Threads of Equity - Decarbonization Introduction
Hannah Merriam: Welcome to Opinion Dynamics. Today we are going to introduce you to the fundamentals of decarbonization and talk about key issues in the space. Later podcasts will take a deep dive into these topics. I am Hannah Merriam, I’m a senior consultant at Opinion Dynamics, and today I’m joined by Jen Loomis, a Principal Consultant with her Ph.D. in sociology and social inequality. So, Jen, I was hoping that you could start by telling us a little bit about how we should think about decarbonization.
Jen Loomis: Yeah, that’s a great question, Hannah. So, when we think about decarbonization, we should really think about two key issues. And that is, what’s happening in the building, and then what’s happening on the grid that is supplying energy. So, the first thing to think about with decarbonization is electrifying end-uses in buildings and getting away from natural gas and propane. So that means changing over things like space heating equipment, or water heating equipment to be electric. So that’s great if they’re using electricity. But what is the source of that electricity on the grid? We don’t want to be pulling electricity that’s coming from dirty fuel sources like coal, we want to be using the electric energy that comes from clean energy sources, which are often renewable, like hydro and wind and solar. So that way, when we have the electric end-uses at the buildings, they’re taking advantage of that clean energy on the grid. Now, it’s really important to recognize that renewable resources are intermittent. And so, they’re not constant. They’re not always there, and they’re not always available. And so, with this situation, it’s really important to help people understand when clean energy is available and use their electric end-uses at times when there is greater clean energy on the grid, such as during the middle of the day when a lot of solar is available, or sometimes at night when there’s a lot of wind power available.
HM: And so, my understanding then is that it is the combination of both what’s going on in the grid and also having the equipment in the home is electrified rather than using gas equipment.
JL: Absolutely. Decarbonization is a two-prong approach. We want to make sure we have clean energy on the grid, and then we have equipment in the homes taking advantage of that clean energy.
HM: And how are utilities today going about that two-prong approach?
JL: Yeah, so we’re seeing a lot of activity and a lot of programs at utilities right now related to decarbonization, and beneficial electrification. Utilities have taken a lot of interest in heat pumps. And heat pumps are, first of all very highly efficient, but they’re also electric. And so, heat pumps just move heat around, they don’t generate heat. And that’s why they’re very efficient. And so that’s why we’re seeing lots of utility programs promoting the use of space conditioning and water heating heat pumps, and then utilities are also promoting the procurement of renewable energy resources to clean up their grid.
HM: We’ve talked a little bit- you mentioned heat pumps; what other types of equipment do you see going into homes that are electrified?
JL: Yeah, another key piece of equipment that we see contributing to building decarbonization is the technology that’s called induction cooktops. You know, we know that people are pretty wedded to their gas cooking. And there’s been a long history of promoting gas for cooking. But induction technology has really improved in the last decade or so. And it’s highly efficient. And it does offer superior control over the temperature. And it keeps the kitchen cooler because it’s not off-gassing heat into the environment. So cooking is another key area that we can electrify to decarbonize.
HM: I can, definitely… definitely know about people’s love of their gas stove. But it’s cool to hear about the induction cooktops. So, we’ve talked a little bit about the importance of decarbonization. Are there certain jurisdictions or states in the US that need to focus more on decarbonization than others?
JL: Yeah, yeah, that’s a great question, reflecting you know, a lot of what’s going on in our country right now, different parts of the country have different situations. So, decarbonization is going to look different in these different places. For instance, in Kentucky and Virginia where there’s a lot of coal on the grid, they might want to prioritize cleaning up the grid before prioritizing electric equipment and buildings. Other places like Texas where there’s lots of wind energy and lots of clean energy, they may be ready to start promoting electrification of end-uses and buildings. And then in places like California where we have so much solar energy during the day, it may be most important that they focus on customer education and helping customers understand when to use energy so that they can better take advantage of the clean energy.
HM: So it differs depending on where you are in the States. Also, is there any concern about equity when it comes to decarbonization and beneficial electrification?
JL: Yeah, I’m so glad you asked. Equity is a really important part of decarbonization. So first, I need to explain the concept of how we as ratepayers paid to maintain the infrastructure that delivers energy to buildings. So, you may have noticed that on your utility bills, there are some fixed costs on there. And those go to maintaining the pipelines and the wires and maintaining the distribution infrastructure. Now, if I were to electrify my home and get rid of natural gas, well, I’m no longer paying that fee to maintain the gas system. Now that gas system is still there, and it still needs to be maintained and taken care of and so that cost doesn’t change. And so that means that as there’s fewer customers supporting the natural gas system, the cost that each ratepayer will have to pay to maintain it will go up. And what we’ve been seeing is that the customers that are electrifying their homes, tend to be people who have higher incomes, or have higher levels of education, so that we are at serious risk of leaving those who are most disadvantaged in our communities bearing the brunt of paying to maintain the natural gas infrastructure. So it’s really important that we and the utility programs target some of these interventions to disadvantaged communities and hard-to-reach communities so that they can also take advantage of electrification. And they won’t be all left paying the cost of maintaining the gas system.
HM: Right. So, if we want to pay attention to these low-income and disadvantaged communities, what is a good way to get them involved in decarbonization?
JL: Sure. So, you know, a component we haven’t touched on yet is workforce, and the workforce is a critical component to the Clean Energy Transition and decarbonization. We are going to need lots of workers out there who understand how to install heat pumps, or who understand how to install grid-connected resources, and just retrofit homes to make them more energy efficient. And so, what better way to bring along disadvantaged communities then to target workforce education and training programs to those communities. Because when they understand energy efficiency, and electrification and how this works, not only will they be applying it on the job, but they will also be applying it, you know, in their communities in their own homes. And so, by targeting workforce development programs in disadvantaged communities, it’s a great way to bring the message to them, help them understand what’s going on, and empower them to get involved.
HM: Okay, so doing like the training and getting, I guess, thinking of that the workforce, is the workforce that currently exists to install this equipment – are they prepared to be installing these heat pumps and this equipment? Or is it a new frontier that they haven’t done much yet?
JL: So, the workforce that we have right now, um… we don’t have enough workers, just plain and simple electricians, HVAC technicians, and plumbers, there just aren’t enough to do the work that we need to do. And I’m sure some of our listeners have experienced this when you need to hire a contractor, how long you need to wait until one is available. So, the current workforce that we have, we’ve got to add a lot of people and so these new people coming in, we can train them on heat pumps, and we can train them on renewable energy technologies, and get them added to the workforce. But we can’t forget about the workers that we currently have. Right now. You know, heat pumps are still unfamiliar to a vast majority of HVAC workers and plumbers. Even though heat pump technology has been around a while. They’re still largely unfamiliar with it. So, we need to upskill our current workforce so that they can learn about heat pumps, learn about the emerging technologies that are coming online, and then be prepared to install them and maintain them so that we can effectively electrify these buildings.
HM: That makes a lot of sense that you need, then that seems like targeting these under an unemployed population of the workforce education and training would really jumpstart that process to areas that need it most?
JL: Absolutely, yeah, we can target our education and training programs to the areas that have fewer workers than other areas. And yeah, we can be really strategic with how we develop that workforce.
HM: Yeah, absolutely. So, I just want to circle back to we talked a little bit about equity and the potential for perpetuating inequity and energy. One of the things that I know is pretty common in the utility space is the difference between renters and homeowners, or those people who are in single-family homes or in multi-unit dwellings, and the differences in the types of services and programs that they can participate in. Are we seeing a similar problem with this beneficial electrification task that we’re setting for utilities?
JL: Yeah, yeah. This is another good question. Right. We, so renters typically do face greater burdens, to electrifying their homes, because they’re not the people who make decisions around the expensive equipment. So that way, in this situation, it’s important that utility programs target the landlords, and make sure that they understand the benefits to their investment and to their assets if they were to electrify their homes. Also, you know, with renters, it really points to the importance of Codes and Standards. Because when a local government implements a reach code, you know, that then becomes the baseline that becomes the law. And any, any renters living in newly constructed homes or living in homes that have gone through retrofits recently, will be living in the homes that have this new standard applied to them. So, it’s really important that we support local governments that are enacting reach codes because that is one way that the benefits of building electrification reach renters.
HM: Right. I mean, and you’re talking to someone, I live in a multi-unit dwelling, and I’m a renter. And I can’t imagine at this point in time, purchasing a heat pump for the apartment that I’m not permanently living in. Are there any program designs or the programs that utilities are implementing, that you have noticed are really positively impacting the renter population when it comes to, say like, heat pumps or other beneficial electrification measures?
JL: So, one really exciting program that we see right now, it’s a pilot program in California, and it’s called ‘BUILD’. And it’s targeted at property developers who have affordable multifamily housing. And large, affordable housing buildings are pretty complex, and the systems are very large. And there needs to be lots of controls and connections. And so this is actually an area where we see the workforce lagging in their experience and knowledge and how to design systems for these very large buildings. So, what the BUILD program is doing in California is pairing property owners with design teams who understand how to do this equipment design. And so, this is a really exciting way that we’re able to electrify affordable housing and multifamily housing. And… yeah, stay tuned, because I think the first projects are just getting underway this year.
HM: Awesome. And so it seems like this BUILD program is then focusing on new construction. Is that correct?
JL: It is focused on new construction. Yeah.
HM: And so, I guess thinking of the people involved in the new construction and the developer, who is building – what would motivate a developer in that new construction market to have this upfront investment in heat pumps or beneficial electrification?
JL: Yeah, that’s a great question. So oftentimes, with affordable housing, the developer does hang on to the property for a long time, at least 10 years. And so, in these cases, that developer can sort of recoup some of the operating costs that come with having more highly efficient equipment. And so that can be an important motivator for them as they know, it’s worth the upfront investment if they’re going to be able to save on operating costs in the long term. A lot of affordable housing developers also, you know, have mission statements that are focused around improving the quality of life for their tenants. And so, they do care about the indoor air quality, and they do care about, you know, the comfort of the tenant. And so that’s why it’s so important to get rid of natural gas because the natural gas that are in the homes is a safety hazard. It’s combustible, and it contributes to poor indoor air quality. So those are some reasons why new construction affordable housing developers would want to electrify their buildings.
HM: Yeah, that makes a lot of sense. And do you see that new construction is more likely to have this equipment than say like the retrofit market and people who are replacing their HVAC systems or their stoves. Do you see it more in new construction than in the retrofit market?
JL: I don’t know if I’m seeing it more, but I can tell you that there are a lot more barriers to electrifying in the retrofit situation. Um, so you know, when you do a new construction building, you’re starting with a blank slate, and you can design everything from the ground up. And the thing about some of these electric systems is they can take up more space and more of the square footage of the building footprint. And so, when doing new construction, if you know you want to go electric and you know you want this equipment, you can accommodate that space and make it work. But on the retrofit side, sometimes you just don’t have the space. For instance, my water heater is packed into the… a corner of a closet in a spare bedroom. And I would not be able to change that to a heat pump water heater if I wanted to because there’s not enough airflow around it for the heat pump to work properly. So even if I’m educated and I understand and I can afford this thing, and I want it, the space constraints in my home won’t allow me to get it. And we see that it’s a huge barrier with the water heating side, you know, tankless water heaters, they can just be mounted on a wall, and then they don’t take up any square footage in your home. So, if a contractor offers you a heat pump water heater, now you need to devote space in your garage or in your basement to a water heater when you didn’t have to do that before. And then also on the HVAC side, sometimes we can see issues with the ductwork in retrofit scenarios, and it’s just not quite configured properly or sized properly for a heat pump. And then that adds additional costs. And the last thing I’ll mention another barrier in the retrofit situation is having enough electrical service to the home or having enough capacity in the electrical panel. If you were previously a dual-fuel home and some of your equipment was on natural gas, and you’re looking into these electrification technologies, having a panel upgrade or electric service upgrade is just an additional cost you might not have foreseen and it may not fit into your budget. And then that may prevent you from electrification. So even though it can be easier in new construction, I really want to make the point that we can’t give up on the retrofit scenario. Because there are so many existing homes out there and existing buildings that, you know, we as an industry need to target the retrofit scenario, target the existing building stock and identify solutions that will work.
HM: Okay. That makes sense. Yeah. So it seems like there are quite a few challenges and constraints in the retrofit market to electrifying the existing homes. But the potential, are you… do you think that the potential of those retrofit market outweighs the challenges?
JL: Absolutely. Yeah. It’s kind of like the low-income customers like we can’t forget about the existing building stock. There’s lots of them. Lots of people living in homes right now with gas appliances. And, you know, when that equipment fails, and they need to replace it we need to make sure that our contractors and the equipment and these programs are ready to incentivize consumers to go electric.
HM: That makes sense. Thank you so much for talking a little bit about the difference between the new construction market and the retrofitting of older buildings. And I also want to ask if you have any advice for our listeners about how they can help support the decarbonization effort?
JL: Yeah, absolutely. So… so, as a homeowner, yeah you might take into account, what is the age of my equipment, my water heater and my furnace if I have one. And you may even think about your roof too because we know that you’re not going to want to put solar panels on a roof that you’re going to have to replace in five years. So, if you have a relatively new roof, it’s a great time to add solar. And then when you get electric technologies, you can take advantage of that free solar energy that your PV system is producing. So those that’s a big project, no doubt, but you can think smaller and think about you know your stove. When you’re ready to replace that maybe look into induction. I know that a lot of programs have little loaner induction cooktops that are portable, and you can take it home and see how it works and see how you like it. And consider electrifying your cooking first. So yeah, I encourage everybody to take a look at their local utility website and see what sort of rebate and incentive programs are available for either adding clean, renewable energy, or electrifying the end-uses in their home.
HM: Awesome. Yeah, as someone who’s a renter, I think the induction cooktop would be a great first step in sort of the electrification process of your home if you’re not replacing HVAC or doing a new water heater at this time. So, like what types of programs are available through utilities to help incentivize and help individuals to make/take these steps towards decarbonization?
JL: Yeah, well, actually, luckily, there are a lot of different programs and a lot of different interventions that we can target. So, I’ve mentioned adding solar to take advantage of renewable energy. I’ve mentioned the water and space heating equipment of heat pumps that are electric and highly efficient. But one thing I haven’t mentioned, are controls. And this may be as simple as the thermostat on your wall. And so, you can program that to avoid using energy at peak times or even have it connected to the grid so that you don’t even have to pay any attention and it will lower, you know, or raise the temperature so you use less of your AC during those times. So yeah, there might be things also rate schedules, or different rate plans that charge you different amounts of money, depending on the time of day. So yeah, there’s lots of options out there for customers to look at equipment they can use. Look at devices they can use, look at how they spend their money, and the way they behave in their homes.
HM: All right. Um, so I think those were all the questions, is there anything else that you want to tell our listeners about decarbonization and beneficial electrification today?
JL: Earlier, I mentioned how important it is to think about when we’re using energy. So right now, it’s summertime, and it is hot, and it’s particularly hot in the afternoons and evenings. And this is when a lot of people are turning on their air conditioning to cool down. But when there’s a lot of demand on the grid, it’s more likely that the grid is going to have to turn to dirty energy sources to meet that demand. So, this points to the importance of avoiding usage of energy during times of peak demand. So, another thing a customer could do is consider enrolling in a demand response program that incentivizes the consumer for using less energy during these times of high demand. And then that way, we can lower the peak demand just a little bit; it lowers the likelihood that the utility will need to turn to dirty fuel sources. So that’s an important thing and it’s kind of a paradigm shift. Because, you know, we’ve always thought about how much we use, but now we need to start thinking about when we use energy because that will have huge impacts on how much carbon we’re using.
HM: Yeah, it makes a lot of sense. It’s almost like the dishwashers these days come where you can, like, put it on a certain timer when it should run. And so, using it at a different time, instead of right when you finished dinner or different things like that.
JL: Right! Yes, that’s a great example.
HM: Yeah, it sounds like there’s a lot that individuals can do to help decarbonize their homes, whether they’re renters, owners, or wherever they may be. Maybe they’re buying a new… a new home.
JL: Yeah, I think there’s so much that people can do in their lives to help support decarbonization, whether it’s referring somebody to a workforce and training program that might be talking about these types of topics, or taking advantage of a program offered by your utility, or even talking with somebody at a store about the equipment that’s available and asking if they sell heat pumps. You know, all these types of word-of-mouth things and getting people to talk about this is one way we’re going to get closer to decarbonizing our environment.
HM: Awesome. Well, thank you so much for talking us through sort of an introduction to decarbonization, and some of the key issues that we’re seeing when it comes to equity, new construction versus retrofitting, and all the different programs that are available to us. I really appreciate you taking the time, Jen.
JL: Yeah. Well, you had a lot of really excellent questions. And I think it points to just how multidisciplinary and multifaceted this topic is.
HM: Yeah, I’m looking forward to diving into some of these topics in more detail in the future podcasts of this series.
JL: Me too. Thank you very much.
HM: Thank you.