Owners of new and existing homes in the Sacramento area can earn thousands of dollars in rebates from the Sacramento Municipal Utility District by relying exclusively on electricity instead of natural gas as part of programs aimed at reducing greenhouse gases in California's capital city.
"We've got very clean power, a high renewables percentage," said Owen Howlett, SMUD's project manager for energy strategy, research and development. "The state currently is at 30%" renewables, "and we're around the same, while our power mix is about 50% non-carbon-emitting, thanks to our hydro power generation. "
SMUD was the first large California utility to have 20% of its power come from resources classified as renewable by the state.
Now, SMUD is offering electrification rebates worth up to $5,000 for new homes and up to $13,750 for existing homes that convert from gas to electricity in a program likely to run for years.
Scott Blunk, strategic planner for electrification and energy efficiency for the district, estimates all of SMUD's electrification programs together would cost about $10 million to $20 million over the next five to 10 years.
SMUD is striving to meet California's aggressive statewide greenhouse gas reduction goal of 80% by 2050, and strategies like electrification would certainly help, he said.
"We're hoping to fill the gap over time with local and state policy," he added.
SMUD has committed to hit a 90% reduction in greenhouse gas emissions by mid-century.
The programs feature a variety of appliances homeowners can install to qualify for the incentives. For example, replacing an existing gas furnace by installing an electric heat pump space heater can earn a $4,500 incentive. Substituting an electric heat pump water heater for an existing gas water heater can fetch a $3,000 rebate. The program continues to offer rebates for traditional efficiency measures such as air sealing, insulation, and windows.
"The incentives offered, we feel, are neutral to our rate case," Howlett said.
Customers can gain additional savings by allowing SMUD to control their water heater as a “thermal battery” to smooth power fluctuations on the grid. For the retrofit program, "Our medium-term goal is to get 2,000 thermal storage water heaters installed a year," Howlett said.
The new home construction program took effect in March, with the existing home retrofit program starting May 14 and an energy efficiency program beginning around June 15.
"Since June 1, I think we've had 30 people through the program, converting from gas to electricity," he said. "In previous years," prior to the rebates, "it was maybe five people."
Switching to electricity is not a zero-sum game for homeowners, according to SMUD. "For the homeowner, there should definitely be bill savings," Howlett said, because the district "has very cheap power." It averages 13.8 cents/kWh for residential customers, lower than California's average 16.08 cents/kWh.
A homeowner with an all-electric home in SMUD's service area, which includes all of Sacramento and a few surrounding small towns, can typically save $100 to $300 a year on heating, and $150 a year on water heating, as opposed to relying on gas, Howlett estimated. Each customer’s savings will depend on the specifics of the home and how they operate their home.
In all, SMUD serves about 660,000 residential customers.
SMUD has no plans to "sunset" the electrification programs. "What we've done on both residential retrofits and new residential construction," he said, "is we've integrated the electrification element into our general programs."