Barry Cinnamon is CEO of California's Cinnamon Energy Systems.

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I’m writing this in San Jose under a Mars-like red sky, with light ash occasionally falling and a faint smell of smoke in the air. Solar output has been down by 60 percent even though the fires burning are at least 50 miles from here.

Some people say this is the new normal. In all likelihood, things will get worse as we experience more extreme weather events and sea levels rise from melting ice sheets. Many people in California are literally powerless since our utility infrastructure is failing to keep pace with the effects of climate change, magnified by our society’s increasing electric power needs.

Fortunately, with currently available solar, battery and heat pump technology, every building under two stories with a sunny roof can be a net generator of energy — essentially carbon-negative. Moreover, with grid-connected batteries, buildings can easily provide the resiliency that our grid needs during power shortages and blackouts.

Altruism aside, generation is less expensive than conservation for existing buildings. It is more cost-effective to add solar and storage than to improve the efficiency of the building shell or to replace existing HVAC equipment prior to its end of life with new high-efficiency equipment.

Time to burn that bridge to natural gas

Former U.S. Energy Secretary Ernest Moniz positioned natural gas as the bridge to renewables. We’ve crossed that bridge; on-site renewables are now cheaper than natural gas for all applications except industrial process heat and long-haul trucking.

Humanity is facing an “all hands on deck” climate-change emergency. Since rooftop solar and storage can be installed quickly and inexpensively, we should not stop at zero carbon — we should strive to make all buildings carbon-negative as quickly as possible.

Customer economics for on-site renewables are compelling. Consider a home that uses 1,000 therms of natural gas for space heating per year; at $2/therm, that works out to $2,000 a year. Current heat pumps would consume 8,300 kilowatt-hours per year to provide the same amount of heat; at $0.30/kWh that works out to about $2,500 for electricity.

However, with rooftop solar in the equation at an average rate of $0.10/kWh, annual operating costs for the heat pump would be $830. Similar energy math also demonstrates that a heat pump water heater is superior to a natural-gas water heater.

Overcoming our addiction to fossil fuels is the challenge since buildings account for 28 percent of total energy use in California. Unfortunately, there is limited literature on the real-world instances of electrifying existing buildings. Is an electrification retrofit practical, cost-effective and comfortable? Is it possible for buildings to generate all the energy they need on an annual basis?

To find out, I embarked on a project to convert a 50-year-old San Jose house completely to electricity. No more fossil fuels.

Along the way, I encountered a few stumbling blocks but also got some very positive surprises. The following discussion breaks down these building electrification experiences into three basic stages: preparation, generation and conversion.

Details are shown in the following table and in the discussion below.

Preparation: Low-hanging fruit

Conventional wisdom suggests starting with an energy audit. I’ve used energy audit programs for over 40 years, including the DOE’s Home Energy Advisor program. Unfortunately, these programs rarely account for local utility rates, solar and storage incentives, and declining solar and storage costs, as well as new heat pump and appliance technology.

My contrarian advice is to punt the energy audit and focus instead on the low-hanging fruit — generally, LED lighting; sealing leaky windows, doors and ductwork; and operating electrical appliances efficiently when electric rates are lowest.

Nevertheless, there are some products and services that provide real-time reporting of electricity consumption; these services are quite helpful in identifying and subsequently reducing building electricity use.

For this project, it did not make economic sense to reinsulate the walls or upgrade the remaining single-glazed windows. However, the ancient attic insulation was vacuumed out and 18” of blown-in cellulose was added, raising the R-value from less than 7 to 60.

It was a no-brainer to replace all the incandescent and CFL bulbs with LEDs. The old single-speed pool pump was replaced with a new variable-speed pump that is so quiet that it can be operated at night when electric rates were low. Eliminating vampire power loads, using a setback thermostat and operating appliances at off-peak times generated additional savings.

Generation: Solar and storage

Once the easy and cheap energy efficiency measures have been implemented, in almost every case, the next step is to generate electricity with a rooftop solar power system. The payback for these systems occurs faster than it would by upgrading functional appliances, adding additional wall insulation or replacing doors and windows.

Since there was no data available on the home’s previous energy consumption, it was estimated that about 10 kW of rooftop PV would result in a zero electric bill — including HVAC, water heating, cooking, pool pumps and one electric vehicle. I also installed 20 kWh of energy storage and two inverters (one with EV charging capabilities).

Current electric rates are $0.48/kWh from 4 to 9 p.m. and $0.17/kWh during most other times. By storing solar energy in the battery during the day (instead of selling it back to the grid at lower midday rates) and then using that energy at night, battery customers are effectively able to avoid high peak electric rates. Plus there is the obvious benefit of having backup power for essential loads in the house during blackouts caused by utility equipment failures, fires and public-safety power shutoffs.

Conversion: Replace all gas appliances

It is rarely cost-effective to purchase new, high-efficiency appliances to replace existing, functional appliances. Better to wait until the old appliances die unless the efficiency of the existing appliance is extremely low or there are other reasons (such as comfort, noise or compelling environmental guilt).

In preparation for this complete electrification project, the original 200-amp main service panel was upgraded to a new “solar-ready” service panel. Since this work was done at the same time as the solar and battery installation, the federal tax credit applied to this upgrade.

Although the existing gas furnace was functional, the air conditioning compressor did not operate reliably and the ductwork in the house was in poor condition. To provide both heating and air conditioning, a two-zone heat pump system was installed, along with two fan units, new ductwork and two internet-connected thermostats.

Note that this was not a “split” ductless system but rather a traditional ducted system using the existing air vent layouts in each room. In operation, this high-efficiency inverter-based HVAC system is almost impossible to hear. Moreover, the outdoor compressor unit occupied less space than the existing cylindrical AC compressor, and removal of the old gas furnace and venting system freed up additional space in the garage.

San Jose has a rebate program to encourage the installation of heat pump water heaters. The existing 65-gallon gas water heater was replaced with a 65-gallon heat-pump water heater. Since time-of-use rates provided additional benefits to doing laundry during off-peak times, the gas dryer was replaced with an electric dryer.

After these appliance changes were made, the antique gas cooktop was the only gas appliance left in the house. An induction cooktop was installed to replace this gas range, thereby completing the electrification of the home. However, two rarely-used outdoor gas appliances remained: the gas pool/spa heater and the gas grill. Since these polluting gas appliances are rarely used — and with no compelling electric options — they were left in place.

Lessons learned

  • Homes that are fully electrified — heat pump HVAC, heat pump water heater, electric stove/oven, electric dryer, solar, storage, EV — cannot get by on smaller 100-amp or 125-amp electric services. Costs for individual consumers can range from $5,000 for a simple electric service upgrade to well over $20,000 if underground wiring or transformers need to be updated. Upfront utility engineering fees and delays of six months or more are typical. Cities and states that plan to electrify existing buildings must find ways to proactively streamline and reduce costs for electric service upgrades. No homeowner in their right mind would wait three to six months without heat or hot water for an electrical upgrade. They will simply replace broken natural-gas appliances with new ones.

  • Heat pump technology has advanced rapidly. However, HVAC contractors may not understand the integration issues with solar, storage and backup power. Some quotes that I received recommended natural gas or electric backup heat, as well as older and less efficient heat pump technology that would not operate during a power outage. The multizone inverter-based heat pump that was installed is compact and efficient, and has a low operating and startup current draw.

  • Plumbers sometimes confused heat pump water heaters with flash water heaters or conventional electric tank water heaters (which are actually prohibited in some areas). The installation of a heat pump water heater may require an additional 30-amp electric circuit, which is an electrical task that is outside the scope of work of conventional plumbers.

  • Sizing a solar system is fairly easy if historic energy data is used. More complicated engineering calculations are necessary to determine the additional solar capacity required when a heat pump water heater, HVAC system or EV is being considered. Battery system design must consider both the power available from the battery as well as the energy capacity of the battery, and these power/energy requirements depend on the size of the solar system as well as the appliances expected to be operating during a power outage.

  • Although the hardware for all-electric homes is reliable, most software and communication protocols are still at an early stage. These systems (and their respective cellphone apps) rarely talk to one another. The biggest challenges in this project related to configuring these apps and getting them to communicate reliably.

  • This project involved the work of seven different types of specialty contractors: insulation, pool, electric, solar/storage, HVAC, plumbing and carpentry. Homeowners who are not familiar with the engineering tradeoffs should consider hiring a consultant who understands the available equipment choices, as well as local codes, electric rates and incentives.

  • Comfort and safety were significantly improved in this project. The electrical system is safer; HVAC, water heating and cooking create no emissions or fire danger; heating and cooling are quiet and more comfortable; and backup power is automatic, silent and safe.

  • After one year of operation, it is clear that a 10 kW rooftop solar system would have been the right size. However, during the installation, additional panels were installed, raising the system size to 12.8 kW. After the first year, the system generated 17,404 kWh, with an excess of 7,788 kWh as per the utility bill. There would have been much less excess energy if two EVs were being charged at home, rather than one. The 20 kWh of energy storage provided enough capacity to avoid peak energy use on 335 out of 365 days of the year. Only on very hot, smoky or cloudy days was it necessary to draw utility power during peak times.

Policy recommendations

The tangible impacts of climate change are compelling California to electrify buildings and transportation on an increasingly short time frame. All gas appliances need to be replaced, and inexpensive and reliable electricity is also essential. Upgrading existing buildings with on-site solar and storage is the fastest and least expensive means to this end. Since the incremental cost to add more solar and storage is relatively low, encouraging buildings to go carbon-negative is beneficial to the environment, the grid and ratepayers.

Effective transitions of this magnitude are accelerated by favorable customer economics. From a financial standpoint, there is private capital from both building owners and the banking industry. However, this transition is being delayed and sidetracked by incumbent utilities. The desire for investor-owned utilities to generate increasing profits is fundamentally at odds with California’s need for a rapid transition to safe and affordable electricity; the only solution is to overhaul the utility business model — not an easy task.

The real-world findings from this project suggest three key policies to improve the economics and accelerate building electrification:

  1. Fairly compensate host customers

Customers and investors must continue to receive fair compensation for both the energy (kWh) and power (kW) that they provide to the grid. They should be compensated for the investments they make in solar and storage, especially as these millions of solar and battery systems provide energy and power during power shortages and blackouts. Lost profits to utility investors should not be used as a rationale to increase customer costs — especially when there are faster and less expensive alternatives to ratepayers.

  1. Eliminate paperwork, simplify incentives, automate interconnection

These needless bureaucratic costs add 30 percent or more to electrification projects, particularly those related to improvements that interact with the electric grid. Management of incentives and interconnections must be taken out of the hands of incumbent industries who are obviously opposed to these self-generation and conservation measures. It is ludicrous that investor-owned utilities so deliberately and effectively mismanage incentive programs that the costs of processing this paperwork often exceeds the value of the incentive itself. Interconnection delays of four to six months are typical for battery projects, commensurately reducing the financial benefits to customers (a five-month delay with a $300 electric bill means that an additional $1,500 goes to the utility instead of being saved by the customer).

  1. Upgrade residential electrical infrastructure

The process to upgrade a home’s electrical service is broken and must be overhauled. When a homeowner’s water heater or furnace dies, or they purchase an electric vehicle, or they want to install a rooftop solar to meet all (or more) of their electrical needs, or they want to install a battery for backup power and grid support services, they cannot wait six months and spend as much as $20,000 for their utility to get around to a service upgrade. These extra costs and delays often completely sidetrack homeowner efforts to electrify. A better course of action for governments would be to coordinate electric service upgrades to groups of nearby homes. Homeowners would not have to navigate the opaque set of utility and city rules for upgrades, one contractor could be selected to do the expensive underground and aerial electrical work in a neighborhood, and homeowners could then electrify their homes when convenient.

By accelerating California’s electrification transition, we have the potential to avoid the worst impacts of global warming, while at the same time improving the environment and economy. The good news is that both the technology and economics are in place to support these electrification efforts.