Ditching your gas appliances for electric ones comes with a host of benefits. That process, called home electrification, can be done in one huge renovation or as one or two affordable projects at a time.
Energy-efficient appliances paired with home solar panels can maximize your monthly energy savings and your home’s energy independence. Modern home electrification can also give you a healthier, safer, and cleaner home to enjoy. Here’s how electrifying your home, all at once or a bit at a time, may make sense.
See how much you can save with home energy changes
What Is Home Electrification?
Before we get started, let’s define what it means to electrify your home.
Electrifying your home, or home electrification, means replacing any gas-powered device such as a gas furnace or gas water heater, with a zero-emissions electric alternative that often performs better, is safer, runs on cleaner energy, and can be much cheaper to operate. Home electrification is all about finding alternatives to fossil fuel-powered appliances.
As of 2020, just over a quarter of the homes in the United States are fully electric.
Common Appliance Replacements for Home Electrification
In addition to electricity, many American homes have a natural gas line to power home appliances for cooking, space heating, water heating, and more. But, electric alternatives can do the same job (often better) and provide additional benefits as well.
Heating and cooling systems
Heat pumps are among the most popular electrical heating and cooling systems installed in US homes today. Heat pumps can replace gas furnaces and air conditioners simultaneously, in one energy-efficient and environmentally-friendly appliance.
Other electric options for heating include electric furnaces and baseboard heaters, though these are much less efficient (and will cost more to run) than heat pumps.
Water heaters
Water heating accounts for roughly 20% of residential energy use in the US, with people all over the country utilizing natural gas, electricity, and other sources of power to heat their home’s water.
An electric water heater, such as a heat pump water heater, is a great gas water heater alternative. Heat pumps use electricity to move the warmth from the surrounding air or the ground into your hot water tank, and can be powered by solar to keep operating costs low and emission-free.
Oven, stove, and cooking
Today, there is a wide range of induction stoves, ovens, and cooktop options from most major appliance brands, and they often have the same benefits as gas-powered stoves (quick heat-up times, fast water boiling, and the ability to instantly stop producing heat) without the drawbacks of burning natural gas such as indoor air pollution from emissions like carbon monoxide.
Dryers
Although cooking, space heating, and hot water systems are the three most common electrification upgrades, you may also find opportunities to electrify your life on the other parts of your property.
In the laundry room, if you have a gas-powered dryer, substituting that appliance for an efficient electric dryer is fairly easy, with a straightforward installation and a wide range of price options.
Vehicles
Although technically not a home appliance, electric vehicles are one of the most important aspects to home electrification in the US.
With fewer trips to the gas station and instead charging an EV at home, you can shift your spending from gasoline to electricity instantly. To save more on monthly utility bills, changing an EV with solar panels is a great way to electrify your life without running up your bills.
Battery storage
Battery backup with a home solar system isn’t a requirement for home electrification, but it can help you power more of your home with your solar system, increasing your solar savings.
Solar battery power can provide clean, electric backup power. In a disaster or severe weather, with solar panels and battery backup, you’ll be able to power essential devices and store solar electricity when the sun is out.
See how much you can save with home energy changes
Pros and Cons of Home Electrification
As with all home upgrades, electrification can be an intimidating undertaking. While you may be interested in reducing your carbon emissions or cleaning up the air in your home, it is completely natural to consider your budget.
Here are the primary benefits and drawbacks of home electrification.
Pros
- Opportunity for a smaller carbon footprint
- Easily integrated with solar panels
- Reduces or eliminates gas bill
- Can improve indoor air quality and reduce associated health risks
- Many federal and local incentives are available
- Can be safer than gas appliances
- Battery backup storage provides backup power and increased savings with solar
Cons
- Can be more expensive upfront
- Increases home electricity consumption
- Some incentives could be undone by legislation
- Payback periods vary between appliances
Common Challenges With Electrifying Your Home
The most common challenge with home electrification is usually retrofitting. Removing and replacing old appliances is not always as easy as it sounds. Homes built around gas-powered systems can incur some unexpected costs while safely dismantling old parts or modifying a home to install new systems.
When adding new electrical appliances, old homes may also need to have their main electric panel upgraded to accommodate the larger power loads. If necessary, an electric panel upgrade can add an average of just over $1,000 to a home electrification project.
How Much Will it Cost to Electrify My Home?
Speaking of total electrification costs, we suggest starting with a full-home energy audit, which may run a few hundred dollars. Having an expert design a solution for you may be the best way to electrify efficiently all at once, or over a long period of time as appliances age and break.
Based on a study from the National Association of Home Builders, the average cost to fully electrify a home in the US is $3,988-$15,100 in major metropolitan areas like Baltimore, Houston, Denver, and Minneapolis.
If you’ve said to yourself, “It’s time to electrify my home,” keep in mind the costs are going to vary as they specifically relate to your unique property. While some homes require only one or two upgrades, the total cost to purchase and retrofit major appliances will depend on the size of the components needed to meet the energy demand of your home.
In general, heat pumps and water heater upgrades are the most expensive appliances to replace while electrifying your home, costing up to $9,000 for large systems. Beyond heating and air, you can expect to also spend around $1,000 for an induction stove, or around $600 for a Level 2 electric vehicle charging station.
Credit: eia.gov
Available rebates and incentives
Note: The tax credits and other incentives discussed below are being reconsidered by Congress in 2025 and funding for the rebates discussed has been frozen. Legislation can change. As always, consult your tax advisor about your eligibility for incentives before counting on them..
Alongside tax incentives for solar energy and storage, the Inflation Reduction Act of 2022 enacted a few federally available tax credits and rebates for home electrification in the US.
With a qualified update, taxpayers can receive tax credits up to $2,000 for a heat pump or heat pump water heater and up to $1,200 for energy efficient windows, doors, insulation, energy audits, and more.
The act also provided funding for rebates of up to $8,000 on individual home electrification purchases like heat pumps, electric appliances, and wiring upgrades, through Sept. 30, 2031, depending on the rules laid out by the states, which administer the rebate programs.
Critically, households adopting high-demand electrification efforts for solar energy, battery storage, or EV charging can save up to $4,000 on panel upgrades to accommodate the increased energy demand.
(Funding for these federal rebate programs is frozen as of this writing, and doesn’t appear likely to return. Consult a tax professional about your eligibility for credits.)
Bottom Line: Should You Electrify Your Home?
If you’re considering home electrification, it’s a pretty good sign your answer is already going to be yes.
Although many people choose to do it all at once with new construction, you might opt to go appliance by appliance.
By electrifying now, homeowners can decrease air quality risks, lower their property's carbon footprint, and reduce their energy bills, especially with home solar panels. Together, electrification and home solar power gives homeowners the most control over the source and cost of the energy consumed on their property.
You can learn more about your property and your potential savings by using our solar savings calculator and our home energy advisor page.
See how much you can save with home energy changes
Frequently Asked Questions
What is home electrification?
Home electrification is removing gas-powered appliances or systems for cooking, water heating, and home heating and cooling, and going to electric alternatives. This can save money on utility bills — including having no gas bill — and improve a home’s convenience, comfort, and safety.
Do heat pumps work everywhere?
Modern heat pumps work in many more climates and regions than older heat pumps. Cold climate heat pumps are tested to work at full efficiency down to five degrees Fahrenheit or colder, and can keep a home warm well below that. Heat pumps are used and reliable in all 50 US states.
Are there rebates for heat pumps?
New heat pumps may qualify for multiple rebates, tax credits, and other incentives. Approved energy-efficient heat pumps qualify for a 30% federal income tax credit up to a $2,000 credit.
Disclaimer: This content is for educational purposes only. Palmetto does not provide tax, legal, or accounting advice. Please consult your own tax, legal, and accounting advisors.
Andrew GiermakWriter and EditorAndrew joined Palmetto in Charlotte in August 2024. He’s been a writer in journalism, then in business, going back to almost the 20th century. He’s lived in Indiana, Virginia, Pennsylvania, Virginia again, and now North Carolina for the last 12 years. He likes golf. Is he good at it? Not so much.
