Economics of Electrifying Buildings

Buildings are quickly becoming a cornerstone of ambitious climate policy, as policymakers recognize that we cannot meet global climate targets without eliminating emissions from buildings.

Given that every building we build today will have a 50 to 100-year lifespan, locking in carbon emissions for decades, we must eliminate fossil fuels entirely from new construction immediately. We can do this by building new all-electric and highly efficient homes and buildings while simultaneously increasing retrofits for the roughly 70 percent of existing US buildings that will still be standing in 2050. The cost of such an ambitious transition is often the first consideration and cause of hesitation.

The Economics of Electrifying Buildings provides an in-depth analysis of the costs and emissions reductions of electrifying newly constructed single-family detached homes, as well as retrofitting existing medium-size office buildings. We found that all-electric newly constructed single-family detached homes are more cost-effective to build and operate than mixed-fuel ones. Also, our analysis concluded that electrification of existing medium-size office buildings is cost-effective when coupled with other efficiency measures depending on the climate and utility rates.

Now is the time to accelerate the pace and scale of electrification to provide healthy, affordable places to live and work for all. Our results demonstrate that accelerating electrification is economic, reduces greenhouse gas emissions, and is technically feasible today – the time to act is now.