What are the hurdles to electrifying a home? Contractors and experts weigh in

Installing heat pumps and induction stoves can be costly and complex, but they boost homeowners’ health and comfort — and benefit the climate too.

Installers set up a 7-kilowatt heat pump. (Andrew Aitchison/In Pictures via Getty Images)
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What will it take to switch every home in America from fossil-fueled heating and cooking to electric heating and cooking? 

Think tanks and government agencies tend to consider market incentives and efficiency mandates when trying to answer this question. Startups such as Sealed and BlocPower are raising millions of dollars of venture capital to support new electrification business models and financing structures. 

But the local contractors and customers on the front lines of electrifying homes have more practical concerns and questions. Can they get the latest models of heat pumps and induction stovetops from their distributors? Can the long-term health, comfort and cost benefits of these systems outweigh the higher upfront cost and complexity of installing them? And can their home’s electrical panels and breaker boxes handle the extra power loads without deal-breaking upgrade costs and complications? 

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These are the kinds of questions facing Craig Aaker, operations manager at GreenSavers, one of a handful of U.S. home-performance contractors that are taking the plunge into all-electric retrofits. 

After a summer of record-shattering heat waves in GreenSavers’ Pacific Northwest service territory, it’s becoming easier to pitch his customers on heat pumps, which despite their name can work as both air conditioners and heaters, he said. We tell people it’s the simplest and most effective way to be comfortable in every room in your house,” he said. 

They also cost a lot less to operate over the long run than gas-powered furnaces, with any increases in electric bills well outweighed by reduced natural-gas bills, Aaker said. Nobody’s ever complained that I did this and my bill went up.’” 

That’s not to say that going all-electric is easy, though. 

The potential for electrical panel problems

One potential complicating issue when installing heat pumps or other electrical equipment is a home’s electrical panel. This is the central conduit for power flowing from a utility grid to individual household circuits. The panels tend to come in 60-amp, 100-amp and 200-amp configurations for most homes, with newer and larger homes generally having the higher-amperage, more state-of-the-art panels. 

Certain appliances — like heat pumps or clothes dryers with electrical resistance coils to boost heat output, or higher-voltage electric vehicle chargers — can add loads that exceed the limits of smaller panels, forcing homeowners to take on an expensive and time-consuming upgrade. 

Most of GreenSavers’ customers don’t need to upgrade their electrical panels to handle the heat pumps that fit their needs, Aaker said. I would say we’re able to successfully add [a heat pump] to a house more than 75 percent of the time without needing any modification.” 

But that will likely change going forward. As we move into this world where we have one or two car chargers and solar on the roof and…a heat pump, that house is going to need a panel upgrade almost every time,” he said. 

Even when electrical panels don’t need to be replaced, GreenSavers and similar services that are focused on home electrification are offering a more complicated and costly service than companies that will simply switch out older gas-fired furnaces or water heaters with similar updated models. 

We’re trying to do this home-performance model in a world where we compete against single-purpose contractors,” Aaker said. To replace a gas-fired furnace with an electrical heat pump, I have to stub out [cap] a gas line; I have to deal with an exhaust line I don’t need anymore; I need to figure out how to run all these refrigerant lines,” he said. It’s a challenging business to be in, according to Aaker: It’s not easy for us to make money.” 

Meanwhile, the contractors that offer a replacement gas furnace can get it done within days or even hours and can charge half as much and make way more money,” he said. 

Why homes need to electrify, and fast 

These are the kinds of on-the-ground complications that can make home electrification an uphill battle. Finding ways to surmount them will be vital to achieving the mass-market residential fuel-switching that study after study indicates is necessary to drive down U.S. carbon emissions fast enough to mitigate the worst impacts of climate change. 

There are definite benefits afforded to homeowners who make the switch. Electric heating and cooking are safer and healthier than natural-gas-burning appliances, which cause harmful pollution both inside and outside homes. New all-electric homes also have lower lifetime operating costs than homes built to use electric and natural gas, even in cold climates, according to research from nonprofit organization RMI. (Canary Media is an independent affiliate of RMI.) 

But retrofitting existing homes is a more complicated matter. According to a white paper from the Austin, Texas–based nonprofit research organization Pecan Street, one in four of the country’s 86 million single-family homes is fully electrified, leaving about 65 million that must transition from fossil fuels to electric-powered energy sources. 

And while a majority of homes have electric dryers and stoves, only 2 percent have an EV charger at home, and only 10 percent have two-way heat pumps (now the gold standard for efficient electric HVAC equipment, compared to the old-fashioned and inefficient resistance electric heating systems of yesteryear). EV chargers and heat pumps are two of the larger and more challenging sources of electricity demand to manage — and they’re both about to become much more common.

(Pecan Street)

According to Pecan Street, these transitions will require millions of households to upgrade to higher-capacity electric panels” — 48 million of them, to be precise, or about three-quarters of the homes that await electrification. Those panel upgrades will cost between $1,000 and $5,000 on average, the white paper states, necessitating weeks of work with electricians and permitting authorities. Other experts project that the costs will be even higher, especially in parts of the country with more onerous permitting requirements, such as California. 

Dealing with house-by-house electrification limits

Russell Unger, a principal with RMI’s building electrification initiative, doesn’t downplay the big-picture challenges for achieving full home electrification in the U.S.

At the same time, he said, It’s important to recognize that there’s enormous headroom for electrification. There’s an enormous [number] of households that can be electrified right now without any trouble.” 

Sean Armstrong, managing principal of California-based Redwood Energy, agreed. He’s been designing all-electric new homes and retrofits for the past 25 years, and he sees the climate-change-driven upswing in homeowners seeking help with electrification in a historical context. 

We are in the early-adopter curve of people purposely electrifying their gas loads now,” he said. But people have been electrifying gas loads forever,” from the earliest days of replacing gas lamps with incandescent light bulbs to the rural-electrification programs of the New Deal and the post–World War II Live Better Electrically” campaigns of General Electric, Westinghouse and electric utilities, which mass-marketed a range of electric appliances including the first generation of electric heat pumps. 

Electric technologies have advanced dramatically in the decades since then, but the regulations for electrical service panels haven’t kept pace, Armstrong said. Most new homes have been required to have at least 100-amp service panels since the 1960s, but most states have not updated those requirements to call for the 200-amp panels that would more easily accommodate electrification. California, often the leader in such moves, only started requiring 200-amp service in new homes in 2019, he said.

Putting U.S. homeowners on a watt diet” 

Whether or not a 100-amp panel can handle different levels of electrification depends on whether you’re above average in your energy demands,” Armstrong said, and whether you’re dedicated to having [enough capacity to meet] a certain worst-case scenario combination of energy draws.” In other words, does a homeowner want to ensure they can use all of their electric appliances and equipment at the same time? If not, they might be able to avoid an electric panel upgrade. 

The National Electrical Code, which governs all 50 states, requires electrical panels to be sized to support the maximum simultaneous draw of every load connected to them. But most homes don’t actually ever run all their appliances at full blast at once. That gives homeowners and contractors some leeway to design systems that don’t bring the code into play, such as retrofits that involve plugged-in appliances as opposed to hard-wired” systems like central HVAC systems, he said. 

In fact, Redwood Energy’s pocket guide to all-electric retrofits lays out how well-designed electrification projects, based on what it calls a watt diet” approach, can support a full range of high-efficiency, all-electric appliances through a 100-amp panel in a relatively roomy 3,000-square-foot home.

(Redwood Energy)

But being able to achieve so much electrification without a panel upgrade does require a fair amount of planning and forethought. Homes may require air-sealing and insulation to reduce the power needed to heat and move air from heat pumps throughout the house. And homeowners may need to avoid purchasing appliances that use resistance heating. 

Resistance heat is what crushes the limits,” said Nate Adams, a well-known proponent and practitioner of home electrification, and co-founder and CEO of HVAC 2.0. That’s because heating metal coils to a glowing red (think of old-fashioned electric stovetops) uses electricity much less efficiently than heat pumps, which tap the ambient temperature of indoor and outdoor air. 

Some heat-pump models include resistance heating to boost heat output when outdoor temperatures drop below a certain level. When those resistance coils kick in, their power draw goes way up. Some all-electric clothes dryers also include resistance heating elements to dry clothes faster. 

There are alternatives, however. Condensing washer-dryer units have electricity demands low enough to use a standard 120-volt plug instead of the 240 volts usually required for dryers. And the latest versions of heat pumps for cold-weather regions can be programmed to avoid turning on their resistance heating elements, while some don’t have them at all. 

Can today’s heat pumps provide enough comfort in colder climates?

The challenge for heat pumps comes when outdoor temperatures drop very low, which makes it harder to bring indoor temperatures to comfortable levels. How much electrical load a home will need to support its heat pumps largely depends on what climate zone” it’s in, Adams said. The International Energy Conservation Code defines these zones from warmer to colder on a scale of 1 to 8. Here’s a map of zones in the U.S.

Pacific Northwest National Laboratory

Climate zones 1 to 4 are fairly easy” to serve with a heat pump, Adams said. A 100-amp electrical panel can often suffice to power the single heat-pump system needed for homes of less than 2,500 square feet or so, he said. 

But in climate zones 5 and up, many homes will need a form of backup heat, he said. Choosing electric resistance heat as a backup will likely require upgrading to a 200-amp panel. Homeowners can also rely on gas, propane or oil heating as a backup during cold snaps; they would still be dramatically reducing their use of fossil fuels, though not eliminating it. Alternately, homes can be air-sealed and insulated to reduce the amount of heating needed to keep them warm, allowing a heat pump can do the vast majority of the job, he said.*

Armstrong pointed out that the most modern heat pumps from companies such as Japan’s Mitsubishi and Fujitsu, or from Haier, the Chinese-based owner of General Electric’s appliances division, can manage temperatures as low as negative 15 degrees Fahrenheit without resistance heating, which could reduce the need for panel upgrades. 

Getting buy-in from customers and contractors alike 

Not all of the most modern all-electric appliances are readily available throughout the country, however. Nationwide and regional distributors of HVAC equipment play a big role in what contractors like GreenSavers can offer their customers, Aaker said. 

They’re sending their teams out there to [promote] whatever they think they’re going to make money on,” he said. If distributors and HVAC industry contractors’ organizations could be compelled to get behind a movement — Get ready, all you HVAC contractors, electrification is coming’ — that would help move that future closer.” 

Brian Stewart, a former vice president of sustainability at footwear giant Nike who co-founded the electrification advocacy and education group Electrify Now, agrees that getting contractors competent and excited” about all-electric retrofits is a key step in speeding the pace of growth. 

This isn’t some kind of hippie compromise, live-in-the-woods solution,” he said. The latest all-electric heaters and appliances are simply better than their fossil-fueled equivalents, he contends. But as soon as you call a water heater guy, he’ll tell you you’re crazy to rip out your gas water heater and put a heat pump in.” 

That’s despite the significant investments that manufacturers have put into heat-pump space heaters and water heaters to make them increasingly energy-efficient and capable of handling cold-weather conditions, Stewart said. 

I think manufacturers are still waiting for the wave of orders to come in for the heat-pump [space and] water heaters they’ve invested a significant amount of R&D in, and it just hasn’t arrived yet.” 

The HVAC industry in the U.S. lags behind its counterparts in other regions of the world in this domain, Aaker said. For example, outside the U.S., mini-split” heat pumps that also serve as air conditioners are common and can sometimes provide more efficient room-to-room temperature control than centralized HVAC systems. But when companies such Panasonic and Daiken came to U.S. markets with their heat-pump models, customer response was so lukewarm,” Stewart said. Americans don’t want this thing hanging on their walls.” 

Frank talk about payback

Contractors also need to be forthright with customers about the different payback timelines for all-electric appliances to offset their additional upfront costs in energy savings, Aaker said. 

Paybacks make sense for certain things,” he said. Heat-pump water heaters, for example, are so much more efficient than electric resistance or natural-gas water heaters that they could earn back their additional cost in utility bill savings within five to seven years, which is about the time that most homeowners can expect to still be living in the home they’re paying to upgrade. 

But other installations like heat-pump air heating or induction stovetops aren’t likely to yield significant utility bill paybacks within less than a decade, he said. That’s why most residential efficiency investments are sold not based on their cost benefits, but rather on the more salient issues of how they can improve homeowners’ lives — making homes more comfortable, reducing health risks or increasing potential resale value. 

The biggest impediment to [home electrification] on a grand scale is that, barring some movement where you’re educating people on what they need for the future of their home and incentivizing them to do the right thing, it’s just not the cheapest, easiest thing to do,” said Aaker. 

Pro-electrification policies across the U.S.

More and more states are offering incentives to go electric. The American Council for an Energy-Efficient Economy’s latest report on state-level efficiency policy tallied up 15 states offering building electrification programs with a combined budget of $166 million. Some states have a single program, while others have multiple programs, as this map indicates.

American Council for an Energy Efficient Economy

In the past year, new policies to encourage fuel-switching” have been launched in Colorado, Illinois, Massachusetts and Minnesota to nudge homeowners away from fossil-fueled heating and toward heat pumps. Extreme weather disasters last year, including the winter-storm-driven power outages in Texas and last summer’s heat waves in the Pacific Northwest, have focused policymakers’ attention on the climate crisis, said Weston Berg, senior researcher at the American Council for an Energy-Efficient Economy and lead author of the report. 

Space heating and water heating are the primary focus of these state programs, receiving incentives in 90 percent and 71 percent of all the programs the council studied, respectively. Cold-weather states such as Minnesota and New York offer specific incentives for cold-climate air-source heat pumps, which are designed to provide ample space heating even at low ambient temperatures,” the report states. 

These kinds of incentives don’t address the full range of barriers to electrification, however, RMI’s Unger said. Another important step will be to make sure that our codes are requiring that panels have enough capacity” to support full electrification, such as mandating 200-amp electrical panels and household wiring that can handle electric heating and appliances, he said. California’s latest building codes require electrification-ready” new buildings, and a number of cities are passing or considering similar requirements, he said. 

At the federal level, the stalled Build Back Better bill being promoted by the Biden administration and Democrats in Congress contains provisions promoted by the advocacy group Rewiring America that would offer significant incentives for all-electric appliances as well as electrical panel upgrades to support them.

Designing the right kind of incentives 

Bundling incentives in this way is important, Rewiring America President Ari Matusiak told Canary Media last year, because most homeowners tend to replace heaters and appliances when they break down or reach their end of life. Any barriers to that process — such as discovering that a home’s electrical panel will require a separate costly and time-consuming upgrade before it can support an all-electric replacement — make it harder for homeowners to choose the all-electric option. 

Groups such as Pecan Street and RMI also emphasize the importance of significant incentives for electrical panel upgrades. When people are doing work on their houses, let’s help them upgrade their panels as part of what they’re doing,” said RMI’s Unger. 

Utilities will also need to get involved as more and more homes electrify and put more strain on the power lines and transformers that serve neighborhoods, Unger said. While it’s unusual for home electrification projects to trigger the need for a utility service upgrade, it’s quite costly and time-consuming when it does happen, requiring utility work crews to string larger wires from overhead poles or even dig trenches to lay new underground wires. Utility service upgrades usually occur in the context of more substantial electric-system overhauls of the kind that are relatively rare today but will become more common as electrification spreads, he said. 

Stewart, the co-founder of Electrify Now, said it’s important to start moving quickly on electrification upgrades now, not just to meet pressing decarbonization deadlines but also to unleash the economic activity and employment growth involved in such a massive undertaking. 

When someone rolls up and does a calculation on how much it will cost to electrify every house in the United States, it will be some outrageous number,” he said. But every one of those homes has a furnace that’s going to break, has a water heater that’s going to break.” So the equipment will need to be replaced at some point anyway. We can think about this as unleashing private capital,” he said. And deploying that capital will create a lot of jobs.

One way to speed up home electrification is to set up electrical panels so they prevent multiple power-heavy appliances from being turned on at the same time. A number of companies are developing innovative tools and approaches to do this, and they’re gaining traction with homeowners who have rooftop solar, batteries and EVs. We’ll cover this burgeoning sector in a follow-up article.

*Clarification: This story has been updated to provide additional information on how homes in cold climates can manage heating demand in the course of shifting from fossil-fuel-fired to electric heating systems.

Jeff St. John is director of news and special projects at Canary Media.