Incentives for electrification of low-income homes

Background

There are a lot of reasons why electric heat pumps are better than gas or oil for heating a home: they are more efficient, they have a lower lifetime cost, they can cool as well as heat, they are less pollutant, and they do not require use of our aging gas infrastructure. There are also reasons why this technology is often out of reach for lower income households.

For those who are renting, the landlord is responsible for choosing and owns the heating equipment. If, as is common, the tenant is responsible for paying utility bills, the landlord has no incentive for providing efficient up-to-date equipment. More efficient equipment typically costs more upfront, with savings recouped over time from lower utility costs. The landlord has an incentive to buy the cheapest possible heating equipment, even though this will cause higher costs for the tenant. This often results in tenants paying a high proportion of their earnings to utilities than those that own their residence.

For homeowners, particularly those on a fixed income, it may not be possible for them to pay the higher upfront cost of more efficient heating equipment. This is particularly likely when there is little to no warning that they will need to make a replacement; for example, on the first cold day in winter when the furnace won't turn on.

Seattle needs to identify a progressive revenue source for incentives to help bridge the cost between a gas furnace and an electric heat pump so that when a gas system needs to be replaced it will be with a heat pump.

Current Policies

Seattle approved a $200,000 pilot program as part of the 2021 budget to help low-income people electrify their homes. It will be managed as part of the Weatherization program in the Dept. of Housing. The current plan is that when the JumpStart funding is available after next year, about $20 million per year will go to this program. The governor has proposed a large increase in funding for low-income weatherization programs. We need to support this and push for it to include electrification of heating as well.