Achieving equitable space heating electrification: A case study of Los Angeles

Abstract

A major step towards residential building decarbonization is the electrification of natural gas space heating. Current inequities such as limited access to cooling technologies and high energy burden can be addressed in transition if we take steps now to understand the economic impacts of different electric technologies. This study presents a novel high-resolution techno-economic model, the Marginal Net Present Value Upgrade Analysis model, which improves upon existing literature that examines the economics of electrifying space heating through a more detailed cost calculation and the use of a variable discount rate. Results show that 1) electrifying with heat pumps is only recommended for owners who are replacing a natural gas furnace and central AC system, 2) renters are highly vulnerable in this transition in that electric resistance technologies are the least capital intensive technology for landlords to install, with renters bearing the increased operational cost, 3) rebates from the Inflation Reduction Act of 2022 allow most qualifying landlords and owners to install even the highest efficiency heat pumps at a net savings when compared to the baseline heating and cooling system, and 4) reducing capital costs are more critical than altering utility rates to achieve high heat pump penetration. The model developed herein can support decision-making related to electrification and energy efficiency policy and rulemaking and will give insight into the impact residential building electrification can have on marginalized communities.