Building Electrification

Description

According to the U.S. Green Building Council, “Building electrification describes the shift to using electricity rather than burning fossil fuels like natural gas… for heating and cooking. The goal is all-electric buildings powered by solar, wind and other sources of zero-carbon electricity.”¹

In order to meet our climate goals, including the Paris Agreement goal to limit global warming to 1.5°C, the United States will need to eliminate building emissions by 2050. However, more than half of American homes rely of fossil fuels, primarily natural gas, as their main energy source for heating or cooking, which generates 600 million tons of CO2 each year.²

All-electric buildings have the potential to delivery climate, economic, and health benefits to Americans and are an integral part of the country’s decarbonization strategy. In addition to reducing greenhouse gas emissions by not burning fossil fuels, electric buildings can provide significant energy cost savings over gas appliances and can create jobs attributed to the green economy.³

Key Technologies

Electric space and water heating can directly substitute for natural gas appliances in most applications. For instance, one common way to reduce building emissions is to install electric heat pump technology, which has become cost-competitive in most markets. According to a McKinsey study, “today’s models are 2.2 to 4.5 times more efficient than gas furnaces.”⁴ Beyond switching to all electric solutions, building electrification, as part of a net zero building, can be coupled with other solutions including on-site PV solar, energy efficient appliances, and battery storage.

Primary Technologies

Heat pump water heaters
Induction cooktops
Air source heat pumps

Secondary Technologies

Smart energy efficient appliances
On-site solar PV
Ground source heat pumps
EV charging and battery storage
Automated energy management systems

Potential Market Size & Timing

Guidehouse Insights (formerly Navigant Research) expects global revenue for all-electric home technologies to surge fivefold to $12.9 billion by 2029, even as consumer awareness lags.^{5, 6}
California’s Air Resources Board has adopted a goal of stopping the sale of all new natural gas-fired space heaters and water-heating appliances by 2030. CARB is now developing a plan to phase out gas appliances which will be voted on in 2025.⁷ Washington⁸ and other states are moving forward with mandates for all electric buildings for new construction.
19 Major global cities, including Los Angeles, New York, San Jose, Santa Monica, San Francisco, and Washington DC in the U.S., have pledged to ensure that new buildings operate at net zero carbon by 2030.⁹
In 2021, cities across the U.S. took comprehensive steps towards building electrification.¹⁰
- In Denver, CO, an ordinance was passed that requires new buildings larger than 25,000 square feet to achieve 30% energy savings by 2030, which is expected to reduce building emissions by about 80% by 2040.^{11, 12}
- The City of Ithaca, NY, has entered into an agreement to electrify and decarbonize 1600 buildings, with the goal of reaching 6000 buildings by 2030, when the city hopes to be carbon neutral.¹³
- Eugene, OR, moved forward a resolution that would mandate electrification in all new buildings and prohibit all natural gas hookups. If passed, Eugene would be the first city in the state to adopt such a policy.^{14, 15}

Barriers

Outdated utility regulations such as gas line extension allowances, as well as outdated codes and equipment standards, undermine moving to all electric appliances and buildings.
Given the long operating lifetimes for traditional equipment, such as boilers, furnaces, hot water heaters, and stoves, even a ban on new gas equipment will take many years to impact the current population of systems.
Higher upfront cost for zero emission equipment.
Low public awareness for clean alternatives or the GHG benefits of going all electric.
Continued support by State Public Utility Commissions and other state agencies for ongoing use of natural gas in homes and offices.

Accelerators

Full and fast implementation of the Inflation Reduction Act which includes a tax credit program for homeowners that install heat pump space heater or water heater, electric stove or oven, and electric heat pump clothes dryer. Low- and moderate-income households may qualify for rebates if they purchase low emission appliances.¹⁶
Global pledges towards electrification including net zero building pledges of major US cities need to be adopted by more states and cities; as installations of new all electricity components grow; costs will come down.
Updating building codes and modifying utility regulations that directly promote gas appliances or inadvertently hinder building electrification.
Additional, consistent federal/state and utility incentives that encourage the equitable adoption of electrified building equipment, including programs that allow tenants to access low GHG appliances and systems for their homes, apartments, and offices.
Funding for consumer education allows for greater awareness of the benefits, and possible incentives, for building electrification.

Relevant NEMA Products

Wires, connectors, and other electrical system components
Connected, “smart” appliance and building control systems
Energy storage systems
Electric vehicle charging components