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How to Design Building Electrification Programs That Work

The grid is getting cleaner, but homeowners need help in replacing appliances that burn fuel

Helping American families upgrade to more energy efficient appliances is critical to reducing the use of fossil fuels. The question is how best to go about it. Photo courtesy EE Image Databank / CC BY-NC / Flickr.

As policymakers in several states realize the importance of efficient electrification of the country’s buildings to fight climate change, the next question that needs answering is how to help Americans upgrade to healthier, more efficient appliances that are powered with increasingly clean electricity.

A series of webinars recently hosted by the Natural Resources Defense Council showcased three programs that are already blazing the way forward on building electrification. Best practices from these early efforts should be incorporated into the many building electrification programs that are being designed and launched in the coming months.

America’s electric grid continues to get cleaner as more solar and wind power is added each year. Yet, the greenhouse gas (GHG) emissions from burning fossil fuels in our buildings—like when we use a gas furnace or water heater—will continue unabated until we replace fossil fuel equipment with efficient electric appliances that can use the increasing supply of renewable electricity.

Having recognized that any successful climate strategy will target emissions from fossil fuels in buildings, several cities and states are setting building electrification priorities and directing funding to help building owners replace their equipment with efficient, electric alternatives. In the last year, funding for building electrification programs has increased by 70 percent. But how can we assure that building electrification resources are invested effectively and equitably and that they deliver the emission reduction benefits we desperately need?

To help policy makers and advocates answer this question, NRDC hosted a series of webinars to examine already successful building electrification programs, learn what factors have been key to their early accomplishments, and discuss how those best practices should be applied to new efforts in other regions.

The webinars featured presentations about VEIC’s programs with equipment distributors in the Northeast, how the Association for Energy Affordability is electrifying affordable multifamily housing in California, and Efficiency Maine’s path to installing a heat pump in every home in their cold climate.

Three overarching themes emerge:

  • Building electrification programs must meet customers where they are and deliver excellent customer satisfaction.
  • Programs need to create a strong value proposition for the businesses that will deliver and install building electrification technologies.
  • Just like with all other energy efficiency programs, straightforward offerings and streamlined programs are easier for customers and businesses to navigate.

It also was abundantly clear throughout the webinar conversations that electrifying existing low-income housing will require tailored approaches and dedicated resources. Low-income families tend to live in older, less efficient buildings and are more likely to be renters—both of which have historically made it harder for low-income customers to access energy efficiency and other clean energy programs. Building electrification programs need to learn from past shortcomings and design solutions that specifically target these and other barriers to electrifying affordable housing.

Meeting customers where they are

Nick Dirr, director of programs at the Association for Energy Affordability, presents best practices for multifamily building electrification program design. For Dirr’s presentation, click here.

Meeting customers where they are can mean many things. For low-income customers and communities of color, many of whom live in older multifamily buildings and have historically been left out of clean energy programs, it means providing the necessary technical assistance to installers and operators to ensure the electrification process is smooth, effective, and delivers sustainable cost reductions.

There are many options for electrifying multifamily buildings, many of which are relatively new to the market; equipment installers and building managers are not prepared to review, select, and operate many of these new technologies. Ignoring this knowledge gap could lead to sub-optimal equipment purchases or installations that under-perform and would very likely lead to unnecessary costs to residents. In order to reach customers equitably, programs need to be aware of these needs and provide the technical assistance installers and operators need to successfully transition to clean, efficient electric equipment.

Of course, technical assistance alone will not be enough to successfully electrify the nation’s affordable housing stock. Programs will also need to provide significant incentives to ease the cost of new equipment purchases and related efficiency upgrades. Efficiency retrofits will help ensure that the residents of all-electric buildings do not face higher bills. If we do not include these necessary resources to help low-income customers transition off the gas system early, they will be left holding the bag on a system with decreasing customers and increasing costs.

For all customers, regardless of income, programs should also strive to deliver very high customer satisfaction throughout the electrification process. Building electrification programs are seeking to transform a market—to convince people to use a new and different technology instead of equipment that has served them for as long as they can remember. Any hitch along the way (such as a delay in installing a heat pump water heater after an old gas heater fails and a home is left without hot water) could have a significant ripple effect of discouraging others from adopting electrification technology.

Creating strong business value propositions

Howard Merson, business development and sales manager at VEIC, presents best practices for distributor and supplier engagement (midstream) building electrification programs. His presentation can be found here.

HVAC and water heating professionals will be crucial actors in the transition to cleaner, healthier electric buildings. Most Americans don’t spend much time thinking about the equipment that keeps their homes comfortable until that equipment needs to be repaired or replaced, at which point they turn to trusted experts for advice and recommendations. Often the experts that people turn to in these circumstances are the professionals who will sell and install the replacement equipment.

Those trusted messengers need to become more than capable distributors and installers of efficient, healthy electric equipment—they must be excited champions for the customer benefits of all-electric technology.

The webinar series highlighted several program design elements that will be key to transforming equipment distributors and installers:

  • Understanding the local market takes time and resources, but it must be done because programs can only transform what they understand. Program implementers need to engage with equipment manufacturers and distribution channels to fully understand business and operational needs, key pain points, and the competitive landscape. Findings from that engagement should inform incentive levels and delivery mechanisms. Developing a thorough understanding of the local customer base—including how the rental and multifamily building stock is managed—will also help tailor program designs to better address barriers faced by low income customers, such as split incentives between tenants and landlords and the risk of building upgrades driving rents up.
  • Programs should include strong training components to ensure equipment is installed properly and customers are well-informed about how to operate it. In order to be successful evangelists for healthy electric technology, HVAC and water heating professionals must become experts in how to install and operate the equipment so that it delivers optimal emission and bill reduction benefits. Only then will they be comfortable recommending the new technology to their valued customers.
  • Program implementers should leverage their marketing and customer outreach resources to support new customer acquisition. This includes hosting sales and marketing trainings, creating flyers and other sales support materials for businesses to use when talking with prospective customers, and managing verified expert websites that can help customers find qualified installers. Longstanding programs in the Northeast have found that these verified expert portals have been key to creating a positive customer experience.

Delivering streamlined offerings

Michael Stoddard, executive director of Efficiency Maine, presents best practices for cold climate heat pump program design. His presentation can be found here.

Finally, as has been recommended many times before, simplicity and ease of use should guide program design. This applies to customer-facing programs elements as well as to requirements for trade ally and other business participants. The most successful programs use instant rebates—rather than requiring customers to mail in proof of purchase—so that the customer sees a post-rebate price as they are comparing all-electric and fossil fuel appliances. This reduces the number of obstacles the customer associates with adopting the new technology.

For the business-facing side of programs, it is important to optimize data collection requirements so that the most valuable information is collected without imposing undue burdens on equipment installers. Reducing these administrative requirements makes it easier for smaller business with less access to capital to participate in programs.

Streamlined program designs will also make it easier to respond to changing market conditions and technology offers. Flexibility is crucial in a market that is evolving so rapidly. Programs need the flexibility to incorporate new technical solutions as they become available and adjust their offerings in response to changing customer needs. Program requirements that are written too narrowly reduce this much needed flexibility.

Supportive policy is needed

Programs will only be able to adopt these best practices to the extent that policies are put in place to support nimble, market-responsive, customer-focused program designs. For example, the sustained funding and long-term outlook in some Northeast states that have allowed programs to truly engage with and transform the local heat pump distribution market.

Supportive public policy will be particularly important for electrifying buildings in black and brown economically depressed communities that have been marginalized for far too long and truly can not afford to be left behind on a declining fossil system. Low-income Americans face higher than average energy burdens and are particularly sensitive to any increases in energy costs. The electrification of affordable homes, both deed-restricted and naturally occurring, must be prioritized to avoid leaving low income families exposed to the higher costs of maintaining a shrinking gas system, and it must be done with special care to ensure a smooth transition for all.

Leaders across the country are already taking important first steps towards addressing GHG emissions from buildings—demonstrating commitment by setting ambitious goals and dedicating resources to begin the work. Now is the time to get the details right, to set program rules that support an equitable transition away from fossil fuels for every person involved.


-Alejandra Mejia is building decarbonization advocate in the Climate & Clean Energy Program of the Natural Resources Defense Council. This post originally appeared at the NRDC Expert Blog and is reprinted here with permission.

19 Comments

  1. Norman Farwell | | #1

    I've worked as an installer in various clean/efficient technologies and with various incentive programs (solar thermal, biomass, ashp, home performance) over the years here in New York state. Ten years ago I supported them. Now not so much.

    In my experience it's rare for incentive programs to work well for everyone. Most incentives unfortunately tend to go to the people who need help least. And usually it's the contractor who comes up short because the cost of complying with requirements is greater than the value of the contractor's share of the incentive. And early adopter risks for new technology are frequently hard on installers as well.

    The professional class tends to leverage these incentives very effectively. I've done a lot of projects for doctors and lawyers and stockbrokers and bankers who know to take out unsecured loans for projects that cost $20-$40k and that are designed to be cash flow positive in that the energy savings are greater than the cost of the loan. So there's little or no out if pocket for them. They get paid to have home improvements. Or they get a very expensive subsidized "green" hvac system that lowers their bills.

    I would be fine with that if the guys I work with were also able to do that too. Unfortunately the working class tends to live in houses that are less efficient, tend not to qualify for whatever reason, are suspicious of loans and government, or can't navigate the crazy paperwork. From the inside incentives look like a good use of public money.
    From the outside they look like elites helping elites for their own benefit.

    I'd agree that simplicity is paramount.

    I'd add that in the big picture a fee and dividend carbon tax maximizes effeciency, simplicity, and fairness. It would eliminate all sorts of bureaucratic nonsense by aligning markets and morality without the need for complicated and politically fraught state-level experiments in economic engineering.

    Also a post script: allowing utilities to administer these types of programs is, as one would expect, a good way to guarantee failure. Hope NYSERDA rethinks that.

  2. User avater
    Thomas Hutegger | | #2

    I don’t think replacing gas Appliances with electrical ones is good idea in the US. None of the developed countries is still building nuclear power plants - we are! As long as there’s any need for us to have nuclear power plants any co2 emmission is less of a problem. Co2 neutralizes within a few decades, once we stop. Nuclear power plants remain radiating ruins for 100s of 1000s of years. And while they are active, they’re extremely dangerous when something goes wrong. See 3-mile island, fukojima, tchernobil, and many more around the globe!
    I’m all for more energy efficiency and less greenhouse gas emissions. Let’s start with turning of the car engines as soon as we stop to park or wait and not turning them back on until we are really ready to move! Let’s continue with turning the temperatures in the summer to 80 and in the winter to 64, instead the other way around as it is today the case!
    Going by where we are, worrying about electrifying appliances is about 100 years ahead of its time!

    1. User avater Expert Member
      Dana Dorsett | | #3

      >"I don’t think replacing gas Appliances with electrical ones is good idea in the US. None of the developed countries is still building nuclear power plants - we are! As long as there’s any need for us to have nuclear power plants any co2 emmission is less of a problem. "

      "We" are not building nuclear powerplants to cover the energy needs of electrical appliances. In the only active instance (Vogtle, in GA) where a commercial nukes are being built it's more about shareholder value for Southern Company, the owner of the state wide electricity monopoly in that state, and the guaranteed ROI delivered to them on a platter by Georgia regulators.

      Increased electrical demand for electrification of appliances (including heating appliances) is more likely to be met by a combination of MUCH cheaper PV (small and large, on both sides of the meter), cheap wind (increasingly offshore wind) and transmission lines to balance grids over wider geographical areas, along with some amount (surprisingly little, really) storage. The levelized lifecycle costs of nukes are already a multiple of wind & solar renewables, according to Lazard's more recent cost analysis (these are investment advisors, not engineers, and their financial analysis is sound):

      https://www.lazard.com/media/451419/lazards-levelized-cost-of-energy-version-140.pdf

      Even without subsidy wind and solar at the utility scale has been cheaper than "conventional" fossil & nukes for several years now. The best thing for the RATEPAYERS in Georgia is to simply stop the Vogtle expansion project right now, even as they are close to completion. By never loading the fuel rods they would save the substantial decommissioning costs that will be necessary after the very first operational cycle of the new powerplant. Given cost trends for wind, solar AND storage the Vogtle plants are pretty much guaranteed to become stranded assets well before their design lifecycle is up.

      Regarding the falling cost of electricity storage, Lazard tracks that too:

      https://www.lazard.com/media/451418/lazards-levelized-cost-of-storage-version-60.pdf

      >"Nuclear power plants remain radiating ruins for 100s of 1000s of years."

      Not really.

      The spent FUEL rods have lifetimes that long, but even they become reasonably manageable in a few decades time frame, though the systems for safe long term storage are not yet in place in the US. The power plants themselves can be decommissioned and made safe within a few decades after the last fuels cycle and the fuel rods are removed. There are no "...radiating ruins for 100s of 1000s of years...".

      (Full disclosure: In recent years I personally worked in an engineering program to address some aspects of spent fuel rod storage monitoring & safety, though not since early 2019.)

      >"I’m all for more energy efficiency and less greenhouse gas emissions. Let’s start with turning of the car engines as soon as we stop to park or wait and not turning them back on until we are really ready to move!"

      Let's start by using less concrete (don't build any more big nukes), and electrifying the automotive fleet. The emissions savings from stop/start technology in internal combustion cars barely scratches the surface. The emissions savings from electric cars is quite large, even at the existing grid mix in the US, and the existence of a large fleet of batteries enables the use of smart car-charging to balance the output of a larger renewables fleet of generators by putting the excess on windier &/or sunnier days into batteries rather than curtailing output.

      >"Let’s continue with turning the temperatures in the summer to 80 and in the winter to 64, instead the other way around as it is today the case!"

      That's an unbelievably difficult solution to sell, but it might be do-able if retail utility rate structures were to include the real time LMP (localized marginal price) of electricity. That too would be an unbelievably difficult solution to sell to the average utility customer, but with only modest amounts of smarts on the appliances the brutal peak costs would be easily avoided by most.

      1. User avater
        Thomas Hutegger | | #4

        I wasn’t talking about start/stop technology, but about people‘s habit of Leaving engine running while parking. Walk into stores, have lunch, work on the utility project all day, play on their phones, and so on…
        20 years ago the US was the only place where i noticed this behavior. Today, unfortunately, people in many other countries have picked up that habit, too, like so many other dumb things born in the USA! 🥵
        There are many good ideas born here, too - albeit getting fewer and fewer in the last years. It’s frustrating and disheartening to observe these ideas to be not picked up so readily by others, and often abandoned in the US as well…
        All that has nothing to do with building. It’s about personal habits and priorities. However, they do influence what is being built and how. Yes, less concrete. Yes, smaller homes. Yes, less office space, more working from home...

        There are some (quite a few) people who care. Among them those who read and contribute to this site. (That’s why i subscribe to it). So there is hope…

        Replacing appliances with electrical ones, too me, is just another one of the many hypocritical actions we are so famous for, that do nothing about the situation but look on first look like something is being done!

        1. User avater
          Jon R | | #7

          I don't understand. How could replacing a gas furnace with a heat pump "do nothing" in say Washington? The fact is that the latter is cleaner.

      2. Matthew Salkeld | | #11

        What powers the grid on a windless night for ten hours? Batteries? The amount of overbuild of solar and wind must have to be gargantuan to supply everything. What is base load, 50 percent of peak? And you will also be charging every vehicle in the country at night....

  3. Matthew Salkeld | | #5

    Does the embodied carbon emissions of PV and wind get considered? Which grids are already lower emitting than PV over it’s life cycle?

    Up in Canada 85 percent of our electricity is close to zero emission mainly legacy hydro and some nuclear.

    Research showed that the life cycle emissions of PV today is as much as 50 times greater than many grid power is. Why would we install solar energy and increase ghgs?

    1. User avater
      Jon R | | #6

      On the other hand, Canada's grid is about 7% coal - this needs to be replaced with something cleaner.

      1. jkonst | | #8

        Yeah, I think if you're looking at replacing nuclear/hydro with solar that would be a different story, but most US grids aren't running primarily on renewables today. There are also pretty major local environmental impacts to using hydroelectric power, so there are cases where decommissioning those dams in favor of solar would likely be a net environmental positive.

        One census study on LCAs is below - doesn't include natural gas in the comparison, though it seems the methane released from the extraction of natural gas negates just about any benefit it has over coal.

        https://www.nrel.gov/docs/fy13osti/56487.pdf

        1. Matthew Salkeld | | #9

          The organic matter that could rot under water rotted many decades ago. What else is it that release ghgs from a reservoir? This sounds fishy.

          1. jkonst | | #12

            It's less about greenhouse gases, more about fish populations, land that has been flooded by dams that can be restored, etc. It's a challenge to balance because now you're talking GHGs vs. ecosystems, but there's a reason the movement to remove dams is building steam.

            https://www.americanrivers.org/conservation-resources/rrformer/removing-dams-faqs/

        2. Granular | | #14

          "though it seems the methane released from the extraction of natural gas negates just about any benefit it has over coal."

          Completely ridiculous claim. Nobody ever includes the vast amount of methane released when mining coal when measuring coal's emissions.

          Until natgas prices collapsed (thanks to huge advances in fracking efficiency), it was economical in some areas to produce 'coal bed methane' because of the huge amounts of methane locked in coal seams. That methane is why underground coal mines are dangerous and require ample fresh air to dilute to safe levels. Open pit mining simply allows the methane to vent directly. Comparing the tiny fraction of leaking methane from wells/pipelines while ignoring the massive amounts of methane vented when mining coal, and then fatuously claiming natgas is hardly cleaner than coal is a Big Green Lie (as was the nearly-forgotten hysteria about fracking)

          1. Bryan Coplin | | #15

            I agree that nat gas is preferable to coal. However, It's intellectually dishonest to imply that low leakage rates mean low emissions.

            https://pubs.acs.org/doi/10.1021/acs.est.0c00437

            *Edited to reply to jkonst below.

            I'm not aware of anything comparing nat gas infrastructure leakage to mines, but I haven't spent a lot of time looking. There's a lot of literature on methane emissions from coal mining (including methane emissions after the mine has been abandoned), if you're interested in reading up on it. Your local library may have a LexisNexis subscription you can use; Google Scholar is also a good resource for finding trustworthy, peer-reviewed research.

          2. jkonst | | #16

            I understand that methane release is an issue with coal as well. Do you have any studies that show methane is a bigger issue in coal extraction than it is with natural gas? Related reading below that references the differences in methane from coal vs. shale natural gas extraction.

            https://www.nationalgeographic.com/environment/2019/08/fracking-boom-tied-to-methane-spike-in-earths-atmosphere/
            https://www.nationalgeographic.com/science/2020/02/super-potent-methane-in-atmosphere-oil-gas-drilling-ice-cores/

    2. User avater Expert Member
      Michael Maines | | #10

      "the life cycle emissions of PV today is as much as 50 times greater than many grid power is"

      Do you have evidence for that claim? Here are a couple that disagree with you:
      https://www.carbonbrief.org/solar-wind-nuclear-amazingly-low-carbon-footprints
      https://www.nrel.gov/docs/fy13osti/56487.pdf

    3. Bryan Coplin | | #13

      I'd be curious to see that research. The commonly cited figure that I've heard is that each PV module pays off its carbon debt in 2-4 years, depending on grid intensity.

      There's a good discussion of the energy & GHG of the solar industry below; the bottom line is the environmental impact of solar is low and falls as installed capacity grows. https://www.nature.com/articles/ncomms13728

  4. Matthew Salkeld | | #17

    https://www.nrel.gov/docs/fy13osti/56487.pdf

    Legacy hydro powered grid is around 1 to 3 eCO2/kWh so up to 40 times lower than PV. Also at our higher latitudes PV generates less than what a study For the US would report and panels are sometimes covered in a snow.

    Decommissioning legacy hydro would make us burn lots more natural gas.

    The great news is our grid power in Canada is mainly already so low emissions, that electrifying heating, and EVs are solutions. Plus there seems to be a surplus of electricity available.

    1. Erik_Brewster | | #19

      Have you seen any mention of hydro actually being replaced by solar? I did a quick search and only found many sites regurgitating the same one line summary from a study (https://tinyurl.com/hydrotosolar) -- (paraphrasing) "if we drained all the dams, it would only take 13% of the equivalent area to replace the power generation with solar." It seems like quite a stretch that any utility or govt would do this as a real project. If a govt wanted to drain a dam because they aren't great ecologically and then used solar to replace the dam power generation, I think it's important to note that the solar wasn't the reason to tear down the dam.

      Furthermore, I would characterize the Nature paper as bordering on the crackpot / navel gazing variety. Some samples from their own discussion section:
      "Although clearly a theoretical and not a realistic calculation, PVs placed on retired hydro-dam reservoirs could replace hydro-dam electricity generation using a small percentage of US land..."
      "Although we have framed our analysis with a direct contrast between the amount of land submerged under hydro-reservoirs and the amount of land needed for replacement of hydroelectricity generation by PV generation, in many instances replacement onsite would not be possible. In these cases, energy replacement would best be accomplished offsite, "
      "However, industrial-scale PV generation is not free from environmental issues, such as siting that fragments the landscape and reduces biodiversity..."
      "strong advantage of hydropower to the energy system is its flexibility in electrical output given its ability to store water behind dams and then make it immediately available to generate power and provide other capacity and ancillary services when needed"
      You can find several other clear problems that they spell out in their discussion section. At least they are honest about it. The news sites that repeat it without context, less honest.

      If you can find an example of tearing down a dam just to install solar, then that's different, but I'm not seeing that example.

  5. Matthew Salkeld | | #18

    The study on the GHG importance of methane gas escaping in the natural gas industry.

    https://onlinelibrary.wiley.com/doi/full/10.1002/ese3.35

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