# Home electrification Electricity is a scalable and cost-effective way to power appliances, heating and cooling systems, and e-bikes and e-vehicles, without emitting CO2 and methane. Electrifying a home brings improvements in indoor air quality, reduces fire risk, and lowers energy costs. ## Financial incentives ### Grants - *This program is without funding (Oct. 2023 and still the case in August 2024)* The City of Chicago has a $3 million grant program to pay for some soft costs and lend on hard costs for property owners who want to build an ADU (both interior and backyard house types). [Neighborhood Housing Services is administering this program](https://nhschicago.org/fix/grant-programs/adurepairs). - Northwest Home Equity Assurance Program. Homeowners [in this area](https://www.chicagocityscape.com/place/chicagohomeequityassurance-northwest) can take out special loans at low interest rates to pay for renovations, including the addition of an interior ADU – [learn more](https://nwheap.com/). - [Chicago Climate Infrastructure Fund](https://www.chicago.gov/city/en/sites/dpd-recovery-plan/home/climate-infrastructure-fund.html). For non-residential building owners and tenants. - Inflation Reduction Act. Read more below. ### Electrification assistance _These electrification assistance programs apply to ADUs and non-ADUs_ - ComEd's **electric homes** program. Receive up to $5,000 per electrified unit, in addition to any other rebates for energy efficient appliances, when building a new or additional dwelling unit to [ComEd's electric homes program standard](https://www.comed.com/WaysToSave/ForYourBusiness/Pages/CaseStudies/ElectricHomes.aspx). ([Read about a 15-unit apartment building that received the ComEd Electric Homes incentive](https://chicagocityscape.ngrok.io/blog/an-all-electric-apartment-building-opens-on-the-near-west-side-4f48460fd2).) - ComEd's **appliance rebate** program. Replace appliances with electric versions (like a clothes dryer) or higher-efficiency models (like a clothes washer) and [receive a rebate](https://www.comed.com/WaysToSave/ForYourHome/Pages/ApplianceRebates.aspx)from ComEd. There are also [rebates to upgrade or replace](https://www.comed.com/WaysToSave/ForYourHome/Pages/HeatingCoolingRebates.aspx) HVAC (heating and cooling) systems. - The **Inflation Reduction Act** (IRA) through its High-Efficiency Electric Home Rebate Act (HEEHRA) provides significant tax credits and rebates for multiple degrees of home electrification, including replacing appliances, replacing mechanical and electrical systems, and upgrading wiring to support appliances that have a higher electrical load. Rewiring America has [the highlights](https://www.rewiringamerica.org/policy/high-efficiency-electric-home-rebate-act) and a chart of [benefits available to property owners](https://content.rewiringamerica.org/reports/IRA%20Benefits%20to%20Disadvantaged%20Communities.pdf) (PDF). Read more about the IRA in the next section. - The U.S. Treasury has [IRA guidance for multifamily builders](https://home.treasury.gov/news/featured-stories/the-inflation-reduction-act-benefits-for-builders-of-multifamily-housing) (published October 2023). ![[adu_electrification.jpg]] *A 2023 new construction coach house in Lakeview is all-electric; top photo: a Mitsubishi heat pump is in the lower-left corner of the top photo; bottom-left photo: hybrid heat pump water heater; a Mitsubishi air handler that blows air over the refrigerant line from the outdoor heat pump; bottom-right photo: a Panasonic energy recovery ventilator (ERV).* ### Stories of people who electrified - A family in Oak Park documented everything about the [deep retrofit of their house](https://derekeder.com/blog/electrifying-our-old-oak-park-home-heat-pumps). - [Follow the de la Fleur family](https://blog.delafleur.com/) as they perform a deep energy retrofit of a classic Chicago graystone. - To retrofit the 333,821 1-4 unit houses that can achieve 50 percent or greater energy savings by 2035, we need to retrofit ~30,000 buildings per year. _See Elevate's study links below_. ### For renters and low-income households - Policy discussion: [How renters can electrify their homes](https://www.theverge.com/2023/11/14/23951104/apartment-rent-electrify-appliance-pollution-incentives) (published November 2023) - a low-cost first step can be to purchase a portable induction cooktop. - In 2024, the City of Chicago will launch a program to do deep retrofits of 200-300 homes, at no cost. The program is called [Residential Housing Decarbonization and Retrofits](https://www.chicago.gov/city/en/depts/doh/supp_info/residential-housing-decarbonization-and-retrofits.html). #### Elevate's "Chicago Retrofit Roadmap" Elevate (formerly known as Elevate Energy) conducted a study called the [Chicago Retrofit Roadmap](https://www.elevatenp.org/climate/cutting-chicagos-carbon-emissions-through-deep-home-retrofits/) that looked at the types of houses in Chicago and the process to retrofit them, how much it would cost, and what the savings gain would be for each type of house based on the scope of the retrofit. There are several resources (as PDFs) that Elevate created based on this study: - [The study: "Rapid Deployment of Energy Upgrades Through a Community-Scale Approach: Leveraging Partnerships to Achieve Equitable Clean Energy Goals"](https://chicagocityscape.ngrok.io/uploads/elevate_1_Rapid-Deployment-of-Energy-Upgrades-Through-Community-Scale.pdf). - [Presentation 1; of the study by the authors](https://chicagocityscape.ngrok.io/uploads/elevate_2_bto-peer-2023-16402-chic-elevate-kotewa.pdf) - [Presentation 2; to the Chicago Building Decarbonization Working Group](https://chicagocityscape.ngrok.io/uploads/elevate_3_Rapid-Deployment-of-Energy-Upgrades-Through-Community-Presentation.pdf) - recommended ➡️ [Summary of the study](https://chicagocityscape.ngrok.io/uploads/elevate_4_Achieving-50-Energy-Savings-in-Chicago-Homes.pdf) ### Inflation Reduction Act (IRA) tax credits There is an annual aggregate cap on the amount of tax credits a taxpayer can claim. There is also a maximum value for each appliance type. It may be advantageous to spread some appliance purchases over multiple years, but it also depends on the cost of each appliance as only a portion of the cost of the appliance and its installation is subject to the tax credit. From Energy Star: "The overall total limit for an efficiency tax credit in one year is $3,200. This breaks down to a total limit of $1,200 for any combination of home envelope improvements (windows/doors/skylights, insulation, electrical) plus furnaces, boilers and central air conditioners. Any combination of heat pumps, heat pump water heaters and biomass stoves/boilers are subject to an annual total limit of $2,000." [[Finding contractors for home electrification|Learn how to find a contractor to install heat pumps]] ![[0E10727C-2C45-4E1E-8891-F180B387AE0B_1_105_c.jpeg]] *Photo of three Mitsubishi heat pumps (providing heating and cooling) on the roof of a new construction three-flat in Pilsen.* #### Understanding available tax credits Links below go to appliance-type specific webpages on the [Energy Star website](https://www.energystar.gov/about/federal_tax_credits/non_business_energy_property_tax_credits), where there is information about what's covered by each tax credit, product choices, and additional rebates. - [Air source heat pumps](https://www.energystar.gov/about/federal_tax_credits/air_source_heat_pumps) (most common type, compared to geothermal) - [Heat pump water heaters](https://www.energystar.gov/about/federal_tax_credits/water_heaters_non_solar) (drop-in replacement for gas-powered water heaters) - [Electrical panel upgrade](https://www.energystar.gov/about/federal_tax_credits/electric_panel_upgrade) (this will be necessary for installation of some appliances) - [Insulation](https://www.energystar.gov/about/federal_tax_credits/insulation) - [Windows](https://www.energystar.gov/about/federal_tax_credits/windows_skylights) (must meet ENERGY STAR Most Efficient criteria) ### Incentives for residential operators - There are also tax credits for [residential builders](https://www.energystar.gov/about/federal_tax_credits/federal_tax_credit_archives/tax_credits_home_builders) and [commercial building owners](https://www.energystar.gov/about/federal_tax_credits/tax_credits_commercial_buildings) - The U.S. Treasury published [IRA guidance for multifamily building owners](https://home.treasury.gov/news/featured-stories/the-inflation-reduction-act-benefits-for-builders-of-multifamily-housing) in October 2023. - In Chicago, and in some other jurisdictions, there is a [PACE financing mechanism](https://www.chicagopace.org/) which funds electrification upgrades paid back by an additional property tax levy on your property. ### Notes on financial incentives 1. Induction stoves are not covered by the Inflation Reduction Act tax credits. Induction stoves require a higher-energy circuit than are built into most people's homes; this upgrade will cost at least $750, which may be covered by the tax credits (see "electrical panel upgrade" above). Not ready to spend that? Buy a portable induction cooktop that can cook one or two pans, and reduce your gas usage and improve your indoor air quality. [ComEd offers a $100 rebate](https://comedappliancerebates.com/) for induction stoves and other rebates for other home appliances. 2. As part of the 2022 Energy Transformation Code, as of January 1, 2023, any new Chicago residence that is built to have gas-powered appliances, excluding HVAC,  [must also have electrical infrastructure](https://www.map-strategies.com/blog/2022/12/1/chicagos-new-energy-conservation-code-means-big-changes-to-design-of-most-new-construction-buildings) to support a swap to electrical-powered appliances. In some cases it may be advantageous for the builder to build all-electric rather than build two systems. Find the new code in the Chicago Building Code, sections [14N-C1](https://codelibrary.amlegal.com/codes/chicago/latest/chicago_il/0-0-0-2673119) for commercial buildings and [14N-R1](https://codelibrary.amlegal.com/codes/chicago/latest/chicago_il/0-0-0-2673345) for residential buildings # Related articles - [[Finding contractors for home electrification]] - [[ADU funding & financing]] - [[Climate change]] - [[Buy an electric home]]