including the key technology of electric heat pumps instead of using gas furnaces to heat homes. These heat pumps work by extracting heat from even cold winter air outside and pumping it indoors, and then pumping hot summer indoor air outside to cool a building.
E3 found the following cost-savings benefits with these heat pumps:
The installation of HVAC heat pumps can result in up to $550 per year in lifecycle savings relative to a combined gas furnace plus air conditioner(AC)system… However, homes without AC incur an extra lifecycle cost of $200 per year by switching to an HVAC heat pump. Heat pump water heaters (HPWHs) generate lifecycle savings of up to $150 per year over gas tankless water heaters in almost all home applications, but in retrofit homes, gas storage water heaters still appear to be the cheapest option… The net lifecycle costs of HPWHs are driven mainly by the capital cost.
Meanwhile, they found that electric hot water heaters generate savings of $150 per year over tankless natural gas heaters in new homes (not retrofits), as do electric cooktops. Electric clothes dryers though are currently more expensive than gas options.
In terms of emissions, the study found greenhouse gas reductions in single-family homes of 30%–60% over a natural-gas fueled home, given the projected electricity mix in 2020, and 80%–90% by 2050, assuming the projected carbon intensity of the grid by that year is realized.
Overall, the study is good news for those pushing for building electrification, as well as for any homeowner interested in making the switch to electric appliances to save money and reduce negative health impacts. With smart policy incentives to encourage adoption of these technologies in the home, from improved building standards to expanded financial incentives, California’s leaders could help homeowners achieve even further savings.
