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Fossil fuels are on the way out, and electricity generated from clean, renewable sources will replace them as the future energy source. To make use of all of that clean electricity, though, we will need to electrify everything, including existing buildings that currently run on fossil fuels.

Electric replacements for fossil fuel appliances are far more efficient than the alternatives. But electrifying an existing home isn’t just about the rated efficiency of devices. As we discussed in a recent post, most people replace a furnace or water heater when it breaks, and their primary concern is to get their service restored quickly. Contractors are more than willing to sell an exact replacement, even if it locks the homeowner into another 15 to 20 years of dependency on natural gas or propane.

An even more significant barrier to electrifying older residential homes is the cost of upgrading the service panel.

Why Would Someone Want to Upgrade their Service Panel?

An electric service panel contains fuses or circuit breakers and is the gateway where electricity enters the home. Most modern homes have at least 200 amp panels. Many older homes have much less capacity.

When houses were built fifty or seventy-five years ago, 100 amps was plenty. Water and space heating, the two most significant loads in a home, relied on fossil fuel combustion. Oil-fired boilers, gas furnaces, and water heaters need little to no electricity to operate. Electricity was used primarily for lighting and other minor plug loads. Plug loads are basically anything you plug into an electrical socket.

One hundred amps may not be enough power to support a modern all-electric home. In addition to lack of capacity, people might decide to upgrade their panels for safety reasons or simply to have more physical space in the panel to install new circuit breakers.

Unfortunately, panel replacements are expensive. In an average-sized home, replacing the electric service panel can cost $3,500 to $6,000. Costs can escalate quickly, especially if your electricity is delivered to your home underground. I have heard quotes of $25,000 to $30,000 to replace feeder cables in underground applications. The cost of the line, the labor for trenching, and the new service panel get expensive quickly. There is no question that service panels are a barrier to electrification, especially with underground service.

Can Efficiency Replace a Panel Upgrade?

Many contractors and homeowners overlook the most logical alternative to upgrading an electric service panel, which is reducing the electrical loads in the home.

As I mentioned previously, space heating and water heating are the two most significant loads, followed by lighting and plug loads. Heat pump technology is very efficient. Heat pumps can easily replace furnaces for space heating and gas water heaters. They provide reliable service and are much more efficient than their gas counterparts. However, they still require electric circuits. Switching from gas appliances to electric heat pump technology may require increased panel size for greater capacity or physical space for new circuits.

If you reduce your heating load, however, you might be able to use a much smaller heating and cooling system. Improving the building envelope is the cornerstone of building performance and is a proven method to cut heating and cooling loads. Simple actions like upgrading windows, insulating walls, air sealing, and improving attic insulation will improve indoor air quality and comfort and reduce your heating and cooling bills.

How much can building envelope improvements reduce loads? You would be surprised. A very high-performing, average-sized home (1800-2000 square feet) can be heated or cooled with 1500 watts of power –about what a hairdryer or toaster uses!

Switching to an electric heat pump water heater is another load increase that can force panel upgrades. Even though electric heat pump water heaters are more efficient than gas, most require a 220v circuit for operation. In an older home, installing a heat pump water heater might require a panel upgrade.

However, the market is responding, and several manufacturers are working on 120v heat pump water heaters. If these water heaters use less than 900 watts, they can share an existing electrical outlet. So far, two manufacturers have brought products to the market that meet this specification, and others will soon follow. Pay attention to “120v retrofit ready” heat pump water heaters as they can reduce the need for a panel upgrade.

Another way to reduce your electric needs is by replacing your older electrical appliances with modern Energy Star rated appliances. Replace your refrigerator first, as it is often the third-largest electricity consumer in residential situations. You might consider a heat pump clothes dryer as an option. They are much more efficient than standard electric clothes dryers. Heat pump clothes dryers are very common in Europe and are slowly making their way into the domestic market.

Don’t forget lighting too. LEDs are the way to go when it comes to reducing lighting loads. There are a ton to choose from, they are affordable, and the quality has improved significantly over the years.

Considering an electric vehicle but don’t have the panel capacity for a 30 amp or 40 amp 220v circuit breaker for a charger? Several manufacturers now offer intelligent circuit controllers that allow your EV to share a circuit with another appliance. If you think about it, this approach makes a ton of sense. Why upgrade your panel if all you need is a circuit for charging your car?

Consider this: how often do you use your clothes dryer or oven? You can share a circuit to charge your EV with a smart controller. If you turn on the dryer or oven, the controller temporarily shuts off the EV charger and then resumes once the laundry is done. Load-sharing devices can be an effective alternative to panel upgrades.

Sometimes panel upgrades are needed not for capacity but for space to add more circuit breakers. An alternative is to add an electrical sub-panel. A sub-panel does not increase capacity but can create more room for additional circuit breakers. An example would be a sub-panel installed in the garage to provide breakers for a heat pump water heater, an electric vehicle charger, and a heat pump space heater. Sub-panels are a great way to create more space without replacing the primary panel.

Using energy efficiency to make the most of your existing capacity is a great way to support building electrification. Doing more with what you have is what efficiency is all about.

But even if you do decide to upgrade your panel, investing in electrical efficiency makes a lot of sense. There are all kinds of benefits to including energy efficiency in electrification efforts. Some are obvious. Many are secondary benefits, such as reducing peak load and eliminating the need to increase electrical infrastructure service to your neighborhood.

I believe that electrification and energy efficiency go hand-in-hand. Managing and reducing electrical loads can help avoid expensive panel upgrades. Reducing electric loads by considering efficiency should be a part of all electrification efforts.

Want to learn more about this topic? Check out this PG&E free, on-demand course that takes a deep dive into Home Electrification Retrofits Without Upsizing the Electric Panel.