How to decarbonize? Start with a rebate
June 3, 2021
As you know, decarbonization begins at home, where our fossil fuel-powered machines spew 42 percent of all our carbon emissions (see our Household Savings Report). But transitioning to all-electric machines and infrastructure is costly. That’s why we’ve partnered with the Center for American Progress to propose new consumer rebates for the purchase and installation of electrified household appliances and breaker boxes. The report, “To Decarbonize Households, America Needs Incentives for Electric Appliances”, provides a roadmap for legislative language for possible inclusion in the American Jobs Plan.
Four appliances are critical to decarbonizing our households: heat pump space heaters, heat pump water heaters, induction cooktops/ranges, and upgraded breaker boxes. Because these machines last 10 to 20 years or even longer, completing the transition by midcentury requires replacing these appliances as they fail across more than 50 million of America’s 121 million households over the next decade.
Together, the rebates we propose would deliver an average incentive of $4,200 to participating households and an average of $6,000 to participating low- and moderate-income (LMI) households. These rebates are calibrated to make sure the upgrade to electric appliances is no more expensive than a fossil fuel replacement, even before counting the energy bill savings a household will enjoy after switching to all-electric machines. According to data from the U.S. Census Bureau’s American Housing Survey, there are an estimated 65 million U.S. households that could together save more than $27 billion each year on their energy bills if they were using modern electric appliances today instead of space and water heaters powered by oil, propane, and electric resistance (such as inefficient baseboard heaters).
Senator Martin Heinrich (D-NM), the lead sponsor of the Electrifying America’s Future Resolution, which supports widespread electrification of American homes and businesses, said, “This type of rebate would decrease the barriers to home electrification for tens of millions, lower monthly bills, and create good-paying jobs and the market demand that will lower prices and expand accessibility for all. (Hear Senator Heinrich on the Politico Energy Podcast.)
To equalize upfront purchase and installation costs with fossil-fueled alternatives, the report recommends new point-of-sale rebates of $1,500 for heat pump space heaters, $750 for heat pump water heaters, $750 for induction ranges/cooktops, $1,000 for breaker box upgrades for all households, and $2,000 for breaker box upgrades for LMI households. On average, a fully electrified household could save between $1,500 - $2,500 a year on its energy bill, up to $750 of that from just electrifying space and water heating.
“Home electrification is the sweet spot in the infrastructure debate happening now in Washington,” said our CEO, Ari Matusiak, a co-author of the rebates report. “It’s construction jobs and modernizing our built environment – but it’s also a kitchen table strategy to engage Americans in climate solutions, directly addressing the imperative for economic justice with lower monthly bills and healthier air quality for families living in the oldest, most inefficient housing stock.”
Read about the rest of our federal policy framework here.
Better call Saul
Our founder Saul Griffith is becoming the media’s go-to guru on electrifying everything. The Washington Post ran a profile, “An Australian Inventor Wants to Stop Global Warming by Electrifying Everything”. He co-hosted the Energy Gang’s podcast, “A Wartime Plan for Electrifying America”. He was also a keynote speaker at the Verge Electrify conference. All of this is in advance of the publication of his new book, Electrify, which will be available from MIT Press in October. Plus: watch out for his Rewiring America coloring book!
Meet our Advisors
Professor of Practice
University of Michigan
ED & Co-Founder
Building Electrification Institute
Co-Founder & CEO
ED & Co-Founder
CEO & Co-Founder
NY's Public Service Commission
University of California- Santa Barbara