Electric Heating Might Create a Huge Push for Decarbonization, But Costs Are Still a Problem



According to a new report by the Rocky Mountain Institute (RMI), businesses and homes can cut anywhere between 10% and 30% of America’s carbon emissions by switching to electricity for heat instead of using fossil fuels. The report also concluded that the reduced emissions can increase the use of smart grid-connected devices, maximizing the use of renewable energy.

In this new RMI analysis, they looked at electric space and water heating compared to fossil fuel-sourced heat for new construction and home additions with varying electric rate structures in Oakland, California; Houston, Texas; Providence, Rhode Island; and Chicago.

Water heating accounts for roughly 18% of your home’s energy use. Currently, more than 70 million homes and businesses in the United States burn oil, natural gas, or propane on-site to heat their water and spaces. This generates 560 million tons of carbon dioxide every year.

A goal is set in place to eliminate 75% or more of these greenhouse gas emissions, and it will require eliminating almost all of the CO2 produced by furnaces and water heaters across America, partnered with other measures too.

Speciality heat pumps that control temperatures by drawing air in and out of a building have been created to help the deep decarbonization goal set in most states. Right now, roughly 12 million American homes are using these systems. Most of them are in mild climates in the Southeast. The new RMI report claims that using these systems could be expanded markedly. The only issue? Cost.

According to the report, 56 million Americans use natural gas to heat their homes and water because it’s cost-effective, and they will have to pay much more for energy bills every month if they switch to electric heat pumps at today’s prices. With 70 million buildings already relying on fossil fuels for heat, the electric heat pumps are more expensive than natural-gas heating.

This is where demand flexibility comes in. According to the new report, the value of demand flexibility will increase as variable renewables grow, increasing the price spreads in the electricity market.

“Demand flexibility technologies allow commercial customers to manage their energy use without sacrificing productivity or occupant comfort, and minimize energy bills,” RMI principal Mark Dyson said at the time.

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