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Cheaper to electrify US homes during construction than after

All-electric homes save $7,500–$8,200 on construction costs and reduce energy consumption by 34% compared with business-as-usual, according to research from non-profit New Buildings Institute.

By Energy Monitor Staff

It is cheaper to electrify buildings – or at least make them ready for future electrification – at the time of construction than retrofitting them for electric equipment afterwards, according to new research from US non-profit New Buildings Institute (NBI) with support from the Natural Resources Defense Council.

NBI analysed the upfront and life cycle cost of two building types following NBI’s Building Decarbonisation Code: all-electric (powered only with electricity) and mixed-fuel (electricity plus natural gas or other fossil fuels such as propane or oil that is combusted on-site).

All-electric homes achieve $7,500–$8,200 of construction savings. (Photo by Suti Stock Photo via Shutterstock)

The Cost Study of the Building Decarbonisation Code report found that all-electric homes achieve $7,500–$8,200 of construction savings and mixed-fuel building households are nominally more expensive. There were only marginal additional upfront costs – $0.33–$0.50/ft2 – for all-electric office buildings with most attributed to electric vehicle charging infrastructure. 

Electrifying homes during construction is also far more cost-effective than making them “electric-ready”, found the study. The avoided cost of not installing fossil fuel infrastructure is a key factor supporting the cost-effectiveness of the all-electric pathway; still, electric-ready construction saves the homeowner thousands of dollars compared with retrofitting to accommodate electric equipment replacements such as heat pumps further down the line.

Over their life cycles, all-electric homes reduced energy consumption by 34%, while the mixed-fuel homes reduced energy consumption by 9%. However, all-electric homes can still result in higher utility bills due to the high cost of electricity compared with natural gas in a local area.

The study was limited to New York state, ​​a relatively expensive market in a relatively cold climate. In areas with warmer climates and more affordable electricity, both the operating and life cycle costs of decarbonising will be better than the results of the study, said the researchers.

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