The True Cost of Electrification

California has continuously adopted aggressive and far-reaching goals for greenhouse gas emissions reductions. Specifically, these goals aim to reach an 80 percent reduction below 1990 greenhouse gas emissions levels by 2050. Local jurisdictions in the Sacramento Region toyed with the idea of mandating electric appliances to lead the state in greenhouse gas emissions policy. Electrification has also been discussed statewide. The California Building Industry Association recently funded a study to investigate the true costs to consumers to electrify their homes. In this initial phase of the study, they looked at single-family homes in several locations in Southern California.

Many homes lack proper wiring for electric appliances. Even with electric wiring in place, upgrades are generally needed to handle the load of running a house entirely with electric energy. The study found the cost of replacing or installing the wiring and electrical panel needed at approximately $4,600 per household. This cost is not including the new appliances themselves, which costs an estimated $2,600 per household. At $7,200 total, going all electric is far from feasible for the majority of families. Not only is installing and upgrading more expensive, running all electric appliances costs the average home an estimated $4,656 per year in bills. In this study, homeowners repeatedly answered that their gas appliances were preferred, and a vast majority were opposed to the idea of eliminating the ability to purchase a gas appliance or remove the use of natural gas altogether. The next phase of this study will include a variety of types of homes, more locations, and will consider the respective 2030 appliance and utility costs.

Another problem this study addressed was consumer concerns with electricity costs. 30% of survey participants cited concerns over electric bills, and only 4% of participants expressed concern over gas bills. Two thirds of voters responded with opposition to giving up their gas appliances. Two thirds of respondents expressed their desire that gas be available in the future to make monthly bills more affordable. Would you enjoy replacing your gas stove with an electric or induction cook top? If you said no you aren’t alone; 80% of voters agreed that California should not eliminate natural gas if it meant families and restaurants could no longer cook with gas.

This study, though it is the first of many, shows strong opposition to currently proposed steps to achieve aggressive greenhouse gas emissions goals laid out in California’s Climate Change Plan. There is grave concern that becoming all or mostly electric, even just as the City of Sacramento, will cause huge electric energy pricing surges, electricity shortages and potential black outs.

California is facing a pervasive housing shortage, with the cost of living in many cities, including Sacramento, increasing at exponential rates. If the City of Sacramento wants to see change in homelessness rates or an increase in affordable housing supply, pushing the burdensome task of electrifying homes is not the solution. It will further exacerbate the current issues we face both locally and statewide. Forcing electrification would be detrimental to our region.

Much of the Sacramento Region is fortunate to have the Sacramento Municipal Utility District (SMUD) as their electricity provider. SMUD rates are some of the lowest throughout California. Years of good leadership at SMUD fostered low utility rates while still pursuing clean renewable energy. SMUD also provides great incentives for homeowners to voluntarily switch to electric appliances. While these incentives are a wonderful starting point for conversation, in most cases it will not cover the complete cost of electrification. Which would leave many homeowners with costly bills they are not able to afford.

The goals of proposed electrification are good – reducing emissions and being more environmentally friendly. SAR looks forward to working collaboratively with stakeholders to find ways to meet these goals without pricing average Sacramento residents out of housing.