49 Million Homes Are in the Money. Is Yours?
April 16, 2021
By now, you likely know our perspective on how to address climate change: electrify everything. We need to start with households and the appliances in them, where we can solve for 42 percent of our energy-related emissions without moonshots or tradeoffs. Doing so will save the average household up to $2,500 a year on their electric bills (see our Household Savings Report) – and create 25 million jobs that cannot be automated or outsourced (see our Jobs Report).
Since nearly half of our carbon emissions come from our cars and appliances – space heaters, water heaters, stoves and clothes dryers – we must replace these with cleaner electric machines as soon as they are retired.
One of the questions we get is about the cost of electrification. There are two ways to think about costs: upfront and over time. On the upfront costs, we will need rebates and other incentives to spur this market and bring down the cost of these machines, just as we did with EVs and rooftop solar and as we do with many new industries. We’ll share more about our vision for what we need Washington to do on that in a subsequent newsletter.
Over time, there are over 49 million homes whose monthly energy bills would go down significantly if they went electric today. These households are located all across the country. They are very likely in your neighborhood. Your own home might be one of them.
49 Million Homes Would Save Significant Money Today With Electric Improvements
What kinds of homes are they? They are homes heated with expensive fuels like oil and propane. And they are homes that are already electric but have older and inefficient electric resistance heating. What is “resistance” heating? Think about the glowing red coils in your hairdryer or baseboard space heater. Or the coils you cannot see inside the old electric water heater. Making red hot heat from electricity this way is brute force – using that electricity to run a heat pump instead gives roughly three times more bang for your buck. There are a lot of homes that would save money if they just upgraded their current inefficient electric appliances to heat pumps.
Importantly, over 24 million low-to-moderate income households would save money by making the switch.
Half of Those Saving Money Would Be Low-to-Moderate Income Households
Another way to think about the opportunity is by looking at the relative costs for space heating:
This chart shows just how expensive the energy costs are in homes heated with propane and fuel oil, or equipped with electric resistance appliances (think about those baseboards again), on a per-unit basis. That means bigger bills to pay every month.
The chart also shows how much less expensive it is to heat your home with electric heat pump technology. (A heat pump uses the heat that is already in the ground and air, compresses it, and then heats or cool homes using a fraction of the energy that a regular electric heater or air conditioner would need. Heat pump technology can also be used to heat water.) Indeed, these appliances, because they are so efficient, are already competitive with natural gas-powered equipment. Indeed, in states like Arizona and Florida, the heat pump technologies are materially less expensive to operate than their fossil fuel equivalents today.
Electrifying the 49 million homes that would save significantly on their energy bills today will bring down the cost of electrification for all homes over time. It will create demand for these appliances, bringing down their front-end cost, and it will help spur the construction of new, clean energy power plants that will provide electricity at a cheaper rate than natural gas. We can further lower electricity bills for many households by including rooftop solar as part of the electrification approach. If you want to know the operating cost benefits of rooftop solar at the price they pay for it in France today, we have one last chart for you:
It is time to start electrifying the American household as a way to save families money today and to protect our planet for the future.
Meet our Advisors
We are assembling a stellar advisory board from all corners of the renewable energy universe – advocates, business leaders, environmental justice experts, policy wonks, and entrepreneurs. We’ll be introducing them to you over the course of the next few weeks.
We’re delighted to welcome Mike Fishman to our advisory board. He is the former Secretary-Treasurer of Service Employees International Union (SEIU). Before serving SEIU at the national level, Mike served four terms as President of SEIU Local 32BJ, the largest property service union in the country representing 140,000 doormen, cleaners, security officers, school, and public workers. Mike began his involvement in labor as a house builder and member of the carpenter’s union. As President of 32BJ, Mike started the Green Supers Program to help provide New York City metropolitan area with a professional building service workforce capable of reducing energy use, conserving water, saving money, and providing a cleaner and healthier building to live in. Mike continued his work to help build a green economy as a founding officer of Climate Jobs New York (CJNY). Mike now serves as President and Executive Director of Climate Jobs National Resource Center (CJNRC).