Home Electrification (Part 2): Finding Rebates, Incentives and Contractors
Author: Wei-Tai Kwok, Past President, Sustainable Lafayette (weitai[at]sustainablelafayette.org)
In my last blog post I talked about why my wife and I were motivated to embark on an effort this summer to remove natural gas from our house by the fall and “go all electric” powered by the sun. Our next step was to identify what in our home was powered by natural gas:
1. One hot water heater (75-gallon tank)
2. Two furnaces in our ducted central air and heating system
3. Gas cooktop
4. Gas fireplace
We decided to prioritize the first two items as they were more complex decisions and would require more time and research.
I had two questions at this point which I’ll cover in today’s blog post:
Are there any incentive or rebate programs that I could take advantage of to save money?
What type of vendors or contractor should I be looking for?
My utility, Pacific Gas & Electric (PG&E), turned out to be a good starting point and their website turned out to be a rich source of up-to-date information and leads on home energy upgrades and contractors approved to do installs tied to rebates up to $5,500.
Another source of energy efficiency rebates up to $5,000 per customer is Bay Area Regional Network (BayREN), which provides regional-scale energy efficiency programs and services to reduce carbon emissions and promote healthy, energy-efficient buildings and homes. The BayREN Home+ rebate program is available for detached single-family homes and 2-4 unit buildings in the nine Bay Area counties: Alameda, Contra Costa, Marin, Napa, San Francisco, San Mateo, Santa Clara, Solano, Sonoma.
I looked into both of these, but was disappointed that my home couldn't access these incentives. Here's why.
PG&E: There are only 3 active incentives right now (as of Summer 2019 and Spring 2020), $50 for smart thermostats, and $300 for electric heat pump hot water heater. As I would frustratingly learn several times in this process, if I was going from a natural gas to electric hot water heater, the rebate didn’t apply. That’s because getting more efficient due to “fuel switching” was not currently incentivized by the California Public Utilities Commission (CPUC), although the good news is that on August 1, 2019, the CPUC voted unanimously to amend this outdated regulation, thus opening the door for readers in California to benefit from the $1 billion in available energy efficiency incentives. Read more here.
In PG&E territory there’s also another rebate program called Advanced Home Upgrade which offers rebates of up to $5,500 when homeowners make energy-saving improvements through authorized contractors. The program rewards a comprehensive, whole-home approach, which includes improvements such as heating, air-conditioning, and water heating.
This sounded like the perfect program, designed for someone just like me. Regrettably, my project yet again wouldn’t qualify due to the “fuel switching” requirement (you only get rewarded for going from a less efficient gas to a more efficient gas product. Or a less efficient to more efficient electrical product. No rebates for less efficient gas to more efficient electric.)
BayREN offered $5,000 rebates for energy efficiency upgrades including air sealing, duct sealing, insulation, high-efficiency furnaces and air conditioners, high efficiency water heaters, and more. I was interested in all these, but the rebates are paid only for homes built in 2001 or earlier. My home, completed in 2004, did not qualify. Also, the fuel-switching regulation would again have made me ineligible for big portions of the funding, even if my home was built before 2001.
***NEWSFLASH*** in early 2020, the BayREN Home+ Rebate measures removed the "fuel switching" issue and so now you CAN get incentives for going from gas to electric. There's now $1000 available to switch from gas to a heat pump water heater, yay! Details here:
In summary, I could get no rebates from PG&E or BayREN back in 2019. It was a bummer to learn that even as progressive as California is, we have outdated policy regimes which are not aligned to incentivize the consumer behavior needed to meet California’s 2030 climate change goals.
If I had lived in nearby Marin County, I would have been able to claim more than $2,000 in county-level electrification rebates, but where I live in Contra Costa County, we don’t have a similar program in place yet.
Though we struck out on the incentives, my wife and I still wanted to move forward so now it was time to find a contractor.
TAX CREDITS (Updated March 11, 2020)
I just learned that Congress and the White House passed a bill in Dec 2019 whereby the "Non-Business Energy Property Tax Credits have been retroactively extended from 12/31/2017 through 12/31/2020." Woo hoo. This means I can claim the maximum $500 tax credit for the attic insulation and sealing and Sanden heat pump hot water heater install. Learn more at the Energy Star website and on the IRS Form 5695 Instructions. So consider this $500 benefit if you can install by 12/31/2020.
PICKING THE RIGHT CONTRACTOR
Whereas my home electrification project could be as simple as replacing the four gas appliances in the house by hiring four different contractors (HVAC, Plumber, Fireplace and Kitchen), I wanted to take a more integrated rather than a piecemeal approach. I was looking for a multidisciplinary contractor who would look at the retrofit at a systems level. I didn't actually know what I was looking for, but I thought I'd recognize it when I saw it.
Also, while there are many free home energy audits which undoubtedly uncover an array of energy efficiency improvements, I was looking to get a more holistic view of our building energy performance. We built our home in 2004 and over the past 15 years living here, we have learned about the many good and bad decisions we made at the time! Our builder (who we liked a lot) came from the “bigger is better” school of thought, and so we did “overbuild.” For example, we have a 75-gallon rather than 40 gallon hot water heater; and 3.5 Ton and 3.0 Ton A/C units, both too big and one which was never needed to cool our already-cool downstairs. (We have a 2 ½ car garage and don’t regret oversizing that at all :-)
Therefore, although I had seen and received dozens of advertisements in the mail from AC and heating, attic insulation, and hot water heating companies, I did not call any of them for proposals.
I searched for, and eventually found, a company called Eco Performance Builders, a Concord, CA-based building performance contractor specializing in residential retrofits. Their company blog had many articles related to my project needs, including heat pumps, furnace retrofits, Zero Net Energy homes, etc. I later learned that they were one of the top outfits here in Northern California, so it was lucky they were headquartered only 20 min from my home. I decided to call them to explore the first step in the process: an energy audit of my home.
Read my next Blog Post on What the Eco Performance Builders energy audit revealed about my house.
Must read! Pocket Guide to Home Electrification Retrofits (March 2021)