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New Research and Pilot Projects Demonstrate Economic Viability of Single-Home Electrification

[ARLINGTON, Virginia] New whole home weatherization and electrification demonstration projects, bolstered by groundbreaking economic research on water heater technologies, present a positive economic outlook for upgrading and electrifying single-family homes, according to the Beneficial Electrification League (BEL).

The research and home retrofit demonstrations are part of BEL's Weatherization/Electrification Together, an initiative tackling the challenge of deploying high-efficiency electric residential heating and cooling systems to benefit consumers, the environment, and the electric grid.

“The upfront costs of electrifying existing homes, especially for low- and moderate-income households using propane and fuel oil, has long been a barrier to upgrades that could reduce consumer energy costs over the long term,” says Keith Dennis, President of BEL. “Implementing whole home retrofits combining weatherization and high-efficiency appliances is challenging, but our research shows any related barriers can be overcome.”

In a whole home retrofit, deciding whether to keep the existing water heater or install a new system and if so, which type is key to unlocking benefits. Economic research from The Brattle Group and GDS Associates, Water Heating Economics in a Dynamic Energy Landscape, will help inform this decision.

Researchers analyzed the total societal cost of major water heating technologies across various housing types to determine cost-effective and applicable options.

Key findings:

  • Heat pump water heaters (HPWHs) are more economical for larger homes since their high upfront costs are offset by higher annual energy savings.
  • Grid interactivity enhances the value of non-heat-pump smart electric water heaters, but the benefits are market-specific.
  • Propane water heating consistently results in the highest total costs compared to conventional gas and electric water heaters.
  • Tankless water heaters could be attractive options in smaller dwellings with lower hot water needs and/or space limitations, though site-specific infrastructure needs are a factor that should be considered.
  • Incentive programs can make heat pump water heaters economically attractive for consumers.

These findings are consistent with the results of BEL's home energy retrofit demonstration projects.  In some instances, the house itself will be the most important factor in determining the optimal water heating technology. In all cases, weatherizing homes maximizes the benefits of new appliances.

Water heating accounts for approximately 19 percent of all residential energy consumption. Electrification of home energy systems has emerged as a key component in the effort to reduce building sector carbon emissions.

Combining Weatherization and Electrification for Whole Home Retrofits

The results of three deep home energy retrofits show that combining weatherization and electrification dramatically reduced energy consumption. One household cut its monthly energy bill in half.  The project demonstrates that homes could be upgraded with new electric products with little to no upfront costs by using rebates available under the Inflation Reduction Act to help pay for investments, resulting in more comfortable homes and lower bills. For more details on project results, see this representative analysis and overview.

The home retrofit projects proved that contractors and utility staff working together can complete weatherization/electrification retrofits quickly and efficiently. “The Weatherization/Electrification Together initiative is continuing to scale up nationally," says Keith Dennis. "Incentives expected to become available over the next year provide a big opportunity to improve consumers’ lives through weatherization and electrification of homes across the country.”

For more information, visit Weatherization/Electrification Together.

Home Electrification Economics PDF