Sign In or Create an Account.

By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy

Economy

The $2 Billion Plan to Electrify American Homes

Power Forward Communities wants you to have a heat pump.

A heat pump installer.
Heatmap Illustration/Getty Images

Getting fossil fuels out of your home is really hard. You have to find a contractor, ideally one who supports electrification and doesn’t ask why you won’t just stick with natural gas. You have to coordinate between multiple trades — electricians, plumbers, HVAC professionals — as well as lenders and utilities and permitting authorities, most of whom don’t talk to each other. You have to navigate a confusing array of finance options and incentives. You might be left feeling defeated, unable to afford the high up-front costs and unable to secure low-cost loans. And if you’re a renter, all you can do is dream.

These are not easy problems to solve. But a new initiative called Power Forward Communities has a pioneering plan to simplify the process all over the country — and it just got $2 billion to get started.

The money is part of the $20 billion the Biden administration awarded on Thursday via the Greenhouse Gas Reduction Fund, a program approved as part of the Inflation Reduction Act to provide low-cost financing options for consumers, communities, and businesses to transition to clean energy and adapt to climate change.

Power Forward Communities is made up of five core partner organizations — Rewiring America, Enterprise Community Partners, Local Initiatives Support Corporation, Habitat for Humanity, and United Way Worldwide — who will work with communities, government agencies, unions, and housing developers to decarbonize hundreds of thousands of homes and apartments between now and 2031. The coalition has committed to invest at least 75% of the financing in projects in low-income and disadvantaged communities.

That all starts with a four point plan.

First, reduce friction by creating online tools and providing community-level assistance to help homeowners navigate the decarbonization process. Rewiring America is already part of the way there with its “personal electrification planner,” which provides a rough estimate of the upfront cost, annual bill savings, and expected emissions reductions for any given project. Soon, the group will pair that with another, first-of-its-kind tool: a dataset of every electrification incentive in the country. Eventually you’ll be able to plug in your address and income and get a list of all of the programs available to help you pay for your project.

Second, invest in workforce development and create a “contractor marketplace” where building owners can go to find vetted partners for their project.

Third, create new low-cost financial products to help bridge the gap between existing incentives and project costs. Notably, Power Forward plans to allocate more than half of its loans to projects in multifamily buildings, as these buildings tend to serve renters with lower incomes, and decarbonizing them is much more capital-intensive.

The details of the finance aspect of the program are subject to change, but the group’s application for the Greenhouse Gas Reduction Fund proposes an energy efficiency loan for apartment building owners who want to make minor upgrades, which would offer an average of $30,000 per building with a 10- to 20-year term and 1% to 3% interest rate. As part of this program, Power Forward would also work with the building owner to make a plan to fully decarbonize the building down the line, and issue grants to fund the planning process. A proposed “net-zero rehab permanent loan,” meanwhile, would provide financing for full retrofits at an average of $120,000 per building.

Meanwhile, the finance options for single-family homes could be tied to predetermined “packages” of decarbonization measures that homeowners can choose from. This brings me to the fourth, and what I see as the most interesting and innovative part of the plan: the aggregation of demand.

Part of why electrification is so difficult and expensive is that it’s a bespoke process. Some buildings might need insulation, others might need electrical upgrades. Some might require new ductwork for central heat pumps, while others might be better off installing mini-split heat pumps in every zone of the house. There’s no one-size-fits-all solution.

“How do we unlock economies of scale and create an offering that could serve as many households at once?,” Nicole Staple, the head of market partnerships at Rewiring America, posed rhetorically to me in February. “That has historically been incredibly challenging given there's so much customization to heat pump design.”

But there are buildings with similar needs. If there were a way to identify them and then group the jobs together, you could start to solve a surprising number of other challenges. “That's where I think you unlock a lot of speed in [electrifying] full communities,” said Staple.

The most obvious benefit would be lowering the cost of equipment by buying in bulk. You could give suppliers better visibility into demand so they could stock up accordingly. You could help contractors plan ahead and space out jobs so that they have guaranteed work during the shoulder seasons. You could create new markets for union labor, which have historically been shut out from residential work due to the small size of the contracts and high customer acquisition costs. You could pool loans to diversify risk. You could design more effective policies to wind down the natural gas system.

The standardized packages Power Forward plans to offer will enable the group to “pre-define pricing and financial product offers, streamline underwriting and installation, and reduce financing costs,” according to its funding application. It estimates that by aggregating demand, it can reduce the remaining costs of electrification after incentives by as much as 50%.

The application also said the group has obtained letters of commitment from supply chain participants, including Home Depot and Mitsubishi, to lower equipment costs. In return, the coalition will reserve an initial $125 million over the first three years of the program as an insurance pool to guarantee $1 billion in sales volume for select partners.

To unlock all this magical potential, Rewiring America has been working on a large-scale data model to identify homes with similar characteristics, which will in turn help it figure out where there is opportunity to bundle projects in different parts of the country.

The group has also been gathering information and testing out assumptions on what will ultimately lower the costs of equipment and installation in a series of pilot projects, starting with one in the rural, mostly Black community of DeSoto, Georgia, where “107 households survive on a median income of $20,375, grapple with repeated house fires linked to propane gas usage, and strain to pay utility bills,” according to Power Forward’s application.

When I spoke to Staple a couple of months ago, she told me that about 75 households in DeSoto had expressed interest in the program thus far. Each participant would get at least one piece of equipment — a heat pump space heating system or a water heater, for example — fully subsidized. They would also be eligible for electrical upgrades or weatherization improvements as needed.

“Many of the households have not had cooling. Some have had their HVAC systems broken for literally decades,” Staple told me. “There's lots of dimensions of that community that we think help us understand how carefully we need to manage electrification projects, considering the ways that these communities have been failed.”

Power Forward had initially requested $9.5 billion to implement its plans, so it will have to go back to the drawing board over the next few months to map out what it can achieve with the $2 billion it was given. What could it have accomplished with that additional $7.5 billion?

“Our mission is to create hundreds of DeSotos, and ultimately decarbonize housing across the nation,” the coalition’s application says.

Green

You’re out of free articles.

Subscribe today to experience Heatmap’s expert analysis 
of climate change, clean energy, and sustainability.
To continue reading
Create a free account or sign in to unlock more free articles.
or
Please enter an email address
By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy
Adaptation

The ‘Buffer’ That Can Protect a Town from Wildfires

Paradise, California, is snatching up high-risk properties to create a defensive perimeter and prevent the town from burning again.

Homes as a wildfire buffer.
Heatmap Illustration/Getty Images

The 2018 Camp Fire was the deadliest wildfire in California’s history, wiping out 90% of the structures in the mountain town of Paradise and killing at least 85 people in a matter of hours. Investigations afterward found that Paradise’s town planners had ignored warnings of the fire risk to its residents and forgone common-sense preparations that would have saved lives. In the years since, the Camp Fire has consequently become a cautionary tale for similar communities in high-risk wildfire areas — places like Chinese Camp, a small historic landmark in the Sierra Nevada foothills that dramatically burned to the ground last week as part of the nearly 14,000-acre TCU September Lightning Complex.

More recently, Paradise has also become a model for how a town can rebuild wisely after a wildfire. At least some of that is due to the work of Dan Efseaff, the director of the Paradise Recreation and Park District, who has launched a program to identify and acquire some of the highest-risk, hardest-to-access properties in the Camp Fire burn scar. Though he has a limited total operating budget of around $5.5 million and relies heavily on the charity of local property owners (he’s currently in the process of applying for a $15 million grant with a $5 million match for the program) Efseaff has nevertheless managed to build the beginning of a defensible buffer of managed parkland around Paradise that could potentially buy the town time in the case of a future wildfire.

Keep reading...Show less
Spotlight

How the Tax Bill Is Empowering Anti-Renewables Activists

A war of attrition is now turning in opponents’ favor.

Massachusetts and solar panels.
Heatmap Illustration/Library of Congress, Getty Images

A solar developer’s defeat in Massachusetts last week reveals just how much stronger project opponents are on the battlefield after the de facto repeal of the Inflation Reduction Act.

Last week, solar developer PureSky pulled five projects under development around the western Massachusetts town of Shutesbury. PureSky’s facilities had been in the works for years and would together represent what the developer has claimed would be one of the state’s largest solar projects thus far. In a statement, the company laid blame on “broader policy and regulatory headwinds,” including the state’s existing renewables incentives not keeping pace with rising costs and “federal policy updates,” which PureSky said were “making it harder to finance projects like those proposed near Shutesbury.”

Keep reading...Show less
Yellow
Hotspots

The Midwest Is Becoming Even Tougher for Solar Projects

And more on the week’s most important conflicts around renewables.

The United States.
Heatmap Illustration/Getty Images

1. Wells County, Indiana – One of the nation’s most at-risk solar projects may now be prompting a full on moratorium.

  • Late last week, this county was teed up to potentially advance a new restrictive solar ordinance that would’ve cut off zoning access for large-scale facilities. That’s obviously bad for developers. But it would’ve still allowed solar facilities up to 50 acres and grandfathered in projects that had previously signed agreements with local officials.
  • However, solar opponents swamped the county Area Planning Commission meeting to decide on the ordinance, turning it into an over four-hour display in which many requested in public comments to outright ban solar projects entirely without a grandfathering clause.
  • It’s clear part of the opposition is inflamed over the EDF Paddlefish Solar project, which we ranked last year as one of the nation’s top imperiled renewables facilities in progress. The project has already resulted in a moratorium in another county, Huntington.
  • Although the Paddlefish project is not unique in its risks, it is what we view as a bellwether for the future of solar development in farming communities, as the Fort Wayne-adjacent county is a picturesque display of many areas across the United States. Pro-renewables advocates have sought to tamp down opposition with tactics such as a direct text messaging campaign, which I previously scooped last week.
  • Yet despite the counter-communications, momentum is heading in the other direction. At the meeting, officials ultimately decided to punt a decision to next month so they could edit their draft ordinance to assuage aggrieved residents.
  • Also worth noting: anyone could see from Heatmap Pro data that this county would be an incredibly difficult fight for a solar developer. Despite a slim majority of local support for renewable energy, the county has a nearly 100% opposition risk rating, due in no small part to its large agricultural workforce and MAGA leanings.

2. Clark County, Ohio – Another Ohio county has significantly restricted renewable energy development, this time with big political implications.

Keep reading...Show less
Yellow