“Making the switch from methane helps all our communities and region address some of the fastest growing sources of heat-trapping pollutants responsible for our changing climate,” San Mateo County Supervisor Dave Pine, who also is a Peninsula Clean Energy co-founder, said in a press release.
Peninsula Clean Energy is a local joint powers authority providing energy for San Mateo County and the city of Los Banos, founded in 2016 to offer lower and more sustainable energy. While PCE provides the electricity, Pacific Gas and Electric does the billing and also maintains the infrastructure. PCE is offering a Zero Percent Loan program with interest-free financing for up to $10,000 per home for projects that install electric heat pump equipment, including water heaters, heating, ventilation and air conditioning units, according to PCE.
The loans would last for two to 10 years and be repaid on monthly electric bills for PCE customers who are a homeowner. To qualify, people must have a zero past-due balance on their past three PG&E billing statements. The loans do not require a credit check. PCE requires customers to work with an approved contractor to be eligible for zero percent loans, which include Alternative HVAC Solutions, Awesome Plumbing, Building Efficiency, Caccia Plumbing and DG Heating & Air Conditioning, according to the PCE website. Contractors can also apply by email to be on the list. PCE CEO Jan Pepper said the new loan program saves hundreds of dollars by forgoing interest rates. It also helps people acquire the electric appliances needed to meet state and local requirements.
“It’s an opportunity to help people,” Pepper said. “We are going to get the money back, and as they come back, we can provide more loans.”
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Pepper said PCE is funding the program through its reserves built up over the years, with the funding part of a larger strategy to offer programs to help customers. PCE provides other incentives for acquiring used electric vehicles and a home upgrade program. The PCE board has allocated a million dollars to launch the loan program, around 100 loans. If the program is popular, Pepper said staff could come back to the board to authorize more money.
In addition to the loans, PCE is offering new rebates of up to $3,500 for installing an electric heat pump HVAC unit and is increasing current rebates to $3,000 for installing a heat pump water heater. Additional rebates of up to $1,000 are available for income-qualified residents through the California Alternate Rates for Energy and Family Electric Rate Assistance, which are state programs that offer discounts on electricity bills if you meet certain income requirements. A $1,500 electrical panel rebate is also available.
The additional financial help comes as many San Mateo County cities pass stricter building codes. Called reach codes, they are local ordinances that exceed the state’s requirements for energy building codes, like replacing appliances. Many cities are considering or mandating new building construction appliances be all-electric, while San Mateo wants to be a climate leader in reducing greenhouse gas emissions and is pushing for more requirements in older buildings when replacing applicants. From 2005 to 2017, San Mateo achieved an 18% decrease in emissions after adopting electric and more fuel-efficient vehicles and improved energy efficiency and water conservation. According to the city, transportation accounts for 50% of greenhouse gas emissions in San Mateo, followed by electricity and natural gas use in buildings at 34% of emissions. However, the upfront upgrade costs can be a barrier to conversion for residents, as prices can often run into tens of thousands of dollars. Requiring electric equipment may increase upfront project costs and have a long-term impact on utility costs, while not all homeowners have discretionary income for replacements, according to a San Mateo city staff report.
People can learn more about the program, eligibility requirements and next steps by going to peninsulacleanenergy.com/zero for more information.
Unfortunately, I don’t see a lot of money being saved as the issue is still the out-of-pocket capital costs to purchase and install replacement units (a loan is still a capital cost). There are no numbers showing return on investment (ROI) so allow me to take a gander…
If we look at PCE’s Joint Rate Comparisons paper, we can see that a 50% renewable rate, you may save between $3 to $10/month. If you opt for the 100% renewable plan, you won’t save any money. You’ll pay around $1 to $4/month more for your electricity. I’m ignoring the third PCE plan which is not “clean” as around 1/3 of the energy is from natural gas. Now I don’t know how much a new electric heat pump HVAC or water heater costs, but it won’t be zero, even with rebates. Let’s assume one has a net cost of $1000 (highly doubtful, but if you can bear with me…). If you opt for the 50% plan, it’ll take a little over 8 to 27 years to recoup your investment. On the 100% plan, you’ll never recoup your investment, you’ll go negative. Now if you double the net cost to $2000, it’ll double your ROI to 16 and 54 years, respectively. Of course, this example holds true only for electricity usage. I haven’t factored in gas costs and I also haven’t factored in the increased use of electricity due to all-electric appliances. Will these two costs cancel each other? Someone else with more time can do some calculations. Please, if anyone cares to, check my math – it’s sometimes hard to do math while on a Zoom call. Or provide a counterpoint, along with numbers.
The bottom line (whether my math is correct, or not) is whether it is worth the capital outlay to convert to all-electric, knowing that electricity continues to be provided mostly by fossil-fuel burning sources. Will you stay in the house long enough to receive an ROI? How many times have we had gas outages compared to electrical outages? How many times have we been told to conserve on natural gas to keep the “grid” from going down? Your house, your money, your choice. If you plan on going for it, take advantage of subsidies while you can. Otherwise, when it’s time, you may just want to replace your current electrically operated appliances with Energy-Star certified appliances. Hey, it’s a perfect time to ask the significant other if you can replace that old TV with a new one. You can take comfort knowing you’re helping to save the planet. As a plus you’ll have a new TV with new bells and whistles. Of course, dispose of your old TV responsibly.
But Terence, you just don't get it. You will be saving the planet, isn't that important enough? As far as the financial aspect is concerned, someone will have to pay for the interest free loans. That will likely come in the form of a surcharge for all PCE customers who still think they are helping with the mitigation of climate change.
From various impartial websites one can determine how cost effective these heat pump installations are. They are not, unless of course the cost of natural gas is skyrocketing. We should learn from the current situation in Germany and The Netherlands where energy costs have gone through the roof and many millions are now sitting in their homes without or with limited heat. I have no issue with this all-electric conversion but all who contemplate it should be fully informed of the economic and logistical consequences. As you have mentioned, there is little or no information on this important topic. And lastly, unlike PG&E, PCE is not a regulated energy provider and can raise rates at the behest of its Board. These are all Greeniacs, so be aware.
Dirk, you are so right! Shame on me for not caring about the planet even though China, India, and other developing countries continue to use fossil-fuels to their heart’s desire. Perhaps I’ll cogitate upon the error of my ways as I fly off for another vacation. Maybe when I return, I’ll be able to read about the costs of conversion and their performance from folks with personal experience.
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Unfortunately, I don’t see a lot of money being saved as the issue is still the out-of-pocket capital costs to purchase and install replacement units (a loan is still a capital cost). There are no numbers showing return on investment (ROI) so allow me to take a gander…
If we look at PCE’s Joint Rate Comparisons paper, we can see that a 50% renewable rate, you may save between $3 to $10/month. If you opt for the 100% renewable plan, you won’t save any money. You’ll pay around $1 to $4/month more for your electricity. I’m ignoring the third PCE plan which is not “clean” as around 1/3 of the energy is from natural gas. Now I don’t know how much a new electric heat pump HVAC or water heater costs, but it won’t be zero, even with rebates. Let’s assume one has a net cost of $1000 (highly doubtful, but if you can bear with me…). If you opt for the 50% plan, it’ll take a little over 8 to 27 years to recoup your investment. On the 100% plan, you’ll never recoup your investment, you’ll go negative. Now if you double the net cost to $2000, it’ll double your ROI to 16 and 54 years, respectively. Of course, this example holds true only for electricity usage. I haven’t factored in gas costs and I also haven’t factored in the increased use of electricity due to all-electric appliances. Will these two costs cancel each other? Someone else with more time can do some calculations. Please, if anyone cares to, check my math – it’s sometimes hard to do math while on a Zoom call. Or provide a counterpoint, along with numbers.
The bottom line (whether my math is correct, or not) is whether it is worth the capital outlay to convert to all-electric, knowing that electricity continues to be provided mostly by fossil-fuel burning sources. Will you stay in the house long enough to receive an ROI? How many times have we had gas outages compared to electrical outages? How many times have we been told to conserve on natural gas to keep the “grid” from going down? Your house, your money, your choice. If you plan on going for it, take advantage of subsidies while you can. Otherwise, when it’s time, you may just want to replace your current electrically operated appliances with Energy-Star certified appliances. Hey, it’s a perfect time to ask the significant other if you can replace that old TV with a new one. You can take comfort knowing you’re helping to save the planet. As a plus you’ll have a new TV with new bells and whistles. Of course, dispose of your old TV responsibly.
But Terence, you just don't get it. You will be saving the planet, isn't that important enough? As far as the financial aspect is concerned, someone will have to pay for the interest free loans. That will likely come in the form of a surcharge for all PCE customers who still think they are helping with the mitigation of climate change.
From various impartial websites one can determine how cost effective these heat pump installations are. They are not, unless of course the cost of natural gas is skyrocketing. We should learn from the current situation in Germany and The Netherlands where energy costs have gone through the roof and many millions are now sitting in their homes without or with limited heat. I have no issue with this all-electric conversion but all who contemplate it should be fully informed of the economic and logistical consequences. As you have mentioned, there is little or no information on this important topic. And lastly, unlike PG&E, PCE is not a regulated energy provider and can raise rates at the behest of its Board. These are all Greeniacs, so be aware.
Dirk, you are so right! Shame on me for not caring about the planet even though China, India, and other developing countries continue to use fossil-fuels to their heart’s desire. Perhaps I’ll cogitate upon the error of my ways as I fly off for another vacation. Maybe when I return, I’ll be able to read about the costs of conversion and their performance from folks with personal experience.
I guess the next step is they will have a down payment program and try to fund housing for those who agree to go all electric.
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Keep the discussion civilized. Absolutely NO personal attacks or insults directed toward writers, nor others who make comments.
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