Building Electrification 101: Benefits Of Electrifying Homes, Businesses & More

When we use fossil fuels, it's usually obvious: The sight of a smokestack or the smog-filled emissions from a car’s tailpipe. Those issues are ones we know we can solve, such as replacing coal and gas power plants with clean renewable energy like wind and solar, or switching to an electric vehicle. While those solutions are necessary on a larger scale, there is one place where we can compound its impact—our own homes.

When we cook dinner, take a hot shower, or stay warm in the winter, it's likely we're all using natural gas or some other fossil fuel.

So, what can we do to measurably reduce our climate impact from these seemingly normal—and necessary—behaviors?

Enter building electrification. 

What does building electrification mean? 

As of 2020, only about one in four U.S. homes use electricity as their sole energy source. About 60% of homes rely on other fuel sources for heat—mostly fossil fuels such as natural gas and propane. Many homes also rely on fossil fuels for heating water, cooking, and drying laundry. Building electrification means replacing all these fossil-fuel systems and appliances with new, efficient electric ones.

Building electrification is a key part of building decarbonization, or reducing greenhouse gas emissions from buildings. However, it is less impactful if the electricity itself comes from fossil fuels. To make a difference, it must go hand-in-hand with making the electric grid greener—replacing fossil fuels with renewable energy.

By combining these two strategies, we can get all our country’s buildings running on 100% clean energy. Doing this would eliminate nearly 40% of the nation’s carbon footprint. 

What is the technology behind building electrification? 

Fossil fuel systems—like furnaces, boilers, water heaters, stoves, and clothes dryers—burn oil, gas, or propane to make heat. Building electrification means replacing all of these with new, efficient electric systems.  Below are a few examples.

Air-source heat pumps 

An air-source heat pump works like an air conditioner, but it can provide heating as well as cooling. In hot weather, it transfers heat from inside a building to the outdoor air. In cold weather, it does the reverse. For heating, air-source heat pumps are three to six times as energy-efficient as traditional furnaces or boilers.

Earlier models lacked the power to keep a home warm in sub-freezing temperatures. But according to the Rocky Mountain Institute (RMI), modern models are effective at temperatures well below -10°F. In climates where it gets colder than that, heat pumps can be paired with electric resistance heaters for backup.

Ground-source heat pumps 

An even more efficient way to heat a home is a geothermal or ground-source heat pump. These models exchange heat with the ground rather than with the outdoor air. This saves energy because the ground stays at a fairly constant temperature all year long. Geothermal heat pumps can work in any climate, but they’re much more costly to install than air-source heat pumps.

Heat pump water heaters 

Heat pump technology can heat water as well as air. Heat pump water heaters are more efficient than both old-fashioned electric water heaters and gas-powered water heaters. However, in cold climates, they need to be installed inside the home rather than in the garage.

Electric and induction stoves 

Electric stoves significantly cut down on the amount of gas you use and are often subsidized through energy efficiency programs. But if you think you’ll miss your flame, there’s a modern solution that works much better. For at home gourmets, highly efficient, responsive induction stoves may be the way to go. They use electromagnetism to heat a metal pot directly. However, they are more expensive.

Electric clothes dryers 

Electric dryers certainly aren’t a new technology. However, installing one to replace a gas dryer may require upgrades to a home’s electric system. A gas dryer uses a 110-volt electric circuit, but an electric one needs a larger 240-volt circuit.

What are the benefits of building electrification? 

Converting homes and other buildings to run on electricity has many benefits for their owners. And society benefits from the shift toward all-electric buildings, as well.

Benefits for individuals 

Eliminating fossil fuel use in your home can greatly improve its indoor air quality. According to RMI, air pollution inside homes is often worse than it is outdoors. For instance, cooking on a gas stove can produce levels of carbon monoxide and nitrogen dioxide that would violate outdoor air quality standards. Kids living in homes with gas stoves are up to 42% more likely to suffer from asthma.

Also, electrifying your home could lower your energy bills. A study by the American Council for an Energy-Efficient Economy (ACEEE) showed that customers save when they switch from oil or propane to electricity. Replacing an oil furnace with an efficient electric heat pump can pay for itself in as little as one year.

Benefits for society 

Converting existing homes to electricity isn’t always a money-saver. However, for new construction, all-electric buildings are generally cheaper. Builders save money because they don’t have to pay to run gas lines or install gas meters. That can help bring down housing costs for everyone.

Moreover, new all-electric buildings can produce much lower carbon emissions. For instance, the RMI study shows that in Oakland, California, new homes with electric heat pumps produce around 20% lower emissions than gas-heated homes. However, all-electric homes are only as green as the electric grid itself—so it's key that America continues to urgently transition our grid reliance away from fossil fuels.

Are there any drawbacks to building electrification? 

Unfortunately, erecting new all-electric buildings and converting old ones isn’t aways easy. And like the benefits, the downsides of building electrification affect both individuals and society as a whole. 

Trade-offs for individuals 

For owners of buildings that currently run on fossil fuels, the biggest downside of electrification is the up-front cost. One reason switching over is costly is that it can require upgrades to the electric system. In some older homes, the main electric panel doesn’t have the capacity to run a heating system. To convert the home, you must replace the entire panel.

As noted above, switching from oil or propane to electricity can save you money in the long run. But if you’re currently using natural gas, the story is different. In many areas, a new electric heating system costs more over its lifetime than a new gas furnace or boiler.

Some states, cities, utilities, and nonprofits offer incentives to help offset conversion costs, especially for low-to-middle-income households. According to a 2022 report from ACEEE, there are currently 23 such programs nationwide. Most are in states that are taking the lead on climate action, such as California and New York. To look for programs in your area, check the Database of State Incentives for Renewables & Efficiency or your state’s clean energy website.

In addition to the up-front cost, monthly energy bills can go up for people who switch from natural gas to electricity. This is especially likely to be true in cold climates. A 2021 study by the National Association of Home Builders found that in Denver, energy for an all-electric home costs about $275 more per year. In Minneapolis, it costs $650 more per year.

One way to offset this cost is to switch to either rooftop solar or community solar. Community solar is a solar sharing concept (no rooftop panels required!) that saves you money on your electricity bills. Residents and local businesses can "subscribe" to a large solar farm nearby. As the farm pumps clean energy onto the grid, your subscription—or your "share" of the farm—generates solar credits. Because the farm is connected to the utility company, your share of solar credits is applied directly to your own electricity bill, offsetting some of your monthly charges. It's an easy cost-saving, environmentally-friendly way to go solar for those who can't install rooftop panels.

Check Perch to see if there's a solar farm in your area >

A final problem for homeowners is that if your home is all-electric, a power outage shuts down all its systems. You’d probably lose your heating anyway, since even fossil-fuel systems usually need some electricity to keep them running. But in an all-electric home, your stove, dryer, and water heater stop working as well. One solution to this problem is an emergency battery backup to keep key appliances working until power is restored.

Challenges for society 

The more buildings switch over from fossil fuels to electricity, the more electricity it takes to power them all. The National Renewable Energy Laboratory estimates that electrifying the whole economy could increase U.S. electric use by up to 38%. This will make it more challenging to meet all the nation’s power needs with renewable energy.

That’s the biggest problem for the long-term. But there are other barriers to overcome before we can even start scaling up building electrification. One of these is opposition from natural gas companies. In places like southern California, these companies are pushing hard to fight local laws that would promote electrification. And they’re publishing skewed studies to convince consumers and legislators that electrification is a bad idea. 

Many consumers already see electric heating as less efficient, more expensive, and less reliable than gas. But they don’t know about the benefits of modern, high-efficiency heat pumps or induction cooktops. Educating the public about these technologies is a key step to gaining support for electrification.

Questions and answers about building electrification 

Want to know more? Here are the answers to some of the most common questions about building electrification.

Can buildings run on 100% electricity? 

Absolutely. Heating, cooling, water heating, and appliances can all run on electricity. Any appliance that runs on gas, oil, or propane can be replaced with an electric version.

Can the national electric grid handle a shift to buildings using 100% electricity? 

Yes, but it will pose some challenges. Electrification will not only increase the nation’s total electric use but also shift its timing. With heating systems running on electricity, demand will be heaviest in the wintertime rather than the summertime.

To handle these changes, the grid will need to become smarter. We’ll need appliances that can cycle on and off to free up power when it’s needed most. More energy storage, such as pumped hydropower, will also be important. Building electrification won’t happen overnight, so there will be time to scale up these changes simultaneously.

What are the challenges to building all electric buildings? 

In general, building new all-electric buildings isn’t a problem. In fact, it’s usually cheaper than constructing buildings that use fossil fuels. A bigger problem is converting existing buildings from fossil fuels to electricity.  

The U.S. needs more ways to make conversion affordable so lower-income homeowners aren’t left behind. It also needs to educate the public about the benefits of electrification. And it must do all this over the resistance of powerful gas companies and their lobbyists.

What are some examples of 100% electric buildings in the United States? 

Despite these challenges, many cities, towns, and institutions are already moving forward with electrification.

One example is Stanford University in California. The campus replaced most of its gas-powered systems with electric ones in 2015, cutting its emissions by 68%. A network of pipes circulates hot and cold water around the campus for heating and cooling. A central facility transfers excess heat picked up by the cooling pipes to the ones used for hot water, so it doesn’t go to waste. The system is twice as efficient as heating with natural gas. It’s projected to save the college $420 million over a 35-year period.

Another notable all-electric building is the Bullitt Center in Seattle, Washington. Not only does it run entirely on electricity, it produces all that electricity on site. The 575 solar panels on its roof provide more than enough electricity to meet its needs. Heat comes from a network of hot-water pipes that radiate warmth through the floors. The building also takes advantage of natural daylight and ventilation.