In California, a number of regional air quality districts are attempting to prohibit the sale and installation of gas-fired water heaters and furnaces as part of efforts to reduce nitrogen oxide (NOx) emissions and improve air quality. While the intent is meritorious, the practical realities of converting existing buildings from gas-fired furnaces and water heaters to electric (heat pumps, electric water heaters, etc.) involve substantial structural, building-system, and cost challenges.
Structural and Building Challenges
Converting from gas to electric systems isn’t as simple as swapping appliances. It often requires major, costly building upgrades, such as:
- Electrical retrofitting and capacity: Many buildings lack sufficient panel size or wiring to power electric water heaters and furnaces. Upgrading panels and service lines can range from $11,500 to more than $120,000 per building, depending on size and configuration (California Public Utilities Commission, 2023). In addition, these high-load electrical appliances further strain the state’s already stressed electrical grid.
- System compatibility: Electric heat pumps and water heaters may require changes to ductwork, venting, and insulation, along with space for exterior condensers or indoor units. These structural adjustments can add thousands of dollars in labor and materials.
- Resident disruption: Retrofitting occupied buildings is often invasive and may require temporary tenant relocation, adding logistical and financial strain for both property owners and residents.
Structural and Building Challenges
Converting from gas to electric systems isn’t as simple as swapping appliances. It often requires major, costly building upgrades, such as:
- Electrical retrofitting and capacity: Many buildings lack sufficient panel size or wiring to power electric water heaters and furnaces. Upgrading panels and service lines can range from $11,500 to more than $120,000 per building, depending on size and configuration (California Public Utilities Commission, 2023). In addition, these high-load electrical appliances further strain the state’s already stressed electrical grid.
- System compatibility: Electric heat pumps and water heaters may require changes to ductwork, venting, and insulation, along with space for exterior condensers or indoor units. These structural adjustments can add thousands of dollars in labor and materials.
- Resident disruption: Retrofitting occupied buildings is often invasive and may require temporary tenant relocation, adding logistical and financial strain for both property owners and residents.
Cost Impacts for Homeowners, Property Owners, and Renters
While precise costs vary significantly by home age, size, system complexity and location, the costs for homeowners, property owners, and renters is daunting. For example:
- Purchase, upgrade, installation and compliance. Replacing both a water heater and furnace would cost $47,800 for single-family homes and $40,100 for a multi-family rental unit according to an economic impact report (Cost of Living Council).
- Retrofitting costs for a building constructed in 2008 to support full conversion to electric appliances may exceed $36,000 per unit. For older buildings, upgrades could exceed $72,000 per unit
- For the average California, these costs represent 39% of the median homeowner’s income.
- Electricity costs. California already has some of the highest electricity rates in the nation, and those costs are continuing to climb. At the same time, natural gas prices are projected to decline. Forcing a shift toward all-electric appliances risks driving higher long-term energy bills for families, renters, and housing providers.
- Housing and cost of living: Adding new costs to an already high housing market will only worsen California’s affordability crisis and make it even harder for working families to find and keep a home. Renters may indirectly bear these costs through higher rents (though rent control laws may delay full cost pass-throughs), reduced amenities, and less investment in housing supply.