Building Electrification: Programs and Best Practices

Published by ACEEE
Key Findings
Programs to promote the electrification of space heating, water heating, and other end uses of fossil fuels in buildings are expanding across the country. In a previous study, in 2020, ACEEE identified 22 programs with total annual spending of $108 million. This updated and expanded study—assessing the inventory of building electrification efforts to date—includes 42 programs. Of these, 32 programs reported budget data, with a collective annual budget of $166 million.

Air-source heat pumps for single-family residential space heating were the primary technology focus in 90% of the building electrification programs included in this study, primarily because space heating, as the largest fossil fuel energy use in the typical American home, presents a huge decarbonization opportunity.

When building efficiency upgrades (such as weatherization to improve building envelopes) are paired with electrification of space- and water-heating systems, those systems can be designed to serve a smaller thermal load, reducing upfront cost, improving comfort, and lowering peak electric demand.

Typical utility-run electrification programs usually involve technology-based rebates to residential customers. Nonutility program administrators are more likely to offer more comprehensive program models, including whole-home retrofit programs, financing for upgrades, workforce training programs, low- and moderate-income programs, market development, and other strategies.

Upstream incentives for heat pump manufacturers are not widely represented in this survey of programs but present an opportunity for even more cost-effective energy savings and greenhouse gas reductions because they are scalable and savings can be passed on to end-use customers.

Low- and moderate-income (LMI) customers and renters face significant obstacles to enjoying the benefits of building electrification. While some programs specifically target the needs of these customers, this segment of the market requires increased attention.

Where possible, electrification programs, measures, and incentives should be braided into existing energy efficiency programs to increase their reach and engagement with hard-to-reach customer groups such as low-income and multifamily households.

Contractors play a key role in building electrification. Expanding the workforce and educating and motivating contractors to install and service heat pumps is a critical strategy for scaling up capacity for electrification in buildings.