Building Electrification Could Recharge Our Economy – And Save The Climate – Forbes Innovation

It’s been a record-setting year for temperature extremes, with a polar vortex hitting Texas in February and heat domes hovering over the country this summer. As climate change worsens, we’re facing a dangerous feedback loop: more frequent extreme weather events increase heating and cooling demand, risking more greenhouse gas emissions that worsen the climate crisis.

The budget reconciliation bill Congress is now considering offers a historic opportunity to dramatically reduce emissions from our buildings, while improving home efficiency, cutting bills, and creating hundreds of thousands of new jobs: A true win-win for the economy and the environment.

Electrification—replacing fossil-fueled appliances with efficient electric appliances powered by clean electricity—is the most viable solution to curtail planet-warming emissions and eliminate harmful indoor air pollutants without compromising comfort. Proven technologies like all-electric heat pumps, which provide both heating and cooling, as well as electric dryers and induction stoves are up to four times more efficient than fossil-fueled alternatives, saving consumers money, and are available on the market now.

As we clean our power supply – another critical piece of the budget reconciliation bill, enabled by the proposed $150 billion Clean Electricity Payment Program – we must also rapidly accelerate electric appliance adoption by homes and businesses across the country. That’s where smart federal and state policy to drive down costs, transform the market, and quickly scale adoption comes in.

Targeted incentives can help make electric appliances more affordable in the near-term as technology costs fall, and consumer rebates are enormously popular. Updated standards for new appliances and all-electric building codes can also help achieve all-electric building stock by 2050 – when scientists agree we must reach net-zero emissions to protect a livable planet. Workforce training programs can develop the skilled workers needed to build this clean future. And we must prioritize an equitable transition with policies supporting adoption by lower- and fixed-income households and frontline communities.

The problem: fossil fuel-reliant infrastructure 

Over a hundred million buildings burn fossil fuels for heating and cooking, contributing 13% of U.S. emissions, and new construction keeps increasing these emissions. Nearly 1.4 million new homes were constructed just last month alone, and more than half of all new homes are built with fossil gas heating or appliances.

Because the average appliance lasts 10 to 15 years and most buildings for at least 50 years, every new appliance or structure burning gas or other fossil fuels locks in higher emissions and costs for decades. Energy Innovation modeling shows electrifying all new buildings by 2025 and all new equipment by 2030 is essential for reaching net-zero by 2050. 

Burning fossil fuels in buildings harms our health. Homes with gas stoves can have nitrogen dioxide concentrations 50% to 400% higher than homes with electric stoves, and children living in homes with a gas stove have a 24% to 42% increased risk of developing asthma.

Harvard research shows the health impacts of pollution from burning gas, biomass, and wood in industrial boilers and buildings now surpass the impact of air pollution from dirty coal plants. Commercial and residential buildings in the U.S. are now responsible for approximately 18,300 early deaths and $205 billion in health impacts—one-third of the health burden from stationary source pollution.

Rising energy costs and negative health impacts of fossil-fueled buildings disproportionately burden low-income consumers, communities of color, and frontline communities, making building electrification an essential part of rectifying long-standing environmental justice concerns.

Widespread benefits of electrification

Getting fossil fuels out of buildings is necessary for protecting public health and stabilizing the climate, but it’s also an economic powerhouse.

RMI research shows that all-electric new homes reduce homeowner costs and harmful emissions. For example, an all-electric home in New York City creates $6,800 in household savings over 15 years compared to a fossil-fueled home.

Electrification retrofits are also cost-effective. Rewiring America research found 85% of U.S. households would save money on monthly energy bills if they used modern all-electric equipment, and ACEEE analysis shows 27% of U.S. commercial space can be electrified with a payback of less than 10 years, even without rebates. Targeted commercial incentives and appliance standards would increase this percentage. Policies must account for costs associated with electrical upgrades and labor, in addition to the effort needed to facilitate the adoption of newer technologies.

Building or retrofitting every building in the U.S. will require hundreds of thousands of skilled workers and create demand for other clean energy jobs in the utility sector. Building electrification would support a net increase of more than 104,000 jobs just in California, and clean energy workers typically earn higher and more equitable wages compared to the national workforce.

Policy pathways to electrify buildings

But realizing these benefits and ensuring our building stock is fully electrified in the short time we have left to act requires stronger national policies, bolstered by state and local leadership.

The budget reconciliation process underway in Congress is a tremendous opportunity to adopt smart building policies and programs that will yield benefits for millions of Americans now and for decades to come.

For example, the House Energy and Commerce Committee’s Build Back Better Act invests $18 billion in home efficiency and electric appliance rebates, including $9 billion for a new High Efficiency Electric Home Rebate Program, modeled after Senator Martin Heinrich’s Zero-Emission Homes Act. Rebates up to $10,000 for electric appliances and equipment in single-family homes and multi-family buildings would offset the higher upfront cost of all-electric heat pumps, dryers, and cooktops (faster than the market would on its own) and expedite clean replacement well before 2050.

The proposal wisely carves out $5.5 billion to offer higher incentives for low-income households, for tribes, and for projects located in pollution-burdened communities. The proposal also includes an incentive to cover any needed electrical upgrades and an added incentive for contractors implementing electrification projects. Other provisions offer funding for contractor training programs, which are key to growing a highly-skilled electrification workforce.

Other proposals from the House would expand and improve existing incentive programs, ensuring all homes and buildings are increasingly efficient. Expanded and targeted investment for families and businesses that struggle to afford energy is essential for an equitable transition, particularly in communities with high electricity prices and heating demand. Energy efficiency investments will reduce energy burdens while protecting people from weather extremes.

Beyond the ongoing legislative efforts, the federal government’s regulatory authority is a not-to-be-overlooked tool for electrification. The Environmental Protection Agency and Department of Energy can and should adopt next generation appliance emissions and efficiency standards that would cut pollution and offer consumer savings, while stimulating the domestic market for new technologies. For example, an RMI analysis shows that across the U.S., even in cold climates, heat pumps are 2 to nearly 5 times more energy efficient than an Energy Star gas furnace on an annual basis, yet they make up a small fraction of the HVAC market. Strong appliance standards would expedite deployment of clean, efficient heat pumps and other electric appliances, while also phasing out gas appliances more quickly.

Because buildings last for decades, and as new construction growth trends continue unabated, all-electric building codes are another necessary tool in the toolbox. Although every state and local government has the authority to adopt their own building codes, code-setting bodies should work swiftly to adopt more stringent codes that achieve building decarbonization by 2050. We also need a dedicated workforce training program would increase code compliance while preparing a new generation of workers to build the all-electric future.

California just took a major step in the right direction by adopting their 2022 Building Energy Efficiency Standards, which makes electric heat pumps standard for either water or space heating for single-family homes, multifamily and most commercial buildings. The code also requires all-electric readiness for single-family homes to help reduce the costs of future fossil fuel-to-electric appliance conversions. Meanwhile, cities requiring all-electric new construction are leading the way for other cities and states to follow.

Although states and cities are leading, the U.S. still lacks a standardized approach to building codes, which is essential for scaling electrification nationwide. The Assistance for Latest and Zero Building Energy Code proposal included in the Build Back Better Act is a positive step to address this challenge – it would offer $300 million in grants to help states and local governments adopt smart building codes, including zero-energy codes. More federal leadership on building decarbonization and smart energy codes would send a strong market signal and accelerate the transition.

Flip the switch on all-electric buildings for a safe climate and strong economy

The climate crisis is accelerating faster than predicted, with 1 in 3 Americans experiencing a dangerous climate event this year. In light of the recent IPCC report’s findings that every fraction of warming threatens greater instability, inaction risks an unlivable future.

Moving quickly to adopt efficient, all-electric technologies, through the enactment of strong policies, codes, and standards, will flip the switch on climate change, cut costs for consumers, protect public health, and grow the economy.

To ensure a livable planet, we must end our reliance on fossil fuels, including in our homes and buildings. But we don’t need to sacrifice comfort or performance. With the problem clear and the solutions known, now is the time for Congress to act.

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