Utility Influences on High-Performance HVAC/Electrification
There is a growing trend in some areas of the U.S. to “electrify” homes by getting rid of gas appliances and replacing them with high-efficiency electric alternatives. These efforts tend to be concentrated in the same areas where climate change concerns are top of mind, and that’s no coincidence. These are the same areas where decades of accommodative policy have allowed cleaner sources of electricity to outpace fossil fuels like natural gas, coal, and oil for electricity production.
This grid cleanup has made it possible for buildings to reduce their carbon footprint by switching from combustion to electricity for cooking, water heating, and space heating. Policymakers in these areas have recognized this and are making a big push for building electrification, especially in homes.
At face value, encouraging the switch to electricity seems like a no-brainer to policymakers trying to figure out how to curb emissions. With efficient electric technologies, homes in areas with a relatively clean grid can produce fewer emissions using electricity than by burning gas to heat their home, water, and food.
Changes are A-Coming
As the grid shifts toward renewables like solar and wind, the benefits become even more significant. However, there is more to the story that isn’t at the forefront of these policy decisions. Let’s take a close look at some tough questions. We’ll focus on HVAC electrification and heat pumps for space heating. We’ll cover how you — as a contractor — can help customers who want to switch to navigate the potential pitfalls.
How Will Switching Impact Customer Bills? Isn’t Electricity Expensive?
Nationwide, electricity is more expensive than gas per unit of energy from the meter. This price discrepancy is largely offset because heat pumps are about three times as efficient as furnaces. Heat pumps produce more heat with less energy.
On average, the energy costs for heating with a heat pump versus with a gas furnace are about the same. In some areas, folks will save a little money. In other areas, they’ll end up paying more with a heat pump. That will depend on electricity, gas prices, the climate, the construction of their home, and other nuances.
Heat pumps are not a slam-dunk energy efficiency measure that will pay for themselves in a couple of years. Natural gas prices will likely increase more quickly than electricity going forward, so the monetary benefits should improve. That said, most customers wanting to switch to a heat pump will do it for other reasons. Some include the environmental benefits of electrification or the opportunity to gain air conditioning if they didn’t have it before.
When discussing a potential electrification job with a customer, be sure you have your message right. Don’t overpromise on utility bill savings.
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