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Developing Financial Advantages to Switch to Electricity

The stay at home orders due to the global pandemic has slowed but not stopped policy development in the state. Effective policy takes time, and most efforts are looking far beyond our current state of affairs.

The directive to electrify buildings to reduce greenhouse gas emissions continues to gain momentum. Most utilities and many local governments in the state are working on or rolling out some form of incentive program related to electrification. For many, the first step is providing rebates for heat pump water heaters.

Electrification is much easier to promote when there are financial advantages to switching the source of energy, typically from natural gas to electricity. For some regions, this already the case. For others, changes to electric rates will be necessary to promote adoption. Rate changes take time and typically lag behind the advances in technology.

Utility Billing Rates for All-electric Homes

The good news is utilities have recognized this issue and are developing new rate structures for all-electric homes. Both Pacific Gas and Electric (PG&E) and San Diego Gas and Electric (SDG&E) have recently announced that they are working on new billing rates for all-electric homes. Rate changes that support all-electric dwellings are a significant step forward. Currently, PG&E and SDG&E both have the highest electrical rates in the state. New rate structures for all-electric homes will remove a significant barrier and encourage the transition from fossil fuels to electricity as the primary energy source in residential buildings.

A new report has been released by the Sierra Club that examines the impact of heat pump technologies impacts on climate change. The findings conclude that electric heat pump technology helps mitigate the effects of climate change in every corner of the country, even when electricity is generated by burning coal. The report provides further evidence of the benefits of transitioning from fossil fuels to electricity in buildings.

Charley Cormany
Executive Director

Advocacy Update, March 2020

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