How Much Does It Cost to Electrify Your Home Completely?

There are a number of reasons to want to switch to electric appliances, HVAC and battery backup systems, like saving money on energy bills, improving home comfort and air quality, reducing our carbon footprints and making our homes more resilient to power outages. And those benefits are great.

Even just with climate change, “the decisions we make in our households are responsible for 42 percent of energy–related greenhouse gas emissions, from the way we heat and cool our homes, heat our water, how we cook and how we get from one place to another,” says Alex Amend, Director of Communications at Rewiring America.

But the price tag can be daunting. It can cost tens of thousands of dollars to fully electrify a house.

So, is all of the hassle actually worth it? Here’s what to know about the costs and benefits of switching to all-electric in your home.

What Does It Mean To Electrify a Home?

Electrifying a home means replacing appliances and systems that burn fossil fuels (like natural gas and propane) with ones powered by electricity. Those include:

• Heating and cooling systems
• Water heaters
• Clothes dryers
• Stoves and ranges
• The house’s overall power supply (to remove it from a grid that uses fossil fuels)
• EVs and EV chargers

Switching to all-electric is also a good opportunity to weatherize homes better to maximize energy savings and to add rooftop solar or review renewable options with your utility or community solar provider.

“To me, electrifying a home means identifying areas in your home where electricity is being inefficiently used and addressing them,” says Rodriguez.

What Are the Steps To Create an All-Electric Home?

Prioritize

“Understand where the most value comes from,” says Rodriguez. “Is it your lights? Your fridge? Your water heater? Then make a plan to tackle those.”

For example, if clean air is your highest priority, begin by replacing your gas stove with an induction model, and your gas heater with a heat pump, says Amend. “Also think about the useful life of each appliance, and plan to start with older machines first. And then think about the amps coming into your panel box and if you will need any upgrades to support the all-electric plan.”

Create a Budget

Fully electrifying your home is expensive, and most people can’t do it all at once. So consider your budget and what rebates and incentives are available to defray costs.

“Most everyone, including me, is not going to be able to afford to do this all at once,” says Amend. “It might make more sense to replace whatever appliance is aging out, before it dies, with a better electric version, since you’d have to buy a new one anyway. A home is a big investment and you should take the same level of planning and care you’d have for other home improvement projects. These are machines we rely on every single day!”

Weatherize Your Home

Weatherizing a home, aka winterizing or weatherproofing, means protecting your home from outside elements through steps such as sealing up cracks, adding insulation and replacing old windows. Weatherizing is often affordable, plus makes a big impact on energy savings.

To find out what steps make the most sense for your home, get an energy audit before you begin installing new appliances and systems. National rebates and incentives are also available for this, plus you can further save by buying a smaller heat pump if you have a weather-sealed home.

Prepare Your System Before It Breaks

So you don’t end up in a pinch when something breaks, pre-shop for models, find a contractor who can install them, figure out your electrical panel rating and make any necessary system upgrades now. Typically, people with at least 150 amps have ample capacity for the bigger electrification projects.

How Much Does It Cost To Convert a House to All Electric?

It depends on which systems you upgrade. Some, like water heaters, can be minimal, but to fully electrify a house will be pretty expensive.

To get an idea of what it will cost you, try Rewiring America’s Personal Electrification Planner, which helps calculate upfront costs, annual bill savings, emissions reductions and air pollution and health impacts. They also have info on electrification for renters.

Cost Breakdown for an All-Electric Home

For Rodriguez, those costs were:

• Solar panels: $21,000
• Backup battery: $8,000
• LED bulbs: free (thanks to an incentive from his energy company)
• Water heater and appliances: $6,000
• Electrical panel/system upgrades: $2,500

In addition, upgrading to an HVAC electric heat pump typically ranges from $10,000 to $17,000 for a 1,500-square-foot home.

Keep in mind, some of these expenses will eventually pay for themselves in energy cost savings. For rooftop solar, that averages about seven years, and for the rest of the system’s lifetime (20 to 40 years) you have essentially a free source of electricity for powering your home and EV, says Amend.

Pros and Cons of Converting to an All-Electric Home

Pros

• Energy savings
• Improved home comfort
• Improved indoor air quality, and outdoor air quality around appliance vents
• Resilience from power outages, if you add battery storage
• Positive climate impact (by greatly reducing your carbon footprint)
• Lower operating costs for most U.S. households (based on local energy rates)
• Increased home value.
• Historic federal and local tax credits and rebates

Cons

• Higher upfront cost
• Availability of qualified contractors is lacking
• The time it takes to research systems and find contractors

“It’s a time investment, just as much as it is a monetary one,” says Rodriguez. “The amount of vetting that has to be done to find the right fit for the job can be mentally taxing for most people.”

Is Electrify Your Home Worth It?

Yes, if you have the financial means. An electrified home is more efficient, healthier to live in, not susceptible to grid outages and better for the planet. But if you don’t have the money, remember it’s not an all-or-nothing prospect. Every step makes a difference, and some of the more affordable steps are also the most effective, such as weatherizing and replacing gas ranges and dryers.

FAQs

What’s the most expensive part of going all-electric?

Usually, it’s installing solar panels and battery backup systems, followed by a heat pump for HVAC — though those systems eventually pay for themselves in energy savings. Also, for homes with old wiring, the cost of upgrading the electrical can add up.

Is it cheaper to have an all-electric home?

Yes, for the majority of homes, but it depends on your region and whether you install solar. According to one study from the National Renewable Energy Laboratories (NREL), 62 to 95 percent of American households switching to a heat pump will see a drop in their energy bills. With weatherizing, that number rises to 82 to 97 percent of households seeing savings. Similarly, another NREL study found EV owners can save up to $1,000 yearly in fuel costs.

“In the beginning, it may not seem cheaper,” says Rodriguez. “But with time, and especially if you remain in the home for more than five years, you definitely see the savings.”

Can you convert to an all-electric home in stages?

Definitely. That’s how most people do it because it makes time and budgeting the project easier. Plus, it helps you take the most advantage of certain Inflation Reduction Act tax credits that can be accessed across multiple years.

What tax breaks and rebates are available for converting to an all-electric home?

The Inflation Reduction Act offers tax credits to everyone, plus gives money to states to administer rebates for low-income households. California, Hawaii, New Mexico and New York will have their programs up and running in 2024. In some areas, state and utility rebates are also available. To find out what rebates and tax credits you might qualify for, try Rewiring America’s Inflation Reduction Act Savings Calculator, plus ask your local utility company and municipal and state energy offices.

About The Experts

• Alex Amend is Director of Communications at Rewiring America. He’s personally been cooking on an induction stove for over two years, drives a Chevy Bolt and recently secured grant money to help install a solar and battery backup system at his local fire station in rural New Mexico, where he serves as a volunteer firefighter.
• Geraldo Rogdriguez is a homeowner in Raleigh, North Carolina, and works as Head of Customer Operations for a software company. He has been electrifying his house, including installing a home battery system to mitigate power outages that happen in extreme summer heat.