California was the first state in the nation to ban natural gas furnaces and water heaters—last September, the California Air Resources Board proposed banning the sale of all gas-fired water heaters and furnaces by 2030.
This past March, the Bay Area Air Quality Management District moved up the timeline and locally banned the sale and installation of gas water heaters by 2027 and 2029 for furnaces in all nine Bay Area counties. The Bay Area ban on gas water heaters means that anyone who purchases a new water heater in 2027 or beyond will be required to purchase an electric water heater.
Generally speaking, we replace a water heater when it fails. We usually find this out by either a large puddle of water in our garage or the simple fact that you have no hot water available in your house. The point is, we don’t typically plan for replacing water heaters. So when your water heater fails you can certainly attempt to repair your old water heater, but you probably need to be prepared to spend anywhere from about $1,300 to $2,700 for a new electric water heater, according to PG&E. Installing an electric tank-style water heater can range between $800 and $1,500.
But that’s only half the story. It’s likely that you will have to hire an electrician to retrofit your house for an electric water heater, and with the age of our local housing stock, this could end up being tens of thousands of dollars for wiring and possibly a panel upgrade to handle the amperage required for your house to run new electrical appliances. This could be a devastating cost for our lower income residents, including seniors and the disabled. They can’t go without hot water for long, but the financial burden may take them by surprise. Costs are even higher for a furnace conversion. Can you imagine being without heat during the dead of winter?
While the objective to rid our environment of nitrogen oxide emissions is noble, there are a myriad of problems with these bans and the unenlightened way in which government agencies are creating laws on the topic. As presented today, it’s essentially an unfunded mandate that places a heavy burden on our lower income residents, seniors and those with disabilities.
We believe that there should be financial incentives or grants available not just for the appliances themselves, but to retrofit homes for those appliances—especially since a piecemeal approach to retrofitting your house is generally not financially viable. The older the home, the more expensive the retrofit from mixed-energy (gas and electric) to all-electric. Homes built in the last 20 to 30 years could be relatively affordable to convert to all-electric, probably costing no more than $10,000.
Homes built in the 1950s, 1960s and 1970s could cost tens of thousands to hundreds of thousands of dollars to renovate, depending on several factors including the original materials used on the home; whether the electricity lines are buried or above ground; whether they go under the driveway; whether or not the homeowner wants to have a solar/battery backup; if the owner has a pool or hot tub; and, most importantly, the original amp service to the electrical panel. These figures of course will fluctuate considerably based on demand and availability of labor.
With considerable expenses and backlogs to get these retrofits done, it’s critical to be thinking about making those changes sooner than later. Mike and Karen Kapolnek own a house in Sunnyvale and they have been told it’s a 35-week backlog to get their project completed.
San José Spotlight columnist Neil Collins is CEO of the Santa Clara County Association of Realtors, a trade association representing more than 6,000 real estate professionals in Santa Clara County and surrounding areas. His column appears every fourth Thursday of the month. Contact Neil at [email protected] or follow @neilvcollins on Twitter.
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