Building Electrification: The Devil’s in the Details
Browsing Rewiring America’s website, it’s easy to get excited about the potential benefits of home electrification. Heat pumps, induction stoves, ventless heat pump clothes dryers, breaker boxes, rooftop solar, EVs, etc. All relatively straightforward, and most–with Inflation Reduction Act incentives–cheap and easy.
Right? In reality, not so fast.
I was recently contacted by a Decorah couple to provide some recommendations for home electrification. The couple had the money and were committed to doing something, but just needed a bit of guidance of where they should start. After a dizzying 1 ½ hour discussion batting around project ideas, we finished the meeting not much farther along than where we started. Houses are incredibly complicated systems, and developing an electrification plan is really challenging, especially when mechanical and building systems are of varying ages.
To set the stage, here’s a bit of background:
The objectives: The couple’s primary motivation is reducing their environmental impacts. The idea of adding solar and transitioning space heating, water heating and cooking away from gas and to electric seem enticing. Given the seemingly endless number of possibilities, they settled on the idea of undertaking two projects now, and leaving the rest for the future.
Key building information:
- Two story, 2,400 square foot house, circa 1910
- The lot is partially shaded and the house has a 15 year old asphalt roof
- Older 100 amp breaker box with no available breakers
- A 17-year-old 95 AFUE natural gas furnace with mediocre ductwork (existing ductwork is insufficient at cooling the second story)
- A 26-year-old central air conditioner and an 8-10 year old natural gas water heater.
As you’ll see below, committing to one project locks in subsequent actions, whether intended or not, good or bad. Whole-home electrification, especially for those of us living in existing housing stock, requires tremendous amounts of forethought, planning, and perhaps most importantly, cash.
Potential projects in order of priority:
Solar: We all felt solar to be a logical place to start. Given past electricity usage, the couple could net meter (receive monetary credit for electricity exported onto the grid to be compensated for electricity used at a later time) up to 5.8kW of solar. The home’s rooflines face east and west, but unfortunately not south, the optimal orientation for solar. In addition, tall spruce trees southwest of the house result in significant afternoon shading on the western-facing rooflines. Any panels would have to be placed on the east-facing rooflines, resulting in production losses of about 20% versus south. Instead of an optimal seven year return on investment (in our electricity and solar market, and accounting for the value of the federal tax credit), this solar project would pay for itself after about ten years.
Given space limitations of the east-facing rooflines and that it’s easier to install solar in one shot as opposed to staged over time, I suggested installing as much solar on the east-facing roof as possible, meaning the array might be larger than the utility-approved 5.8kW maximum.
Any future electrification project will increase usage, potentially justifying solar sized above and beyond the utility-approved 5.8kW cap. In this scenario, any production above the cap is sold back to the utility at a much-reduced wholesale rate. Each year a customer can petition the utility to raise the net metering cap, but any potential upward adjustments are based on demonstrated usage over the previous 12 months, meaning any excess solar installed now holds little value until a year after subsequent electrification projects are completed. The return on investment of solar stretches even further.
And bundle all this with the reality of the roof being 15 years old. Does it make sense to replace the roof now (at a cost of about $25,000) to proactively ensure the panels don’t have to come down half-way through the life of the solar array, or is it better to wait and pay several thousand when the roof inevitably has to be replaced ten years from now?
Electrical Panel: The next most obvious electrification to-do is the main electrical panel. To accomplish any meaningful electrification upgrades down the line–whether that be an electric clothes dryer, an EV, a hybrid heat pump water heater, a new heat pump, or an induction stove–the electrical panel has to be dealt with. Replacing a main panel is a $3,000-$5,000 proposition, and given the new federal tax credit for panel replacement is worth only up to $600, spending on something that’s out of sight, out of mind, seems like a dispiriting (and costly) way to begin.
Water Heater: Given the fact that natural gas is so cheap on a per-BTU basis relative to electricity, the operational savings of switching from gas to an electric heat pump water heater is relatively small. (By comparison, swapping an electric resistance water heater for a heat pump version is a no-brainer, as the heat pump version uses about ¼ the electricity).
In our neck of the woods, a water heater might last 10-14 years. Given the existing unit is 8-10 years old and the savings of going electric is small, replacing it prematurely probably doesn’t make sense. And by the time you account for the cost of the new unit, and the added expense of bringing a new 30 amp-240 volt circuit to the new water heater, the finances become even more unclear.
Furnace and Central AC: Here’s where things get really complicated. We often tell customers dual-fuel systems represent the sweet spot of space heating electrification. Retain the existing gas furnace and couple it with a heat pump instead of a standard central air conditioner. Dual fuel systems utilize the heat pump during warmer weather (as the efficiency and output of an air source heat pump is proportionally related to outdoor temperature) and the gas furnace during periods of extreme cold. (For reference, depending on fluctuations in fuel prices and market conditions, the switchover point at which a heat pump becomes cheaper to operate versus natural gas is about 20°F to 35°F.)
The challenge with dual fuel setups is that they’re best accomplished when both the furnace and central air conditioner are replaced at the same time. After all, a central system, whether it be a heat pump or air conditioner, relies on the furnace blower motor to move air through the ductwork. And all parts have to communicate with each other. The clearest cost-saving scenario is achieved by mating a new heat pump with a new furnace, but less so when pairing a new heat pump to an old furnace with an inefficient blower motor.
Given these realities, and the fact that not all of these electrification activities will be accomplished this year, several HVAC-related questions arise, such as:
- What happens when the central AC eventually fails, and what if that happens well short of the end of the life of the furnace, for example, this summer? Does the furnace get replaced then, essentially doubling (or more) the cost of the project?
- Is it best to stick with a cheaper central air conditioner and not a heat pump version? Let’s say the couple opted for the heat pump but retained the existing furnace, would any potential cost and/or carbon savings be wiped out by continued use of the existing furnace?
- And given the ductwork is already inadequate and doesn’t do a good job of cooling the second floor anyway, does ducted cooling, whether it be with a central air conditioner or a ducted heat pump, make sense anyway?
- Is it better to transition cooling toward a ductless system? And if so, should that ductless equipment be cold-climate capable so it has the ability to provide meaningful heating? And since heating requires more BTUs than cooling, is it best to oversize equipment meant for cooling so that it can then provide meaningful heating? What does oversizing do to costs? And if ductless heating is being considered at all, does a whole-home phaseout of the ducted gas furnace make the most sense?
In the end, we decided solar and the electrical panel upgrade were the places to start. The return on investment of solar, coupled with the idea of having something tangible on the roof were enticing to the homeowners. The electrical panel, much less so, but any subsequent electrification activities require it.
The HVAC and water heating decisions were left to another day, but we felt it important to forge ahead on a replacement plan for each. Almost always, appliances are replaced at the time of failure, whether that be on a 100° August afternoon or a -20° January night. Given that reality, having a plan in place for what to do when things go bad, or even replacing end of life equipment preemptively, is essential. Electrification of old houses requires lots of forethought, planning and long-term strategizing.