Buildings are a top source of carbon pollution—both globally and in Minnesota—contributing 40 percent of U.S. greenhouse gas emissions. And while Minnesota’s electricity and transportation sectors are getting cleaner, pollution from buildings continues to grow every year.
The latest Intergovernmental Panel on Climate Change (IPCC) report, released in early April 2022, highlighted a source of emissions that is hidden in plain sight: our buildings. “Over the period 1990-2019, global CO2 emissions from buildings increased by 50%,” according to the IPCC. While buildings make up a smaller portion of greenhouse gas emissions than transportation or electricity generation, the emissions are trending in the wrong direction. In the last decade, while other emissions decreased, building emissions rose.
To help solve this problem, Fresh Energy is focused on reducing emissions from both new and existing buildings in Minnesota. One of the ways we are doing this is by ensuring our buildings are future-proof and ready for the next generation of clean, efficient, electric heating, hot water, and cooking. To learn more about our other work on building codes, energy efficiency, and beyond, check out this blog.
In particular, we’ve identified electric panel updates as a strategic way to speed up home electrification. That’s why Fresh Energy is leading a new effort at the Minnesota Legislature this year to prepare Minnesota’s existing residential buildings for the transition to fossil-free electricity: An electric panel upgrade program for owners of single family and multifamily buildings.
Why electric panels?
A home’s electric panel can be a surprising roadblock to home electrification. Most residents realize that in order to upgrade to electric hot water, they’ll need to replace their gas hot water heater with a heat pump (sometimes called hybrid) water heater, or a simple electric water heater. Likewise, in order to quickly charge an electric car, a home’s garage would need a 240-volt outlet (most outlets are 120-volt). But often these upgrades can be delayed when residents realize that their home does not have enough electrical capacity to support all-electric appliances and charging equipment. Upgrading to a 200-amp electric panel—the standard for full electrification in most single-family homes—can cost thousands of dollars.
This is the roadblock Fresh Energy is seeking to eliminate through a first-of-its-kind panel upgrade grant program. Research organization, Pecan Street, estimates that 48 million homes nationwide may require electric panel upgrades to fully electrify. This means we need to start now.
But the benefits of updating an electric panel go beyond the emissions reductions of removing fossil gas-powered appliances. Outdated panels can be a safety risk, as well as a quality-of-life issue, when too many outlets are sharing the same circuit, leading to tripped breakers from the toaster, a fan, or a blow dryer.
Equity and the energy transition
Like all of our programs at Fresh Energy, this initiative puts equity front and center. Paying for electric panel upgrades is an expensive undertaking, so we want to ensure this program exemplifies equity and prioritizes benefiting under-resourced households. The program is designed to cover the full cost of upgrades for residents with lower incomes first. Then, it would expand to all Minnesotans in a second round of applications.
Another benefit to this program is avoiding a common gap that is created by rebates and tax credits: If you don’t have the upfront cash to cover the full upgrade, you cannot benefit from the program.
“Fresh Energy worked with a variety of partners to design a program that would meet Minnesotans where they are,” said Mari Ojeda, senior policy associate on Fresh Energy’s Energy Access and Equity team. “We need to be proactive in reducing barriers for folks that want to prepare their houses and apartments for our transition to clean energy.”
Status update at the Minnesota Legislature
Fresh Energy’s electric panel upgrade pilot program was introduced in the 2022 session of the Minnesota Legislature by a bipartisan team: Representative Athena Hollins in the House, and Senator Jason Rarick in the Senate.
After the bill’s introduction, Fresh Energy partnered with Twin Cities Habitat for Humanity and Rewiring America to provide supportive testimony at committee hearings. You can listen to the recording of the March 22 Energy Finance and Policy Committee hearing here.
So where is this proposal in the legislative process? This session, legislative leaders are consolidating proposals into unified “omnibus” packages. That means stand-alone bills as introduced will no longer show the real progress of a specific proposal. This pilot is included in the House energy omnibus package, but not in the Senate energy omnibus in part because Senate leaders have set tight spending limits for their committee chairs.
Once the House and Senate pass their respective omnibus packages through finance committees and then the full chamber, conference committees will meet to negotiate compromises between what the two chambers have passed. Stay tuned for updates!
What’s next for panel updates?
It is a challenging year at the Minnesota Legislature, but we know that updating electric panels in our homes and buildings is a crucial piece of reducing emissions from our buildings. And while there’s no one-size-fits-all solution to ensuring our homes are ready for Minnesota’s clean energy future, this program takes a significant step forward in preparing them for what is next.
Be sure to follow Fresh Energy for updates about our work to electrify everything we can through equitable policies, innovative programs, and invaluable partnerships.