Ensuring Electrification is Equitable and Beneficial
TECH Clean California is a statewide program designed to accelerate the heat pump market through incentives, workforce training, and consumer education. This award-winning effort will ensure California meets its target to install 6 million heat pumps by 2030, with underserved communities receiving half the funds to achieve this goal.
As part of the TECH implementation team, Energy Solutions and Recurve analyzed residential energy meter data from across California. In doing so, we uncovered a simple but consequential fact – customers with high summer air conditioning use and low winter heating needs are the most likely to save money by switching from a gas-powered furnace to a highly efficient electric heat pump system.
That’s because heat pumps transfer heat rather than generate it, so they’re up to four times more efficient than gas systems, reducing the most electricity use during summer peak times when strain on the grid is at its height. So customers with high cooling and low heating burdens would likely see significant savings while reducing grid load.
Enter Southern California Edison.
SCE’s Countdown to 2045 analysis shows the average household customer will save about 40% on annual energy expenses by 2045 compared to today, in real terms, even as their electricity use increases. While electricity costs will likely continue to rise for most customers, they’ll spend far less on natural gas and gasoline, lowering their total energy bill. Since electric equipment is highly efficient, less energy is required to achieve the same benefits.
In the short run, however, SCE knew not all potential customers were equally likely to save money. In fact, due to the high cost of electricity relative to natural gas, it’s clear some electrification customers would see their bills go up.
Recurve worked with SCE to identify participants most likely to realize savings based on their energy use patterns. We focused on SCE’s Energy Savings Assistance (ESA) program, designed to help income-qualified customers lower their total energy bill by switching from gas-powered to high-efficiency electric appliances while supporting a clean grid powered by renewable energy.
Ensuring that electrification programs reduce energy costs is especially important for low-income customers. Program success hinged on finding the right participants with the highest opportunity to see their energy bills decrease. The challenge was how to find those people.
Data Provides a Solution to Beneficial Electrification
Recurve started by identifying customers for whom heat pumps would likely help ensure significant bill savings as well as valuable grid impacts. Then, SCE applied demographic filters to focus on those customers who’d be good candidates for the program.
Based on these findings, SCE sent nearly 18,000 targeted emails to eligible low-income customers, promoting its ESA heat pump retrofit program. The results were profound, resulting in a pool with nearly 2.5x higher cooling burdens than the average low-income customer in the company’s service area.
Working with Recurve, SCE identified and marketed to specific customers for whom heat pumps would help save money and reduce peak demand when it’s most valuable to the grid. These targeted customers would benefit from lower energy bills by switching to a heat pump.
TECH participants with similarly high baseline cooling loads also contributed over 50% more value to the grid.
In partnership with SCE, this initiative establishes a potentially industry-changing best practice – using smart meter data and analytics to ensure electrification translates into tangible savings for customers while positively impacting the grid.
Ensuring customers reduce their total energy bill is especially critical because California’s climate goals include social equity. A "do no harm" approach minimizes the risk that an intervention unintentionally worsens the energy burden of vulnerable customers and maximizes the equity benefits per dollar spent. All utilities should adopt this data-driven approach to ensure the best possible outcomes for customers and the grid.