Whole home electrification trends
Whole home electrification may be an unfamiliar term, but it’s hardly a new phenomenon. In fact, whole home electrification has been increasing in popularity for decades.
For example, from 1950 to 2018, the percentage of U.S. homes that use electricity as their primary heating source increased from just 1% to nearly 40%. Meanwhile as of 2020, over 25% of all U.S. homes are entirely electric. And from 2005 to 2015, the share of heated U.S. homes using heat pumps increased from 8% to 12%.
Even the popular sentiment around whole home electrification is improving: 37% of homeowners feel solar is more valuable when paired with whole home electrification. Why? Doing so enables homeowners to tap into the efficiency and cost benefits of both.
Source: U.S. Energy Information Administration (EIA)
Source: U.S. Energy Information Administration (EIA)
Source: U.S. Energy Information Administration (EIA)
Source: U.S. Energy Information Administration (EIA)
Growing federal and state policy and incentives
Perhaps the most important trends to know involve the constantly evolving federal and state policies regarding electrification and energy efficiency.
Of course, the Inflation Reduction Act (IRA) is the biggest, but virtually every state has different incentives and policies to aid in going electric.
The Inflation Reduction Act
When it comes to adopting more planet-friendly power, we’re seeing big changes on the legislative front, too.
In 2022, the federal government passed the Inflation Reduction Act (IRA), a landmark piece of legislation that financially incentivizes U.S.-wide development of electricity transmission infrastructure. Almost immediately, the impacts were staggering:
- Usage and development of solar and solar energy storage systems saw stellar growth.
- Adoption of heat pumps and electric vehicles (EVs) is anticipated to increase.
- New energy jobs were created, helping to boost the American economy.
What’s more, the IRA gave birth to a number of clean energy tax incentives for qualifying entities, including:
- Rural electric cooperatives: The Department of Agriculture authorized $9.7 billion worth of grants, loans, and other forms of financial assistance for rural electric cooperatives that purchase clean energy and zero-emissions systems, which could cut consumer energy costs for low-income U.S. communities.
- State, local, and Tribal governments: For example, the National Oceanic and Atmospheric Administration was awarded $562 million for nearly 150 climate change resilience projects across 30 coastal states and territories.
- Individual homeowners: The IRA extended the 30% Investment Tax Credit (ITC) for solar until 2032. It also clarified that the credit can be applied to upgrades like home batteries and heat pumps. Homeowners can also claim $7,500 for new electric vehicles, or $4,000 for used.
Still, just because the IRA was passed doesn’t mean homeowners will know about it or resonate with it. For example, as recently as 2024, 51% of homeowners knew the term “Inflation Reduction Act,” yet only 5% were motivated to purchase a solar system due to tax incentives. With this in mind, solar installers need to do more to educate consumers on the benefits of home electrification in general, incentives like the IRA, and particularly electrification backed by a solar system.
💡 Did you know
The IRA offers an Energy Efficient Home Improvement Credit which provides up to a 30% tax deduction for upgrades like heat pumps, insulation, breaker boxes, and more.
Growing state policies and legislation
In addition to the federally recognized IRA, several U.S. states have policies and legislation with stipulations encouraging building — and converting existing homes into — net-zero energy homes. For example:
New York: Climate Leadership and Community Protection Act (CLCPA)
- Massachusetts: Clean Energy and Climate Plan (CECP)
- California: California Advanced Homes Program (CAHP), Low-Income Weatherization Program (LIWP), and Self-Generation Incentive Program (SGIP)
If you have customers in these areas, retrofitting their existing homes with solar, battery storage, and other efficiency solutions can help them comply with these new energy efficiency standards — and save money.
Growing emphasis on impacts of climate change and grid vulnerabilities
The short- and long-term effects of climate change hang heavy on many Americans’ minds. After all, everyone wants the Earth we all share to be safe and healthy today and for future generations. But what homeowners may not know is that climate change also severely impacts electrical grids, leading to U.S. outages doubling from 2003 to 2023.
Studies show that one impactful approach to combating climate change is decarbonization, which involves actively transitioning from fossil fuel power to carbon-free, renewable energy sources.
That’s where whole home electrification comes in. Whole home electrification gives families the opportunity to make significant contributions to the global movement toward decarbonization, reducing emissions, increasing power grid uptime, and improving the long-term health of our planet.
💡 Did you know?
According to the Department of Energy, decarbonizing U.S. buildings would save more than $100 billion in annual energy costs through efficiency improvements.
Increased financial viability of solar-plus-storage systems
Homeowners can adopt home solar systems, including photovoltaic (PV) systems, that connect to and store solar energy in a storage solution like a lithium-ion battery. In doing so, they create what’s known as a solar-plus-storage system, which enables households to use stored solar energy when sunlight is low, like at night or during an outage.
Due to U.S. grid expansion and increased purchases of EVs that depend on them, lithium-ion batteries are becoming far more cost-efficient than ever before. But as of April 2024, only about 20% of U.S. homeowners with solar panels had battery storage, presenting solar professionals a unique opportunity to educate customers on the cost benefits of solar-plus-storage systems.
In the next section, we’ll look at some specific benefits of whole home electrification.