Back
The region is finalizing its first-in-the-nation rule to limit the sale of polluting gas water heaters, which will take effect next year.
In 2023, the San Francisco Bay Area’s air district passed first-in-the-nation rules setting zero-emissions limits on home heating systems and water heaters. Now, the agency is working to address affordability concerns ahead of the water-heater rule’s finalization this year — and defuse calls from some regulators to scrap the policy altogether.
In their current form, the regulations would effectively prohibit the sale of gas appliances, beginning with water heaters in 2027 and then furnaces in 2029. Gas appliances spew noxious compounds, including nitrogen oxides (NOx) that contribute to the region’s smog. Pollution from furnaces and water heaters leads to as many as 85 early deaths in the community each year, the air district estimates. Those deaths, combined with illnesses and hospital visits, take a financial toll of up to $890 million annually.
But clean alternatives — zero-emissions heat pumps and heat-pump water heaters — are typically more expensive up front, even if they can save thousands of dollars on energy bills over time. From the beginning, Bay Area regulators, the majority of whom are elected city and county officials, vowed to institute the groundbreaking requirements with care.
The air district is now hammering out the details for implementing the water-heater rule, including a plan to offer one-time exemptions to low-income households and those with space and electrical constraints. Staff members, who are separate from the voting board and developed the proposal, estimate that the exemptions could apply to 38% of water-heater installations. They’ve also proposed delaying implementation by nine months, from January 2027 to October 2027, to set up the exemption system.
Several members of the agency’s board are seeking more drastic changes.
Eight of the 18 board directors in attendance at the body’s May 13 meeting expressed a desire to further delay the policy’s implementation date — or roll it back and make adoption of electric equipment voluntary instead. The board has a total of 24 directors.
“I just think it’s the wrong time to do this. … What’s the top-of-mind issue right now? It’s affordability,” said Alameda County Supervisor David Haubert, a board member in favor of loosening the rules. “It’s affordability of food, it’s affordability of electricity, it’s affordability of gas.”
Bay Area regulators have tightened NOx-emissions standards for water and space heaters for over 30 years. The municipalities of Berkeley, Emeryville, Los Altos Hills, Oakland, and San Francisco have passed local resolutions in favor of the latest appliance rules.
A majority of the board voiced their continued support for the water-heater standard, given gas-fired equipment’s insidious threats to public health.
“When we talk about affordability, let’s talk about the affordability of asthma,” said chair Lynda Hopkins, supervisor of Sonoma County, who supports the standards with the exemptions.
“Let’s talk about the affordability of premature death and heart disease, missed work, missed sports practices, missed school … [which also has] social and emotional costs,” she noted. “We have communities who are essentially living with generational trauma because they experience disproportionate health impacts.”
The board is expected to vote on the finalized rule language this October.
Its decision could inform state-level regulations taking shape in California and Maryland. Both are actively considering clean-heater rules, while eight other states have committed to exploring zero-emissions standards in the future: Connecticut, Hawaii, Massachusetts, New York, Oregon, Pennsylvania, Rhode Island, and Washington. Last year, after a flood of opposition speculated to be fake, Southern California’s air district decided to hold off on adopting similar zero-emissions appliance rules of its own.
“The Bay Area will set an example for other air districts,” said Joseph Wachunas, senior project manager at decarbonization nonprofit New Buildings Institute.
According to the district’s analysis, heat-pump water heater installation costs $7,000 on average, or twice as much as putting in gas equipment. Local and state incentives are available to help close the $3,500 gap — or, in some cases, install zero-emissions water heaters for free.
For a substantial minority of households, switching to a heat-pump water heater could still be cost-prohibitive for myriad reasons. These appliances are typically larger than gas options and may not fit in tight spaces. Because heat-pump devices harvest thermal energy from the air, they typically need at least 700 cubic feet, which not all properties are ready to accommodate. And while evidence suggests that most households can electrify on 100 amps, a fraction might need an electrical service upgrade that could add $2,000 to $30,000 to the installation cost.
When these circumstances make heat-pump water heaters unaffordable, the air district’s staff members have proposed making exceptions.
“If you have to move a wall, you’re going to be able to get that exemption. If you have to upgrade your panel, you’re going to get that exemption,” said Greg Nudd, deputy executive officer of policy at the district. After installing a gas water heater, “you would have the lifetime of that piece of equipment to address those problems.”
The tech is also becoming more accessible. “When we started this process several years ago, there were no 120-volt heat-pump water heaters,” said board director John Gioia, supervisor of Contra Costa County. “There are now two on the market” that plug into standard outlets.
Clean air advocates called the exemption approach reasonable.
“The Bay Area Air District has done a good job at addressing the real-world concerns that people have brought up,” said Tony Sirna, deputy policy director for buildings at climate advocacy group Evergreen Action. “We want to reduce pollution, but we know that that’s not going to be successful if the rule doesn’t work for the people of the Bay Area.”
More than 60% of homes in the region will still be required to adhere to the standard, “which will drastically reduce pollution and put us on track to transitioning to clean air and clean energy,” Sirna said.
Even though some regulators would suspend the appliance rules outright, Sirna said he’s confident that the majority will carry the water-heater standard across the finish line this fall. “The flexibility exemptions that are being proposed,” he noted, “really address all the concerns that were being raised.”
Policies to transition buildings off polluting fossil gas are holding up in federal courts across the U.S. That’s a big win for local governments looking to spur electrification, given that these types of regulations suffered a major setback just a few years ago.
In 2023, the 9th U.S. Circuit Court of Appeals struck down Berkeley, California’s pioneering ban on gas hookups in new buildings. A panel of three federal judges sided with the California Restaurant Association in its assertion that the ordinance conflicted with the federal Energy Policy and Conservation Act, a 1975 law that prevents cities and states from setting appliance efficiency standards that differ from those of the U.S. government.
Even at the time, the decision was controversial. Eleven other 9th Circuit judges signed on to a dissenting opinion — an unusual move — to inoculate judges of future suits against, in their view, the case’s flawed reasoning.
Indeed, building developers, appliance manufacturers, and others pushing for fossil fuels — including the Trump administration — have since used the same legal argument in 13 other lawsuits against cities, counties, states, and an air district. These cases — in California, Colorado, Illinois, Maryland, New Jersey, New York, Washington state, and Washington, D.C. — challenge local rules that require all-electric new buildings, mandate existing structures to taper energy consumption or emissions over time, or set zero-emissions appliance standards in an effort to reduce air pollution.
“Industry has really gone on a spree,” said Daniel Carpenter-Gold, senior staff attorney for climate justice at the Public Health Law Center, a nonprofit affiliate of the Mitchell Hamline School of Law in St. Paul, Minnesota. Most of the suits, he noted, are being argued by one of two law firms: Reichman Jorgensen Lehman & Feldberg, which spearheaded the Berkeley case, or Baker Botts. “A lot of the language is verbatim from one case to the next.”
In all six post-Berkeley cases for which federal judges have weighed the EPCA argument, they’ve rejected it and upheld pro-electrification standards.
“There is a clear consensus among the courts that have ruled on the issue that the 9th Circuit’s decision in [Califo
Last month, U.S. district court judges handed down victories to local jurisdictions in three cases — two in Maryland and one in Washington, D.C.
The rulings “have sent a clear message: states and local governments can be confident to move forward with the range of decarbonization and electrification programs,” Tim Oberleiton, senior attorney for the nonprofit environmental law group Earthjustice, said in a statement.
These policies are crucial to curb carbon pollution from buildings, which accounts for about one-third of U.S. emissions, especially as the Trump administration works to prop up fossil fuels. Efficient electric appliances also improve local air quality, can provide greater comfort, and typically lower energy bills.
In the Berkeley case, the legal question centered on whether the city, by prohibiting gas infrastructure, can essentially dial down gas appliances’ energy use to zero, or whether that power rests with the federal government, because it sets appliance efficiency standards.
After the three-judge panel decided the latter, Judge Michelle Friedland argued in the dissenting opinion that the U.S. government’s authority to set energy conservation standards doesn’t preempt states from choosing the type of energy, and thus appliances, they use.
“EPCA’s preemption provision guarantees uniform appliance efficiency standards. It does not create a consumer right to use any covered appliance,” she wrote.
Federal judges continue to poke holes in the notion that EPCA precludes pro-electrification policies.
Judge Paula Xinis of the District of Maryland in National Association of Home Builders v. Montgomery County, which challenges an electric buildings law, pointed out that EPCA’s requirement that appliances be tested for their energy use prior to sale would be impossible if “energy use” were interpreted the way plaintiffs claimed: at the site of installation.
Judge Percy Anderson of the Central District of California in Rinnai America Corp. v. South Coast Air Quality Management District, a case against regulators’ zero-emissions standards for water heaters, wrote that “there is no reason to believe that Congress ever intended or even contemplated that the EPCA would preempt emission regulations designed to combat air pollution.”
And Judge Ana Reyes of the District of Columbia in National Association of Home Builders v. District of Columbia took a gastronomical approach to demonstrate EPCA’s narrow scope.
“Consider a hypothetical federal law that defines the point of use as restaurants, sets a national tortilla chips-to-salsa ratio of 2 grams for every 3 grams, and preempts states from regulating that ratio,” she wrote in her decision. “No one would say that because Congress set a chips-to-salsa ratio, it intended to ensure that every restaurant has a right to sell chips and salsa. And a state regulation prohibiting French restaurants from serving chips and salsa would not be preempted because it would operate in an entirely different regulatory space, preserving French cuisine — one that happens also to affect chips and salsa availability.”
In other words, because EPCA was only ever meant to ensure appliances adhered to the same energy-efficiency standards (akin to chips-and-salsa ratios) across states, it can’t nullify local climate and air-quality laws that may limit the use of those appliances.
Industry opponents paint local electrification policies as anti-consumer choice. But these are public health regulations meant to protect homebuyers and renters from appliance decisions often made by builders and landlords, according to Carpenter-Gold.
“These governments are just trying to help people live healthier lives,” he said.
Five of six cases ruled on their merits have now been appealed to the higher circuit courts, along with a case in Washington state that was dismissed on grounds unrelated to how EPCA is interpreted. One suit brought by the Trump administration’s Department of Justice was voluntarily dropped after the two small California towns it concerned amended their building standards to nix electrification requirements. Five remaining cases are still pending in the district courts.
The Supreme Court, which hears few cases in general, is unlikely to take up any of the EPCA-based lawsuits, according to Carpenter-Gold. He doubts that the justices will consider it worth their time, given the consensus in the district courts, he added.
“The weight of authority is clearly on one side.”
In January, Lerned Zint’s gas water heater croaked.
It would have been an inconvenience for anyone. For Zint, a Spanish-speaking mother who runs Corazones Daycare out of her San Francisco home, it was an emergency.
Zint takes care of about 10 children, 6 months to 4 years old. Their sticky fingers and stinky messes make hot water essential.
Thankfully, Zint didn’t have to wait long for a solution. Within days, the San Francisco Environment Department worked with a partner contractor to install a shiny new water heater in her home at no cost — and it runs on an electric heat pump, not gas.
Zint is the first participant in the city’s new electrification pilot program for child care centers run out of residential homes. Led by the Environment Department and funded by a TECH Clean California Quick Start Grant, the $300,000 program will swap gas water heaters for heat-pump options at up to 30 facilities. The initiative could be a model for other communities around the country looking to decarbonize their buildings and thereby give their children access to cleaner, safer air.
Electric upgrades can’t come soon enough to the disadvantaged communities the new initiative is prioritizing.
Zint lives in the Excelsior neighborhood, which not only has the highest number of children up to 5 years old in the city but also carries “a disproportionate share of environmental burdens from high pollution,” Supervisor Chyanne Chen, who represents the neighborhood, said during a March press event. This initiative improves indoor air quality, reduces emissions, lowers energy costs, and modernizes child care facilities, she noted. That “means healthier providers, healthier children, and a healthier neighborhood.”
By their nature, appliances that burn material — fossil fuels, charcoal, wood — spew toxic compounds that chronically harm health. The pollutants, from oxides of nitrogen to carbon monoxide, can damage nerves, increase asthma symptoms, heighten the risk of stroke and dementia — and even kill.
For children, whose lungs and immune systems are still developing, the health impacts of gas-appliance pollution are particularly grave. Gas stoves, which often aren’t required to vent outside, are the biggest threat: They can increase any person’s chances of getting cancer, but the risk for kids is nearly double that for adults. Water heaters, furnaces, and dryers fueled by gas pose risks, too.
Low Income Investment Fund, a national community-development financial organization that is helping the Environment Department implement the program, has recently become acutely aware of how ubiquitous these dangers are. “Most of these child care programs, they’re running their stoves more than half of the day, because they cook for the children,” Katherine Perez, a LIIF program officer who is aiding Zint with electrification, told Canary Media.
To date, the Environment Department has installed five heat-pump water heaters under the program and aims to complete all 30 by the end of the year.
After that, LIIF will incorporate learnings from the pilot to update its existing Child Care Facilities Fund, which can go toward renovations and repairs. The grant program awards up to $100,000 per home child care business, with the requirement of a 20% copay. This funding has come to the aid of providers when their appliances break down, and historically has been used to replace gas equipment with gas equipment.
But the nonprofit has started to encourage participants to replace their broken appliances with electric options across the board.
“We haven’t formalized our policies in regards to electric appliances for homes,” said Kimberly Thai, a LIIF program manager. “But it is our practice to fund appliances that improve indoor air quality.”
About 500 child care programs across San Francisco are eligible for LIIF’s facilities grants.
As part of the electrification pilot, the Environment Department is also providing training to the local workforce. Up to 10 San Francisco contractors will gain experience installing heat-pump water heaters in child care facilities, which require more creative scheduling than typical homes, according to Benny Zank, the department’s building decarbonization coordinator and the lead for the pilot. Those skills will equip them to serve many more homes in the future.
San Francisco will need electrification-savvy contractors to fulfill its public health and climate ambitions. Bay Area air quality regulators are finalizing the details on landmark rules that will phase out the sale of new residential gas water heaters starting in 2027 and gas furnaces in 2029.
In just 14 years, the city plans to achieve net-zero-emissions. As of 2022, buildings still accounted for nearly half of its climate pollution.
For her part, Zint is thrilled with her heat-pump water heater and plans to fully electrify her home, she said, as Zank translated. LIIF is assisting her with that transition, which entails replacing a gas-fired furnace, stove, and clothes dryer, in the coming weeks, Perez said.
The appliances create a safer environment for the children, Zint noted. “Especially, they reduce the risk of carbon monoxide poisoning, which is really important when taking care of kids.”
Word of Zint’s electrifying update is spreading. “A bunch of other child care providers have reached out to me,” she said, asking about how they can ditch gas appliances, too.
“We make sure to share all this information with each other,” she added. “We’re a real community who all care about the health and safety of the kids that we take care of.”
Blake Herrschaft has plans to fully electrify his Tahoe City, California, home, which runs on a slim 100 amps of electrical service. But even with a hot tub, in an area that sees an average of 15 feet of snow per year and temperatures that dip into the single digits, his house won’t need an expensive service upgrade. “I’ve done the calculations,” he said.
An architectural engineer, Herrschaft manages building electrification programs at Peninsula Clean Energy, a public power agency — also known as a community choice aggregator — in the San Francisco Bay Area. He says he frequently hears people claim at regulatory meetings that electrification rules will force households to undergo electrical service upgrades that many can’t afford; these upgrades can range from $2,000 to $30,000 in the Golden State, according to a 2022 analysis.
But now, Herrschaft and his colleagues have firsthand evidence from a handful of residences scattered across PCE’s territory that homes can be electrified without upsizing their electrical service. Often, 100 amps are more than enough.
In 2024, PCE ran a nine-home electrification pilot for low-income customers in San Mateo County, California, which included five households with 100-amp panels. At no cost to recipients, the agency replaced their fossil-gas and propane appliances with efficient electric ones, using the power the homes already had. Plus, PCE didn’t need to install specialized equipment, such as smart panels, to manage the flow of electricity. After the retrofits, most households saw significant savings on their monthly energy bills.
The results of the pilot program, published in January, demonstrate that home electrification can deliver climate, health, and financial benefits without massive infrastructure costs.
“When you’re working with limited funds, being able to electrify without a panel upgrade is great,” said Cavan Merski, senior data analyst at Pecan Street, a nonprofit research organization that was not involved in PCE’s analysis. It’s “awesome to … see a case study of this working in the wild.”
The findings are especially relevant now as air-quality regulators for the Bay Area, home to more than 7 million, negotiate the details of groundbreaking rules to phase out the sale of gas water heaters and fast-track the switch to heat-pump versions. Over the coming months, officials will weigh final drafts of the regulations and could vote on them as early as October. The rules will take effect next year.
“There’s rampant disinformation going on ahead of the air district rules,” said Pamela Leonard, deputy director of marketing and communications at Silicon Valley Clean Energy, a community choice aggregator in Santa Clara County, California, that partnered with PCE on the pilot. “So we’re really trying to get the word out … In most cases, homes can go all-electric on 100 amps.”
The case study builds on prior evidence that households typically have plenty of play in their existing power supply. In early 2024, PCE found that across more than 700 all-electric single-family homes it analyzed in its service territory, 99 percent of them never drew more than 100 amps of electric current all year. The most common peak demand was 29 amps, less than a third of a home’s capacity.
Still, the pilot’s results come from a small sample size in one county in a temperate region. They may not apply in more extreme climates, according to Scott Hinson, chief technology officer at Pecan Street. Whether a home will typically need electrical upgrades before switching to all-electric appliances and vehicles “is going to be regionally dependent,” he noted.
Households in moderate climes can more easily swap in heat pumps without needing to grapple with weatherization or electrical service upgrades to lower their homes’ energy demands. But even in areas with less hospitable temperatures, the shift is still possible, as demonstrated by the retrofits of a few 100-amp homes in Calgary, Canada.
As Rahul Young, head of community engagement for the electrification advocacy nonprofit Rewiring America, noted of PCE’s pilot, “There will be real value in having … this study replicated in other parts of the country.”
Herrschaft has heard some electrification opponents peg the cost of fully electrifying homes in the $100,000 range, but PCE’s contractor was able to replace fossil fuel–fired furnaces, water heaters, stoves, and clothes dryers with, as needed, heat pumps, heat-pump water heaters, induction stoves, and electric dryers at an average cost to PCE of $35,000 per residence. Like-for-like replacements would have been about $25,000, according to Herrschaft. (Electric-vehicle chargers, which can be part of all-electric homes, were outside the scope of the pilot.)
PCE was able to analyze six households for bill savings; ditching gas cut their energy bills by 20 percent on average. Five saved an estimated $24 to $1,068 per year. The bills for one home rose slightly, but its owners would have seen savings had they chosen a beneficial rate from Pacific Gas & Electric, according to Herrschaft.
Another important takeaway from the pilot: If the retrofitted homes, which were spread across the county, had been in the same neighborhood, their greater electrical demand would not have hurt the grid. Even if they were receiving power from the same distribution transformer, their cumulative increased load would have been “mild” — the equivalent of adding about two hair dryers on full blast, Herrschaft said.
“Home electrification — the home appliances in particular — just isn’t an issue when it comes to the grid in California and nearly every other state,” he said, given their shared climate zones. “I feel confident about that from the [electrical] panel all the way to the transmission line.”
In addition to misconceptions around household electrical capacity, Herrschaft hopes to address the separate issue of how contractors determine how much power a home needs.
To decide the necessary amps, installers do calculations written in the National Electrical Code, which sets safety standards. However, many professionals use methods that overestimate a home’s peak electrical load, Herrschaft said. A major focus for PCE this year will be educating them on other approaches, which are much less likely to trigger an unnecessary service upgrade.
Since finishing the pilot, both PCE and Silicon Valley Clean Energy have launched programs to electrify hundreds of homes in their service territories in the next two years, at no cost for low-income households. PCE has done dozens of home retrofits, and 95% haven’t required service upgrades, Herrschaft noted.
“We found it’s easy to electrify on 100 amps.”
Silicon Valley–based startup Lunar Energy has spent the last six years building a business for its smart home batteries and the virtual power plant software that can orchestrate those systems to support the grid at large. Now, it has a massive new pot of cash to expand that effort, as utilities and state policymakers look to leverage such technologies to help meet soaring power demand.
On Wednesday, Lunar Energy unveiled $232 million in new funding. The investment is made up of a $102 million Series D round led by B Capital and Prelude Ventures, which closed in recent months, and a previously unannounced Series C financing of $130 million led by Activate Capital in 2024.
Added to the $300 million round Lunar Energy raised in 2022 from investors including U.S. residential solar leader Sunrun and South Korean battery giant SK Group, that brings the total investment to just over half a billion dollars. Lunar Energy CEO Kunal Girotra, who previously led Tesla’s residential energy business, declined to share the startup’s revenues or expectations for profitability. But he did say, “This capital helps us, in a big way, in achieving our goals of not having to raise ever again.”
Much of the new money will go toward expanding Lunar Energy’s manufacturing capacity for its home battery and energy-control hardware, he said. The company produces its equipment in California, Georgia, and Washington state and has installed it in about 2,000 homes and businesses in California. The firm plans to increase its manufacturing capacity from about 10,000 battery systems per year today to 20,000 per year by the end of 2026 and to 100,000 per year by the end of 2028, Girotra said.
Home batteries are a competitive market, with Enphase, FranklinWH, Generac, LG, SolarEdge, Sonnen, market leader Tesla, and other companies all vying for customers. Lunar Energy’s systems are priced on the higher end of the spectrum, with typical installation costs coming in at about a 10% premium to Tesla’s Powerwall batteries, Girotra said.
But Lunar Energy’s system comes with a bunch of integrated hardware that differentiates it from many other home batteries, Girotra said. It includes modular batteries that can provide 15 kilowatt-hours to 30 kilowatt-hours of storage, allowing consumers to build a system that is rightsized for their homes. Lunar Energy also incorporates inverters and optimizers to efficiently convert power from rooftop solar panels into stored electricity. And its digitally controllable circuit breakers mean that homeowners can use a smartphone app to control which household circuits solar and battery power flow to; this can be useful for emergency backup or to save on utility bills on a daily basis.
“With the other companies, you have to add other components to them to get an apples-to-apples comparison,” Girotra said. “And we’ll be closing the [price] gap with Tesla very soon.”
Then there’s Lunar Energy’s virtual power plant software, which allows the company to control home batteries, EV chargers, and other power-using appliances. The VPP technology essentially lets these distributed energy resources act in tandem to function like a traditional power plant.
The company first began its foray into VPPs in 2022, when it acquired the U.K.-based startup Moixa, which managed batteries, smart thermostats, and other controllable devices in Japan and the U.K. That software now controls close to 150,000 devices in homes, including those of Sunrun customers participating in VPP programs in California, Hawaii, New England, and Puerto Rico, Girotra said.
Lunar Energy plans to also expand its VPP services this year, Girotra said, partnering with several of California’s community choice aggregators and retail electricity providers working in competitive markets. By year’s end, the company expects to have customers in several more states, such as Texas, which has become a major target for VPPs from major energy retailers, smart-thermostat providers, solar-battery installers, and manufacturers of stand-alone backup batteries.
Clean energy advocates and experts expect that VPPs are the path to making rooftop solar and battery systems successful in the Trump era, as rooftop solar alone becomes an increasingly tough proposition in many markets.
The megalaw passed by Republicans in Congress last year ended decades-old tax credits for homeowners installing clean energy systems, tamping down growth expectations for the rooftop solar industry, although third-party installers can still use tax credits for some time. Meanwhile, California’s 2023 cuts to rooftop solar incentives have led to a steep drop-off in installations in the country’s leading market.
But pairing solar with batteries boosts homeowners’ energy bill savings — a significant motivator for consumers as utility rates spike across much of the country, including in California.
Many states are looking to use VPPs to avoid investing in costly traditional power plants to meet skyrocketing power demand — a surge driven by data centers, factories, and the rapid electrification of buildings and vehicles. VPPs provided hundreds of megawatts of grid relief last summer in California, Puerto Rico, and New England, and states including Colorado, Illinois, Maryland, Minnesota, North Carolina, Utah, and Virginia have passed laws or are pursuing regulatory action to expand their use.
Lunar Energy isn’t the only company raising money on the prospects of VPPs. Texas-based startup Base Power raised $1 billion last year to ramp up manufacturing capacity for batteries it installs at low or no cost in homes and businesses. The company then leverages these systems into a VPP that it can use to earn a profit in the Lone Star State’s competitive energy markets.
And San Francisco–based startup Span — which makes smart electrical panels that let homeowners, businesses, and utilities digitally control power flows between solar installations, batteries, EV chargers, and other building loads — is in the midst of raising a $176 million investment round.
Data from the subset of Lunar Energy systems in VPPs under its own control shows that customers earn an average of $464 per year by participating in those programs. That’s on top of the $338 that Lunar Energy customers save on average each year by fine-tuning their home energy systems to consume grid power when it’s at its cheapest and most plentiful.
“We see behind-the-meter storage with software as a key element for solving the power-demand problem,” Girotra said. “If you give people more of these devices and you let them control them, you suddenly have a grid that doesn’t have to build the 5x — or 5,000x — capacity that we’re asking for in a short amount of time.”
American factories use lots of hot water and steam to produce everyday goods like milk, cereal, beer, toilet paper, and bleach. Most facilities burn fossil fuels to get that heat, emitting huge amounts of planet-warming pollution in the process.
Switching to electricity could significantly and immediately slash those emissions in many places, according to a new report by The 2035 Initiative at the University of California, Santa Barbara. Electric versions of industrial boilers, ovens, and dryers are already available, and newer models promise to boost factories’ efficiency and curb energy costs even further.
“We can make progress today with the technologies we have,” said Leah Stokes, an associate professor of environmental politics at UC Santa Barbara and one of the principal researchers for the report.
But electrifying factories is a far more complex undertaking than, say, trading a gasoline-fueled car for a battery-powered vehicle. The process involves making many head-scratching calculations and engineering choices, which is partly why companies have been slow to adopt electrified equipment. Stokes said the report aims to demystify some of those decisions so that U.S. manufacturers can start tackling their heat-related emissions.
“We wanted to answer this question [of] where is it most technologically and economically feasible to electrify industrial process heat today?” she said during a Dec. 16 webinar. The study also drives home the need to rapidly build more clean energy to power all that new demand.
Researchers simulated what it would look like to electrify nearly 800 large industrial plants within three sectors: food and beverage, chemicals, and pulp and paper manufacturing. These facilities use relatively low- and medium-temperature process heat — unlike scorching cement kilns or steel mills — and together account for about 40% of CO2 emissions from the U.S. industrial sector.
The UC Santa Barbara team modeled four scenarios for electrifying each of these plants, beginning with “drop-in electrification” — using electrode boilers and electric ovens and dryers — and progressively expanding efforts to include major energy-efficiency upgrades and advanced technologies, like high-temperature heat pumps from the startups AtmosZero and Skyven.
At the most ambitious level, electrifying these factories could slash the country’s emissions by 1.3 billion metric tons of CO2 equivalent by 2050, while also providing $475 billion in public health benefits by improving air quality, researchers found. The figures assume the U.S. electric grid will be running almost entirely on clean energy by mid-century, up from 40% today.
“This one space actually can contribute an outsize share of the global [climate] mitigation we need to keep our global temperature rise in check,” said Eric Masanet, a sustainability science professor at UC Santa Barbara who led the study with Stokes.
In certain cases, it can cost manufacturers about the same amount of money to get heat from electric systems rather than gas-fired ones, he said. That includes processes that use less intensive heat, like ethanol and plastics production, since heat pumps work more efficiently at lower temperatures. It’s also true for factories located in places where fossil gas is relatively expensive. In Delaware, New York, and Washington state, for example, companies enjoy a more favorable “spark gap” — the difference between electricity and gas utility costs for the same unit of energy delivered.
Just as cost varies by facility, so does the potential for emissions reductions. The largest CO2 savings are in states with low-carbon grids, like Washington, California, and Vermont. In places with dirtier grids, switching to electricity can actually increase emissions in the near term if utilities meet that demand with gas- and coal-fired power plants. But even in those areas, researchers expect that electric equipment installed today will still cut pollution over time as the grid gets cleaner.
For that to happen, factories will need a lot more wind, solar, geothermal, and other carbon-free sources to come online. Electrifying the processes included in the study could require 158 to 301 terawatt-hours of additional power, or about 16% to 30% of the electricity currently consumed by industry. That new load would add to the soaring demand that’s already coming from data centers and electrified homes and vehicles.
“If we want to bring the type of electricity to the industrial sector that it’s going to need … we’re going to need to improve the grid,” Sen. Sheldon Whitehouse (D-R.I.) said during the webinar, adding that streamlining the federal permitting process would hasten the build-out of new transmission and clean energy projects.
The UC Santa Barbara team outlined other policies that could accelerate industrial decarbonization, particularly for the facilities where electrification is more expensive than burning fossil fuels. A 30% federal investment tax credit or state-level grants would offset the up-front costs of investment in new equipment. A “clean heat” production tax credit would lower operating costs, as would reducing industrial electricity rates.
Stokes noted that, even without such incentives, cleaning up manufacturing would take a minimal toll on consumers’ wallets. Take breweries, which use heat for mashing, boiling, and fermenting ingredients and sterilizing containers. “Our modeling shows that even if electrification doubles the cost of energy as an input to beer production, it’s 1 cent per beer,” she said.
“This is something that we can do, and it’s super important,” she added.
LED light bulbs and TVs. Front-loading washing machines. Energy-lean refrigerators. All were once nascent technologies that needed a push to become mainstream.
Now, California is trying to add über-efficient plug-in heat pumps and battery-equipped induction stoves to that list.
It’s a tall order; today these innovative products cost thousands of dollars and aren’t widely available in stores, unlike their more polluting, less efficient counterparts that burn fossil fuels or use electric-resistance coils to generate heat.
But late last month, the California Public Utilities Commission signed off on a plan to spend $115 million over the next six years to develop and drive demand for the fossil-fuel-free equipment — a first-of-its-kind investment for the state. These appliances, which plug into standard 120-volt wall outlets, don’t need professional installers or the expensive electrical upgrades sometimes required for conventional whole-home heat pumps or 240-volt induction stoves. That ease of installation makes them crucial tools in California’s quest to decarbonize its economy by 2045.
The initiatives to boost plug-in heat pumps and induction stoves are explicitly meant to help put electrification within reach of renters, low-income households, and frontline communities that have suffered disproportionate environmental harms and disinvestment.
“This is an incredible example of what it looks like to center [these] communities,” said Feby Boediarto, energy justice manager of the statewide grassroots coalition California Environmental Justice Alliance. “It’s extremely important to think about the long-term vision of electrification for all homes, especially those who’ve been heavily burdened by pollution. And these initiatives are stepping stones to that vision.”
California’s move comes as the federal government seeks to dismantle efficiency programs and policies even as U.S. energy costs surge. The Trump administration is eliminating federal tax credits for energy-saving home upgrades at the end of the year. Meanwhile, a Republican-sponsored bill making its way through Congress would make energy-conservation standards for appliances more difficult to create — and easier to undo.
California’s initiatives, developed by the commission’s California Market Transformation Administrator (CalMTA) program, are multipronged. They take aim at the whole supply chain, from tech development to distribution to consumer education, said Lynette Curthoys, who leads CalMTA. The initial investment by the world’s fourth-largest economy is expected to deliver about $1 billion in benefits, including avoided electric and gas infrastructure costs, through 2045.
One major goal is to bring the price tag of battery-powered induction stoves way down. Current products from startups Copper and Impulse start at about $6,000 and $7,000, respectively — far more than top-rated gas ranges, which customers can snag for less than $1,000.
As for the heat-pump plan, an essential element will be encouraging manufacturers to develop products for the California market in particular.
One quirk they have to deal with is that windows in the Golden State commonly slide open from side to side or by swinging outward. The most efficient window-unit heat pumps available on the market today, by contrast, are designed to fit windows that open up and down.
To spark better-suited designs, the state intends to create competitions for manufacturers — a strategy that’s worked before.
In 2021, the New York City Housing Authority, along with the New York Power Authority and the New York State Energy Research and Development Authority, issued the Clean Heat for All Challenge. The competition pushed manufacturers to produce a window heat pump that could handle the region’s chilly winters, with a promise to purchase 24,000 units for public housing. San Francisco-based startup Gradient and Guangdong, China-based manufacturer Midea made the requisite technological leaps for New York. The state later bumped up its heat-pump order to 30,000 units.
CalMTA, in a similar vein, plans to aggregate demand from multifamily-building owners to entice manufacturers to participate in heat-pump and induction tech challenges. The one for heat pumps is expected to launch in mid-2027. Curthoys said the induction contest will come later, after the administrator makes tweaks required by regulators to the clean-cooking initiative.
Gradient has “been working closely with CalMTA over the past year to support this plan,” said Vince Romanin, the company’s founder and chief technology officer. “We’re thrilled to see a clear, coordinated strategy that benefits both manufacturers and consumers.”
Copper plans to participate in the challenge for battery-equipped induction stoves, said Sam Calisch, founder and CEO at the startup. “Copper is now significantly scaling its manufacturing and distribution to meet demand,” and CalMTA’s initiative is “a key element of this effort,” he noted.
The administrator also aims to incentivize appliance retailers to drive adoption.
“We found that a key influencer of buying decisions are actually the sales associates,” Curthoys said. “Some of our interventions will focus on training sales associates to understand the benefits of induction and encourage customers to buy it.”
CalMTA is running a pilot that started the week of Black Friday and gives sales associates “a small bonus” for every induction stove they sell, Curthoys said. This tactic, one of many, played a role in the successful market-transformation campaign for front-loading clothes washers, the administrator reports: In the late 1990s, the Northwest Energy Efficiency Alliance provided retail employees with a typical bonus of $10 for each unit they sold. The alliance’s efforts helped drive these efficient appliances from just 2% of household washer sales in the U.S. in 1993 to 10% in 2000. In 2020, that market share had bloomed to 53%.
CalMTA’s hope is for affordable versions of plug-in heat pumps and induction stoves to be widely available for purchase by 2030.
More appliances could follow. The administrator is working on plans to spur demand for energy-efficient technologies such as heat-pump water heaters, as well as windows and rooftop heat pumps for commercial buildings, Curthoys said.
Ultimately, the state’s investment could benefit households around the country, she noted. “When these [products] become available, they will be suitable for other markets — well beyond California.”
Want to claim thousands of dollars in federal tax credits for electrification upgrades that slash emissions, reduce air pollution, and enhance the comfort of your home? You have just over a month left to get them installed.
In July, Republicans in Congress voted to end two key home-energy tax credits: the Energy Efficient Home Improvement Credit (25C), worth up to $2,000 for updates like an über-efficient heat pump; and the Residential Clean Energy Credit (25D), which takes 30% of the cost of rooftop solar and other clean-energy installations off your federal tax bill. To qualify for the credits, projects have to be done by Dec. 31.
Ditching our fossil-fuel equipment for electric options is an opportunity to land a punch in the climate fight. More than 40% of U.S. energy-related emissions stem from how we heat, cool, and power our homes and fuel our cars, according to the nonprofit Rewiring America. Not to mention, clean alternatives are often cheaper to run than dirty-energy versions.
Still, electrifying our lives can be hard. All-electric home upgrades are often big, complex infrastructure projects. Upfront costs can be steep.
But appliances, like cars, come in a wide range of models with different features and a diversity of price points.
It’s worth spending some time to think through the options — after all, doing so could save you tens of thousands of dollars by avoiding an unnecessary electrical-service upgrade or an overpowered heat pump. But to lock in the federal discounts, you’ll need to get up to speed quickly.
That’s where Canary Media can help. I’ve pulled the most relevant stories from the archives to get you prepped on your home retrofit. Dive in anywhere you like.
Why electrify?
Prep Work
How to Electrify Your Home
Get a Heat-Pump Water Heater
Electrify Your Cooking
Get a Heat-Pump Clother Dryer
Get a Charger for Your EV
Electrify Your Landscape Maintenance
Bank Energy With Home Batteries
Need Inspiration?
Coaching & Tools
The Shortcut
Here’s a last piece of advice to help you fast-track electrification projects so that you can get those federal tax credits. Journalist Justin Gerdes, who writes the wonderfully researched newsletter Quitting Carbon, says this is his No. 1 pointer for anyone planning an all-electric home retrofit:
“Search for a specialist electrification contractor you can trust.”
To make that process easier, Rewiring America and the BetterHVAC Alliance launched the National Quality Contractor Network in September. The associated directory is full of certified installers who know and love heat pumps, heat-pump water heaters, insulation, EV chargers, and more.
Gerdes’ advice is golden in a world with or without federal tax breaks. The U.S. government continues to fund state-run home energy rebates for lower-income households. And you can still find a bonanza of state, local, and utility incentives to break up with fossil fuels.
It’s also still early in the adoption curve for many of these electrified technologies. As they become more commonplace, we could see prices drop.
So while now is a great time to invest in electric appliances and reap the benefits of a clean-energy dream home, 2026 — and the years to come — will be too.
New York looks to be waffling on its commitment to ditch fossil fuels in new buildings.
In July, the state became the first in the nation to require all-electric appliances for most new construction. The rules, set to take effect on Dec. 31, would help New York reach its climate goals while slashing energy and health costs for its residents, according to several analyses. Modeling by the state’s grid operator shows that the grid can handle the added demand from electrifying new buildings.
But last week, 19 state assemblymembers — all Democrats — sent a letter to Gov. Kathy Hochul arguing that the all-electric building standard threatens affordability and the grid isn’t ready.
“While I share the long-term goal of decarbonizing our state, I believe the imminent requirement to mandate all-electric new buildings must be paused pending thorough reassessment of grid reliability, cost impacts, and risk mitigation,” wrote Assemblymember William Conrad, who led the petition.
Delaying implementation would buck a timeline set by the 2023 All-Electric Buildings Act, the law that required the state to put together rules for zero-emissions construction.
Hochul, a Democrat, said at a recent press event that she would seriously consider the assemblymembers’ request. “I’m going to look at this with a very realistic approach and do what I can because my No. 1 focus is affordability right now, because New Yorkers are suffering too much.”
“This is purely a political maneuver,” said Michael Hernandez, New York policy director at electrification advocacy nonprofit Rewiring America. “These Democrats” — many in districts considered flippable — “are working with fossil-fuel interests and building developers to try to delay the All-Electric Buildings Act, … a state law that was enacted through the democratic process.”
For instance, National Fuel, which supplies gas to about 500,000 households in western New York, has funded a lobbying campaign against bans on the fuel.
For her part, Hochul has a “troubling track record on climate,” said Elizabeth Moran, New York policy advocate at nonprofit Earthjustice. The governor has paused or indefinitely delayed initiatives she once championed, from congestion pricing and electric school buses to the signature policy to implement the state’s 2019 climate law: an emissions-pricing program known as cap-and-invest.
“We are seeing tremendous misinformation from the fossil-fuel industry,” Moran said. “The governor should not cave to the fearmongering of an industry that is only interested in its own profits.”
Last month, a judge found the state violated the law when it slammed the brakes on the cap-and-invest program — a case that could serve as a template should Hochul issue an executive order to delay implementing the All-Electric Buildings Act.
Hernandez pointed out that the all-electric law proceeds in a phased way, initially affecting new structures up to seven stories tall and, for commercial and industrial buildings, up to 100,000 square feet. Bigger buildings won’t be subject to the requirement until 2029.
Moreover, the law exempts projects if the grid can’t accommodate them within a reasonable window of time. The Department of Public Service has proposed that builders can use fossil-fuel systems if utility upgrades for all-electric construction would tack on 18 months or more to the development process, compared with a mixed-fuel project.
Several analyses show that all-electric buildings are more affordable than those with both electricity and gas or other fossil fuels. Building all-electric homes in New York may cost more up-front, but a 2024 state report shows the payback period is 10 years or less, thanks to the benefits of superefficient electric appliances, like heat pumps and heat-pump water heaters. Over 30 years, households will save on average about $5,000, the report finds.
A 2025 study by climate-policy think tank Switchbox that considers mortgage payments, gas hookup costs, and fuel costs, as well as the loss of federal electrification incentives, found even bigger savings: an average of $12,050 over 15 years for households living in newly built, all-electric single-family homes instead of ones heated with gas or propane.
“The Building Code Council, by law, can only update the building code if it’s cost-effective,” Hernandez said.
In their letter, the assemblymembers expressed concern about the grid’s ability to handle electrification of new buildings, citing reliability assessments from the state’s grid operator, the New York Independent System Operator (NYISO).
However, that fear is “based on a limited methodology that is not designed to identify blackout risks … and is based on a variety of extreme assumptions for which NYISO does not present factual support,” said Michael Lenoff, senior attorney at Earthjustice. NYISO’s projections “don’t justify delaying the All-Electric Buildings Act.”
NYISO uses two approaches to determine if it will be able to procure enough power for the grid in the coming years, Lenoff explained. One approach ignores common strategies to balance supply and demand, like utilizing backup systems called operating reserves, recruiting customers to voluntarily use less energy, and tapping emergency assistance from neighboring states. The method also assumes delays in major transmission projects, like the Champlain Hudson Power Express, even though NYISO reports that the transmission line “is nearing completion” and is scheduled to enter service in May of 2026.
As one might expect, this first approach paints a pessimistic picture, spurring NYISO to call for procuring more resources to supply power.
Under NYISO’s second approach — the industry standard to determine adequate power supply — the operator in fact finds that it will have plenty of planned generation resources to meet demand through 2034, even if the All-Electric Buildings Act is fully implemented. The blackout risk generally considered acceptable, striking a balance between greater security and higher costs to customers, is one event in 10 years. NYISO estimates that its risk in 2034 will be about one blackout in 20 years — twice as protective as the norm, Lenoff said. It’s even more protective in the years leading up to that.
“Procuring resources when industry-standard reliability metrics indicate the system is already overprotected risks gold-plating the system at consumers’ expense,” Lenoff said.
In its 2025 Power Trends report, which the letter directly references, NYISO also determined that building electrification is not a concern in the short term; rather, energy-hungry customers — namely hyperscalers and cryptocurrency miners — are.
“If the lawmakers are concerned about grid capacity and energy affordability, they should prioritize reining in large energy users like data centers and crypto-mines rather than cutting back on electrification,” Lenoff said.
“That’s a commonsense policy that will save people money while cutting climate pollution.”
Massachusetts lawmakers may double the number of cities and towns allowed to ban fossil fuels in new construction. A bill under consideration would add up to 10 communities to an ongoing pilot program that proponents say is already reducing emissions, making homes healthier, and lowering energy bills — all without stifling the development of new housing.
Cities including Salem and Somerville are lining up to participate in an expanded program, and some local leaders in Worcester are eager to take part, too. Boston, the state’s largest city, has previously expressed interest in joining.
“We’re a coastal community that’s going to bear the brunt of climate change,” said state Rep. Manny Cruz, a Democrat representing Salem. “We want to make sure we’re doing our part to mitigate the damage.”
As Massachusetts strives to reach net-zero carbon emissions by 2050, it has prioritized policies that encourage the transition away from fossil fuels, particularly natural gas. In 2022, as part of a wide-ranging climate law, the state created a pilot authorizing 10 municipalities to prohibit fossil-fuel hookups in new construction and major renovations. In 2023, it introduced an optional building code aimed at reducing energy consumption and preparing for an all-electric future, and later that same year, regulators issued guidelines for natural-gas utilities to evolve toward clean energy.
Massachusetts joins other states and cities pursuing such policies. New York this summer became the first state to commit to an all-electric building standard, though Gov. Kathy Hochul, a Democrat, is now under pressure to delay the implementation of these rules. Dozens of local governments nationwide have measures on the books barring gas use in new buildings and renovations, and some have policies to ratchet down fossil-fuel appliances in existing structures over time, too.
Advocates hope Massachusetts’ pilot paves the way for the legislature to allow all 351 of the state’s cities and towns to choose their own path on fossil-fuel restrictions.
The bill still faces committee votes in both the House and Senate. Single-issue bills like this one are rarely approved by the full legislature, but are instead wrapped into a larger package, said state Sen. Michael Barrett, a Democrat and chair of the legislature’s telecommunications, utilities, and energy committee, which heard testimony on the bill late last month.
Massachusetts’ all-electric pilot has roots stretching back to 2019, when the town of Brookline passed a bylaw prohibiting new fossil-fuel infrastructure. Supporters argued that the momentum behind the energy transition and forecasts of rising natural gas prices made the policy a responsible step.
There’s no point in installing new systems now that will only get more expensive to run and will end up needing to be replaced with electric equipment before too long, said Lisa Cunningham, cofounder of nonprofit ZeroCarbonMA and one of the forces behind the Brookline bylaw.
“It’s basically locking people into these huge energy burdens,” she said.
But Brookline’s policy was struck down in 2020 by the Democratic attorney general Maura Healey, who was later elected governor of the state in 2022. Healey argued that municipalities do not have the authority to supersede state building and gas codes, though she said she supported emissions reductions and felt she had no choice but to reject the bylaw.
So Brookline and several other towns petitioned the state legislature for special permission to implement their own rules. Lawmakers responded by including the 10-town demonstration program in a sweeping climate bill that then-Gov. Charlie Baker, a Republican, signed in 2022 despite expressing serious reservations about the impact the pilot might have on housing.
Indeed, detractors have long maintained that all-electric building mandates will drive residential construction costs up at a time when Massachusetts is facing an acute housing shortage.
However, none of the 10 municipalities in the current program have reported such a slowdown. Lexington, for example — which has adopted both the fossil-fuel ban and the more stringent building code — has permitted some 1,100 new housing units in the past two years, including 160 affordable homes.
Research also indicates that building and running an all-electric house does not come with a price premium. A 2022 report by clean-energy think tank RMI finds that the up-front cost and annual operating expenses for a fossil-fuel-free home in Boston are slightly lower than for a mixed-fuel building. Since then, Massachusetts has adopted discounted wintertime electricity rates for homes with heat pumps, making electrification even more affordable.
“The lowest-hanging fruit is to build all-electric,” Cunningham said. “Doing all these as retrofits is going to be a lot more difficult.”
In 2023, advocates and supportive lawmakers proposed a bill that would allow any municipality to implement its own gas ban, but the measure did not make it into the climate package passed later that session.
Proponents of expanding the pilot say it is important to offer the opportunity to a wider variety of communities across the state. Of the initial 10 participants, all but two are Boston suburbs, and only two have median household incomes below $125,000. Seven have populations below 50,000, with one, the Martha’s Vineyard town of Aquinnah, home to only about 600 people.
“It restricted it to these much wealthier, much smaller, less diverse communities. That’s just not equitable,” Cunningham said.
Broadening the program will also help the state collect more data about how these prohibitions impact emissions, public health, and housing costs and availability, said Barrett, who supports the bill.
“The more data we can get in about the cost of going all-electric, the better off we’ll be,” he said.
Somerville has been eager to join the pilot since the beginning. When the program launched, it was intended to include the 10 communities that had already asked the legislature for permission to implement fossil-fuel restrictions. The creation of the program, however, spurred more local governments to vote for such bans in hopes of joining the pilot if any spots should open up. Somerville was the first to do so, just weeks after the law was enacted, with its City Council passing the measure unanimously.
Having the authority to limit fossil-fuel growth would not only move Somerville toward its goal of being carbon-negative by 2050, but also lower heating costs for some residents and create housing with better air quality, said Christine Blais, the city’s director of sustainability and environment.
“We want to give Somerville residents the best chance to have a good quality of life,” she said.
In Salem, which has also passed a measure asking to join the pilot, City Councilor Jeff Cohen would like to see the bill passed, but he also thinks it doesn’t go nearly far enough. Allowing 20 of Massachusetts’ 351 municipalities to ban natural gas just won’t make a meaningful dent in the state’s emissions, he said.
“It’s time to do something,” Cohen said. “Ten at a time doesn’t seem good enough for me.”
.svg)
