There has been a disjointed yet steady push to move residents in San Mateo County, the Bay Area, California and the nation away from natural gas use in the home and toward electrification.
The growing argument for the push is to aid in climate change and has shifted quickly from the days when natural gas was heralded as a clean energy. Now, natural gas, actually methane, has been the subject of rising debate. There are state codes for energy and green building standards that local governments can exceed, and doing so is known as passing reach codes. In San Mateo County, there have been different iterations of reach codes over several years now, and many of the new rules depends on the city. For the most part, the new rules target new construction and, now, significant remodels, meaning new appliances should be electric or there should be wiring made available for new electric appliances. Most recently, the conversation has turned to eliminating gas appliances in current homes and even businesses, which is a completely different task tangled with costs both seen and unseen: Including the specter of unintended consequences similar to the deregulation of our state’s utilities, which led to the energy crisis from 2000 to 2001.
In addition, the Bay Area Air Quality Management District will be weighing a proposal March 15 that would require that all new water heaters be electric starting in 2027 and all new furnaces be electric by 2029.
The rationale for this effort is that natural gas, which has been known to be clean burning, is less than safe when it leaks. There has been a recent study that says it can leak inside the home and could contribute to health problems; though, much of it can be ameliorated by using the stove vent. There have also been studies about the impact of nitrogen dioxide when it burns, and that appears to be a more serious concern, which the air quality district seeks to address through its new rules. The push is to discontinue burning things to produce our energy. It’s a worthwhile goal but incredibly challenging.
Trouble is, creating these new regulations in this piecemeal approach is creating confusion, concern and anxiety. There has been very little discussion about the cost to the average person, from an easy transition to ones that require a new electrical panel or service. One estimate I heard is that the average cost would be $8,000 per household. Another estimate from a Realtor group shows a high end cost of $250,000.
Let’s give an example. There is an estimated 41,000 households in the city of San Mateo. At the low end of the estimate, $8,000, we are looking at a $330 million total cost to convert all current households to electric in this one city. And that doesn’t include businesses. Even at the low end, that’s the kind of capital outlay deserving of a bond.
And that brings me to my larger point: There are two better approaches to moving us to electric, if that is in fact the goal. And both need to be statewide.
The first approach is for the state to provide incentives to researchers, manufacturers, retailers, contractors, homeowners and cities to move toward voluntary electrification. By providing incentives, it will encourage new thinking on how the appliances work and bring new products to market and into people’s homes on their own schedule but accelerated through this effort. This will likely take a statewide bond, which is good since we should all agree these are the steps we need to take.
The second approach is to also have a statewide bond to pay for what is in reality an enormous public works project with what should be a very long timeline. The ballot language should specify the need and cost and outline the timeline for transition. Every household should be eligible regardless of income, and there could be exemptions based on hardship, cultural issues, etc. In this approach, propane would be on a secondary timeline as it has less significant greenhouse impact when it leaks than methane and is largely used in rural areas where the transition will be more difficult and the air quality impact is less severe because of lower populations. Part of the bond should also go toward ensuring our electrical grid can handle the increased load and for local and micro-regional battery backups for small area outages.
The recent storms and outages have highlighted that our electrical system is not nearly ready for full electrification. Having dual commodities ensures there is an ability to keep systems operational and homes heated when the electricity goes out. Many new generator systems also run on natural gas in emergencies. There needs to be allowances for that.
Moving the state to an all-electric future is an incredibly large task. It cannot be led in small groups as it is now, especially when the information coming from these small groups is incomplete or dismissive to legitimate concerns.
We have had several years of local discussion on approaches to eliminating gas in our homes. I have watched the deliberations, and listened to proponents who typically stick to end-of-the-world panic arguments and half-baked propaganda that essentially states it’s easy and cheap without diving into real world details, especially for those without the same perspectives or financial means. Based on this, I have very little confidence that any local policy will be enacted in a way that doesn’t cause harm to the people such decisions purport to serve.
This should be a statewide issue, led by the state and voted on by the people. We in California are reasonable, caring and smart. We also lead the way on the environment and we don’t want this effort to fail; so let’s treat this issue with the magnitude it has and with the seriousness it deserves.
Jon Mays is the editor-in-chief of the Daily Journal. He can be reached at jon@smdailyjournal.com. Follow Jon on Twitter @jonmays.
NOTE TO READERS: This column has been changed to add information about the BAAQMD rule changes regarding the elimination of nitrogen dioxide caused by the burning of natural gas.
(21) comments
It seems like anything the state does makes your life more expensive, more of a hassle, or both.
Peninsula Clean Energy and the Bay Area Regional Energy Network provide a number of rebates for home energy improvements. We replaced our gas water heater with a heat pump water heater in October and received an $1150 rebate from BayREN and a $3500 rebate from PCE. More information on these rebates can be found here:
https://www.peninsulacleanenergy.com/residential-programs/
https://www.bayren.org/rebates-financing/single-family-homeowners
Additionally, the 2022 Inflation Reduction Act provides tax credits for energy efficient and clean energy home improvements:
https://www.americanprogress.org/article/how-the-inflation-reduction-act-will-save-households-money-in-2023/
There's also the federal High-Efficiency Electric Home Rebates Act (HEERA) and Home Owner Managing Energy Savings (HOMES) Act rebate programs that provide up to $14K in rebates for energy efficient home improvements, including electric appliances:
https://www.energy.ca.gov/programs-and-topics/programs/inflation-reduction-act-residential-energy-rebate-programs-california
Seema - will you be so kind as to disclose what your final cost was after all of the rebates. Also, how is it working out in terms of sufficient hot water and how did it affect your electricity bill?. That information would be quite helpful and could make a difference for many who are on the fence. thank you.
Here is my experience: the net installed cost to our family, after rebates, was $2,500 for a heat pump water heater, about the same as what plumbers are charging for emergency replacement of gas water heaters. Our old gas water heater which was at the end of its life, was using 7 therms of gas a month, at current rates, over $15 per month or more. Our electric heat pump water heater uses 42KWH a month, around $13 per month at PGE/PCE rates. Same cost to install as gas, less expensive to run than gas, no emissions of CO2 or unburnt methane to the atmosphere.
Thank you Robert, that is encouraging. How is the recovery rate as that seems to be an issue for some? Did you have a leak before as you mention that unburnt methane was going into the atmosphere?
Hi Dirk, happy to share! The total cost to replace our 14 year old gas water heater was $8,614. However, we learned that our existing installation in our basement was no longer up to code or following best practices.
Our invoice did not include a price breakdown, but we selected a Rheem Pro Terra 50 gal heat pump water heater which retails for $1,936 at Home Depot. The remainder of the cost was a new drip pan, earthquake straps, expansion tank, shutoff and check valves, transfer pump and running new temperature & pressure lines and condensation lines to the exterior of our house. And labor! There may also have been a premium charge since this was an emergency installation.
The way I see it, the rebates helped offset the cost of bringing our setup up to code.
We have solar so there was no impact to our electricity bill. It's hard to tell how much electricity it's consuming because we had it installed in October around the same time that our gas furnace (with an electric fan) started kicking on.
No issues with the temperature and supply of hot water, especially since we went from a 40 gal to a 50 gal tank.
It's worth noting that the current rebates & incentives process requires the homeowner to front the cost of installation, which will be challenging for many.
Thank you Seema - along with Mr. Whitehair's responses we are now developing useful case studies that take a lot of unknowns away. Clearly, electrification is not for everyone but in the right set of circumstances it appears to be feasible. As long as it is not mandatory, we should all look into it and make a decision based on our situations. That would include economics and willingness to pay for a cleaner, local environment.
The rebates would hardly dent the cost of retrofitting the average home.
Thank you for sharing, Seema! People objecting to costs need to see that there is support, particularly for low- to moderate-income households (up $8k for HVAC in the IRA)!
There is no cogent argument for total electrification - zero.
Total electrification eliminates 10 - 15 tons of CO2 emissions from every home, per year. Our home has cleaner air, and we have no emissions. We decided that it made no sense to replace dirty-gas equipment with electrical equipment, and I encourage you to do the same.
That means absolutely nothing.Your false altruism is honestly disgusting.
Thank you for your excellent article. I would add that it's not cost effective to retro fit homes and buildings. More would be gained spending it on expanding the electrical grid which is no where close to being able our future electrical demand.
It is in fact quite cost effective to retrofit homes with electrical appliances and equipment. Because our family had to replace our gas fired equipment in our 71 year old home anyway, why oh why would we ever replace with gas? See my reply above. Installation costs of electric equipment are similar or slightly lower than gas replacements, the operating costs of electric equipment are lower, and we no longer dump CO2, benzene, carbon monoxide and unburnt methane into our home or the atmosphere. The total cost to replace our gas water heater, gas stove, and gas furnace, and get rid of our dryer (replaced with a solar dryer aka clothes line) was $30,000, only $7,000 more than replacement with gas. Is $7,000 too much to spend to save the environment for my grandchildren and everyone on the planet? By the way, PCE, and the Cities of Half Moon Bay and San Mateo have confirmed that my family's installation experience is typical. Please note that the real estate industry retrofit numbers are highly inflated/exaggerated, for what purpose I do not know.
Thanks, Mr. Mays, for your letter. However, an average cost range of $8k to $250k to convert to all-electrical? That’s a huge gap. Many may average the two and be hesitant to spend $120k to convert; at that cost, or any cost, many might never realize a return on investment. Perhaps the industry should find a way to report normalized data, as in cost per square foot to make the costs more easily digested.
But ultimately, the cost to convert to all-electric is beside the point… the elephant, some would say dinosaur, in the room is where all this electricity will come from. One can easily access the California Energy Commissions website and see what type of fuel electricity is generated from (https://www.energy.ca.gov/data-reports/energy-almanac/california-electricity-data/2021-total-system-electric-generation). Natural gas is head and shoulders above all total renewable sources, combined. One can also review the statistics for electricity generation for the past twenty years (https://www.energy.ca.gov/data-reports/energy-almanac/california-electricity-data/electric-generation-capacity-and-energy). No surprise, natural gas is the winner for the past twenty years, and likely will be for the foreseeable future if nuclear energy is continually shunned (although the DOE recently awarded $1.1 billion to keep the Diablo Canyon nuclear facility running into the next decade). I’d also recommend folks read articles from Edward Ring and Carl Wurtz, contributors to the California Globe. Unlike many others pushing for all-electrification with no data, these two have done their homework and provide many eye-opening statistics on why a life without fossil fuels is a pipe dream (my words).
Meanwhile, the UK is firing up coal generators because their “green” energy can’t keep up. Germany, last year, purchased over 44 million tonnes of coal, mostly from Russia. China purchased $114 billion worth of oil from Russia (while increasing coal mining operations in China). India is planning on importing 33 times more oil from Russia than last year. China plans to build almost 200 coal power plants this year. Overall global use of coal has climbed to a record high of over 8 billion tonnes. Even if we covered the Earth in solar panels, I doubt we’d be able to supply enough electricity for the world, and maybe not even enough for America. A good back of the envelope calculation… More evidence that whatever we do in little old America won’t make a dent in reducing global warming unless you can convince the rest of the world to join in...
Terrence, I did not get many As in college, except in statistics. $125,000 is not even close to the average net incremental cost of electrification, which is closer to the $8,000 figure Jon Mays stated in his editorial. It cost my family $30,000 gross to replace our gas fired water heater, dryer, stove and furnace. After rebates, our incremental higher cost of electrification was only $7,000, and is that too much to spend on saving the planet? And note that every home owner and landlord will eventually replace gas fired equipment when it fails. Nothing lasts forever. Why would we replace gas with gas when so many clean alternatives are available and affordable?
Mr. Whitehairr, thanks for your response. I also feel $125,000 is a high number to convert, but then I don’t own a mansion or an apartment building. I was only doing what most people would, averaging the ranges provided by Mr. Mays. Your experience cost you a net $7000, but what is the floor area/cubic volume of your house? One reason I was suggesting a way to normalize data… so people can quickly estimate associated costs…
You ask if it’s worth $7,000 to save the environment. As noted earlier, you’re not saving the environment since your electricity is provided mostly by fossil-fuel generation plants (the dinosaur in the room not addressed). An added note, it’s been reported that California wildfires in 2020 created enough carbon emissions to offset 16 years of reductions, twice over. If folks really cared about our environment, they’d be insisting that our “take from the poor and middle class to subsidize the rich” “green” funds go towards wildfire management (to benefit everyone).
I have no issues if folks want to go all-electric – just don’t try to sell it as a “clean” alternative or a panacea to saving the environment, because it isn’t. BTW, a goddess of global warming, Greta Thunberg, was caught deleting a 2018 tweet saying humanity was going to be extinct by 2023. I’m not sure why since 2023 isn’t over and WWIII is still on the table… so humanity still may become extinct, just not via climate change.
Dear Jon Mays, thank you for the op ed this morning on a strategy to eliminate methane, aka "natural" gas from our homes and businesses. The sooner we get rid of gas, the better, and there are so many ways this can be done equitably, at the lowest possible cost. I hope all your readers agree that we must be prepared to eliminate all that gas fired equipment, especially when it fails. For example, somewhere around 2500 gas water heaters are replaced every year, just within the city limits of San Mateo. Let's work together to find a way to replace every single one of them with electric heat pump water heaters using 100% clean energy. To replace gas with gas is a lost opportunity. We can and will do better. Robert Whitehair, San Mateo
Mr. Whitehair - your local electricity provider, PCE, will not be able to handle this increased load with carbon free energy for some time. Also, if you can live with a low recovery heat pump water heater, showering with lukewarm water and you have a teenager living in your house, good luck. Our infrastructure is simply not ready for this increased demand on the electric grid, no matter how much you pray, and neither are our wallets. Mr. Mays is rightly pointing out that electrification is possible and may be even desirable but it will take time and a lot of resources.
We had a teenager, my grandson, come for a visit. We had no complaints about hot water. Our hybrid heat pump water heater never produces lukewarm water, and the resistance element has never come on in more than 2 years we have owned it. PCE currently provides clean energy, all we need, on a year to year basis, and has committed to 24/7/365 clean power by 2025. The United States doubled its electricity output in the 1950s, and again in the 1960s. We can do it again. To take the position that we will never have enough electrical power will become a self fulfilling prophesy. Electrification is the most immediate, direct, personal action we can take to stop the climate crisis.I encourage you to take advantage of the Inflation Reduction Act and PCE rebates, to electrify your home.
Mr. Whitehair - thank you for your responses. I trust that your conversions can serve as a model for others who are contemplating electrification when their gas equipment has reached their lifespan. I admit that I was quite weary of your initial responses but you have actually come through. Thank you.
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