How to avoid panel upgrades so we can electrify more homes

Upsizing the electrical panel can be costly and unnecessary. A new report offers guidance on how to forgo upgrades so more funding can go to electrification.
By Alison F. Takemura

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Homeowners across the country increasingly have access to a powerful carbon-cutting tool: electrification programs, which can make it cheaper for residents to ditch gas and fuel-oil appliances for super-efficient electric equipment. California in particular provides a lot of support, with funding offered by the state itself, utilities, community choice aggregators, cities, and regional energy entities.

But where these efforts could stumble is over the humble electrical panel, according to Sam Fishman, sustainability and resilience policy manager at the San Francisco Bay Area Planning and Urban Research Association (SPUR).

Also called circuit breaker boxes, panels are the electrical heart of any home. They route power to safely keep devices charged, beer cold, and the internet on. As homeowners look to switch over to electric appliances and vehicles, many find that their existing electrical panel setup won’t cut it. An electrician may say they need to upsize their panel to deliver more electrical current, which could also trigger a need to pull more current from the grid — i.e., run a larger wire that can provide more power to the home. This latter update, known as an electrical service upgrade, can be both pricey and slow, costing $2,500 to a whopping $40,000 and taking months to years to complete.

A growing body of research indicates that many households with at least 100 amps can skip these expensive service upgrades, especially if they use proactive approaches that limit a home’s power needs. But these solutions aren’t widely known. Without guidance on how to avoid full electrical panel overhauls, electrification programs risk spending their limited funding on unnecessary upgrades instead of using those dollars for equipment that directly cuts carbon emissions, like heat pumps, Fishman said. 

A new policy brief from SPUR details a plethora of strategies to avoid nonessential electrical panel upgrades, from incentivizing power-efficient equipment to leveraging the National Electrical Code more strategically. The report focuses on California, but many recommendations are relevant nationally, said Fishman, who co-authored the brief.

We don’t have very much public money going to electrification programs” relative to the scale of the state’s and country’s climate goals, Fishman said. And budgets can shrink; California Governor Gavin Newsom (D) has proposed slashing funding for the precedent-setting $922 million Equitable Building Decarbonization Program, an initiative to electrify the homes of lower-income families, by more than a third. We need to make what we have go a lot further,” he said.

To that end, Fishman highlighted for Canary Media a few of the policy brief’s top recommendations. 

First, he and his co-authors recommend that program administrators incentivize power-efficient devices. Options include low-power Level 2 electric-vehicle chargers that run on 20 amps instead of 50 amps, heat-pump water heaters that use a 120-volt outlet instead of a 240-volt one, and heat pumps without power-hogging electric-resistance heating strips. Going further, programs can advise people undertaking whole-home electrification on how to stick to a budget for the amount of power their electric equipment uses — also called a Watt Diet.” In this way, homeowners can optimize their electrification plan to avoid triggering an electrical service upgrade. 

Second, the report encourages programs to subsidize technology that can dynamically manage power flows. Devices called circuit pausers” will automatically switch connected appliances off if the power demand for the entire home is getting too high. Circuit splitters” or sharers can enable two appliances to be hooked up to a plug powering just one appliance at a time, like an EV charger and a heat-pump clothes dryer. According to the report, circuit splitters cost roughly $200 to $400, while circuit pausers can run about $750 to $1,750. Another option is a smart panel, which prioritizes electrical loads to make sure in aggregate they never exceed a home’s limit. Smart panels cost $500 to $3,000 more than a standard panel, the report notes.

Still, all of these options might be relatively inexpensive compared to the costs of a service upgrade, Fishman said.

A third strategy he underscored is that programs forgo incentivizing panel or service upgrades for middle- and upper-income homes that already have 200 amps of service. A 2021 study by research nonprofit Pecan Street estimated that even without power-efficient devices, 200 amps is more than sufficient to fully electrify a 2,000-square-foot single-family home with a Level 2 EV charger. We really shouldn’t be subsidizing … upgrading 200-amp panels,” Fishman said.

Fourth, the report authors advocate that regulators update or issue clarifying guidance on the California Electrical Code and the National Electrical Code it’s based on. 

Contractors rely on these codes to calculate a home’s peak power draw or load so they can safely size electrical service, but the codes tend to overestimate peak load, the authors note, which can trigger a recommendation for a service upgrade. 

Some of the suggested clarifications and updates include accounting for the fact that two loads won’t be on at the same time if a circuit splitter is used, expanding what utility data can be harnessed for the calculations, and reducing estimates of the amount of power that appliances will simultaneously draw, which better reflects data from field studies.

The National Electrical Code is especially conservative,” Fishman said. With changes … we can avoid forcing folks to upgrade their panels.”

The 2022 Inflation Reduction Act is unleashing $8.8 billion for state home energy rebate programs to help households transition to climate-friendly, efficient, electric appliances. These programs will augment existing electrification efforts already underway across the country. SPUR is arguing that its recommendations, if implemented, will help these initiatives more effectively decarbonize the nation’s housing stock, allowing programs to focus funding on new electric appliances that actually reduce carbon — and spend as little as necessary on panel upgrades. 

Alison F. Takemura is staff writer at Canary Media. She reports on home electrification, building decarbonization strategies and the clean energy workforce.