Catalyst with Shayle Kann - The pace of home electrification

Episode Date: October 19, 2023

Heat pumps in 140 million U.S. homes by 2050 — that’s the goal laid out in Rewiring America’s recent report on the pace of home electrification. It’s a daunting target for a country that had heat pumps in only 17 million homes in 2020. But we’re not that far off. According to Rewiring America, the U.S. is currently on track to install about five million heat pumps by 2025, only about two and a half million short of the pace we need to reach 140 million homes by midcentury. So what can we do to close the gap? What about other major categories of home electrification like water heaters and induction stoves — are we on pace to reach net-zero targets there? In this episode, Shayle talks to Stephen Pantano, head of market transformation at Rewiring America, about the organization’s Pace of Progress report. They cover topics like: The adoption targets for water heaters, induction stoves, and other efficient home appliances The roughly $9 billion in incentives in the Inflation Reduction Act that could accelerate adoption The need for more data to get a better understanding of where and how to speed up adoption Why heat pumps are a growing share of a shrinking heating and cooling market, and how that’s impacting slumping heat pump sales Recommended Resources: Rewiring America: Pace of Progress Canary: New plan aims to quadruple heat-pump adoption in 25 states Canary: Heat pumps outperform boilers and furnaces — even in the cold Catalyst: How has US industrial policy impacted climatetech investment? Sign up for Latitude Media’s Frontier Forum on January 29, featuring Crux CEO Alfred Johnson, who will break down the budding market for clean energy tax credits. We’ll dissect current transactions and pricing, compare buyer and seller expectations, and look at where the market is headed in 2024. Catalyst is brought to you by BayWa r.e., a leading global renewable energy developer, service supplier, and distributor. With over 22GW in their project pipeline, BayWa r.e. is rethinking energy every day and at every level. Committed to being a solid partner for the long run, BayWa r.e. wants to work with you to help shape the future of energy. Learn more at bay.wa-re.com. Catalyst is brought to you by Sungrow. Now in more than 150 countries, Sungrow’s solutions include inverters for utility-scale, commercial and industrial solar, plus energy storage systems. Learn more at us.sungrowpower.com.

A co-production of latitude media and Canary Media. I'm Shail Khan, and this is Catalyst. You can't get to zero emissions without electrifying the appliances and equipment in our homes. 42% of overall energy-related emissions coming from these so-called kitchen table decisions about what equipment you use in your home, what kind of car you drive, whether you use solar. Okay, so disclosure. I do have heat pumps for my HVAC system. I do not yet use electricity to heat my water in my house,

and I do not have an induction stove. The question is, am I ahead of or behind the rest of the population? When utilities need flexible capacity they can count on, they turn to Energy Hub. Energy Hub works with more than 170 utilities, coordinating over 2.5 million devices to manage 3.4 gigawatts of flexibility, built for the moments when utilities can't afford uncertainty. Energy Hub builds and operates virtual power plants that utilities actually stake their grid planning on,

coordinating EVs, batteries, thermostats, and more through a single platform built for utility scale. Predictive, verifiable, and designed to perform when it counts. Learn more at energy hub.com. Trillions of dollars are flowing into clean and critical infrastructure, but those investments aren't driven by technology alone. They're shaped by markets, by policy, by capital, and by the institutions that connect them.

I'm Alfred Johnson, CEO of Crux, and host of a brand new podcast, Critical Capital. Each episode, I talk with people deploying capital, shaping policy and building the clean economy. Tune in as we unpack how progress is actually made. Listen to Critical Capital on Spotify, Apple, or wherever you get your podcasts. I'm Shail Khan.

I invest in revolutionary climate technologies and energy impact partners. Welcome. So as part of the conversation that we had on this podcast last week with Trevor Hauser, there was a bit toward the end that I thought was especially interesting, where we talked about the technologies where there are incentives in the United States that came largely from the Inflation Reduction Act, but where the market is not exactly booming yet. One of the ones that we talked about there was heat pumps, where the market is actually

down year over year in overall sales. There's nuance to that because the market for HVAC systems in general is, even further down. But it opened up a question for me that is a little bit broader, which is, how are we doing in terms of overall home electrification in the United States? You hear a lot of buzz about it these days, I think, for good reason. And it's not just heat pumps for heating and cooling. It's also for water heating and for clothes drying and for cooking, all of which can be electrified, not all with heat pumps, obviously. And, you know, you could get the sense from the outside that like we're at the beginning of an S curve or we're somewhere in the middle of an S curve there.

I don't know whether we've hit the inflection point. Are we struggling to build momentum? Anyway, it's an interesting set of questions because home electrification, one, is part of most plans for overall decarbonization of the economy. And two, has bigger ramifications for a lot of other things that we've talked about. For example, the impacts on the electric grid and load growth there that extends beyond home electrification. but is going to have a big impact on our ability to deliver clean power. So I wanted to have a chat about where we are on the pace of progress of home electrification. Also, before we begin, I'm hosting, I think the third Ask Me Anything episode of this podcast where I answer your questions about climate tech or the energy transition or really whatever you want.

So please send in questions. You could tag us on Twitter or LinkedIn with the hashtag Ask Catalyst. That's hashtag Ask Catalyst. You can also leave a voicemail if that is something that you still do. The number is 911-808-5832, or you can email us at Catalystatlatitudemedia.com. For this podcast, I brought on Steve Pentano, who is the Director of Market Transformation at Rewiring America, which is focused on home electrification. So there's no one better to address this question. And with no further ado, here's Steve.

Steve, welcome. Thank you, Shell. Nice to be here. Let's talk about home electrification. Starting with, you know, it's a category that encompasses a number of different things that we can do in homes to electrify things that are otherwise not electrified. So let's run through the categories. And maybe if you can, I guess, rank, order the components of home electrification in terms of their importance from the, I guess, from the decarbonization perspective. Like, what's the most important home electrification item all the way down the list to the ones that we,

we could talk about, but they don't matter as much. Yeah, when we look at the profile of an average home, and we have good data from the Department of Energy, they do something called Rex or the residential energy consumption survey every five years or so. DOE tells us that about 55% of the emissions from an average home comes from heating and cooling, or your HVAC system, 19% from water heating,

3% from clothes drying, and 2% from cooking. That doesn't total up to 100. The remainder is plug loads, like your television, other appliances that you may have in your house, your coffee maker, etc. But really heating and cooling and water heating are well up there at the top of the list. I guess the other way to think about which ones are most important are like, which ones do we have most urgency on because the stock turnover is slowest?

Like there's some things that you can do at any time, and there's other things that you're only going to do once every 10 years or whatever it is, and that second category are ones that even if it's like the total magnitude of the impact isn't necessarily as large. It's an important one because the purchase behavior is infrequent. How do you think about that with all the categories? So we look at there are, I think, typical statistical lifetimes for equipment. So an HVAC system has a life of about 15 years statistically, a water heater, about 10 years.

Closed dryers maybe seven or eight years. And cooking might be a little bit longer. But HVAC is really the big one there again, because, you know, you don't, it's a big expense, right? You don't want to replace your heating system every five years. Hopefully you're not in a position where you have to do that. So we want, you know, part of our mission at rewiring America is making people aware of the appliances in their home

and the equipment in their home so that they're ready to make these changes when that piece of equipment fails. And then you don't lock in emissions from fossil fuel appliance for another 15 years or so if you're doing, you know, if you're putting in a new fossil fuel HVAC system. Also, the electrical equipment is an important piece to the equation as well. So if you think about your load center in your house or your electrical panel, that's probably original to your home in most cases.

It doesn't get upgraded very often, but a lot of what we talk about when we talk about electrification is turning fossil fuel devices into electric alternatives, which in many cases requires new circuits to be run. So if you have a gas-water heater today and you want to convert. to a heat pump water heater, you're going to need electrical service in that vicinity where you maybe don't have it now. And that's going to require some changes to your panels. So panels are another one that come up on the long life list where we want to see people being proactive

and thinking about ways to prepare themselves for a future appliance upgrade. So we talked about the share of energy consumption of the home that each of these units accounts for on average. But stepping back for a second, like how important is home electrification in the context of overall emissions in the United States. I guess there's two parts of that question. How much of overall emissions is associated with residential energy consumption? And then how big a benefit do you get?

Electrifying, particularly given that the grid is not yet fully decarbonized. So this is going to be a regional answer, I'm sure, but just high level. Yeah, so overall, I mean, you can't get to zero emissions without electrifying the appliances and equipment in our homes. There's 121 million households

around the country. that's a lot of equipment. So the number we use for that is about 42% of overall energy-related emissions coming from these so-called kitchen table decisions about what equipment you use in your home, what kind of car you drive, whether you use solar on your roof or community solar to get your energy. So it's a big chunk of the national emissions,

the national emissions picture. And it's also, you know, in some places, in a lot of places, actually, it's carbon. positive today to make these changes and somewhere the grid is perhaps a little you know there's perhaps a lot of coal or you know dirty emission sources on the

grid side it's maybe not emissions positive for everyone today but you know if you put solar on your roof and electrify that changes the equation dramatically and we're seeing so much introduction of new renewables on the grid nationally that that situational change

pretty soon everywhere right so this is you know electrification is an investment in the future. It returns some dividends on your investment in terms of carbon emissions. So every new bit of renewable that joins the grid, every bit cleaner that the grid gets, your electrification investments in your home get that much more beneficial in terms of their overall carbon impact. All right. So let's talk about where we are in terms of progress on electrification and trends in electrification in each of these categories that we've described. I think it'll be

interesting to talk about it categorically, but also geographically, like, you know, in different types of customers. There's a bunch of interesting ways to think about this. But let's start with just overall. And we can go in that same rank order of importance what the trend line is. So starting, obviously, with heating and cooling, you know, we did an episode very recently where part of the conversation was like what's going on with heat pump sales, just because overall heat pump sales are not exactly booming, as you might imagine. they would be right now given all the excitement about heat pumps. So what's the overall picture on heating and cooling electrification?

How has that been trending? And like where are we in the progression of overall electrification there? So yeah, we think about, we wrote a report earlier this year called the Pace of Progress where we charted what we think needs to happen across each of the big end uses to get to zero emissions sort of building stock, residential building stock in the country. and we looked to a 2050 target and we said where are the sales trends going today and how much do we need to accelerate those

in order to get to 100% electric by 2050 given some of these equipment lifetimes, a long lifetimes that we talk about and the turnover of stock and where things have been going. For heat pumps, you may be aware that heat pumps sold furnaces for the gas and oil furnaces as heating equipment for the first time last year those trends have continued.

So I think the changes in sales that are being perceived right now are really broader market changes in people's ability to invest in home upgrades of this nature. If you look broadly across all heating technologies, all markets are down and heat pumps continue to beat furnaces in terms of their overall sales. So going back to that pace of progress, the way this curve works,

it starts off gradually and then ramps up quickly over future years, which means that we have a few years left to get to 2050, where the sales targets can be nationally for heat pumps can be a little more modest, and then they quickly grow to where we want to see that become the predominant technology being installed everywhere. And what we found was that between 2023 and 2025, we need about 7.7 million heat pump sales overall nationally. The business as usual growth, if there were no acceleration in the market,

would be about 5.3 million heat pumps. So that leaves a gap of about 2.5 million sales that we want to see induced between now and 2025. That puts us on track for this sort of full turnover to electric technologies by 2050. As I said, the market is, I think interest rates are high. People are hesitant to make big infrastructure investments in their homes. These are big projects, whether it's to replace a fossil furnace or to install a heat pump.

So people are looking at tens of thousand dollars of investment. It's harder to finance that today with a home interest loan or home equity loan or otherwise than it was a couple of years ago. So that's probably depressing sales broadly across the market. But even still, we see, let's see, we've got nine and a half. percent slow down in heat pump shipments, but still sales of 2.7 million year to date as of August of this year, and that's from the latest data from AHRI, the industry association. But even gas furnaces are down about 25 percent. Gas and oil furnaces are down 25 percent over the same period. So heat pumps are not being maybe affected as much as some of

the fossil fuel equipment and still sort of beating out fossil, despite the fact that the overall numbers have slowed down just a bit. Right. So rising, share of a shrinking market, at least in the immediate term. And then presumably at some point, the market doesn't shrink forever because U.S. housing stock is going to grow, but it's sort of undetermined timeline under which that turns, because obviously interest rates are higher for longer than people expected. And you know what happens with the economy. But so the good news is a growing share, bad news is the overall market is down. Yeah, I mean, people, and you can't defer investments in heating and cooling systems forever, right? There comes a point where people have to make

this choice regardless of interest rates. So there is some turnover that will certainly continue to happen. And then, of course, we hope that the Inflation Reduction Act and all of these investments from the federal government that are coming into play will really spur more and more of that transformation. I'm interested to go one level deeper on this. I mean, I think there's a few different ways you could cut the heat pump sales figures, right? There's regional, right? Because, you know, heat pumps are, they have much higher penetration already in places like the southeast where they're predominantly used for cooling than they do. And like the Midwest or the Northeast or the Northeast where you need a lot of heating.

And so I'm interested if the trends are different regionally. And then I guess the other way to look at it would be heat pumps are a broad category. There's mini splits and central ducted units and all sorts of different kinds of things. Do we see any noticeable difference in adoption thus far along those lines? So unfortunately we're limited by the data in this respect. So there was a time where there were regional sales figures. published for the heat pump market within maybe across five or six different regions of the country.

Unfortunately, those data aren't published anymore, so we're a bit blind to that. What we do have, and what we will soon have more of, is state-level data that will give us a bit more insight into how the market is moving state by state. Now, for example, one success story of late is the state of Maine, which had 100,000 heat pump sales target

for its statewide climate goal. and exceeded that a couple of years ahead of schedule and then revised that goal up to, I believe, 175,000 systems. So we know, for example, that there's a lot of success happening in the state of Maine, so we can have some of that insight into exactly what's happening, state by state, or region by region. But unfortunately, right now, we're sort of limited

to the national view plus some of these stories that are coming out in limited quantities from certain states. Maine is obviously an interesting one. I mean, unless there's something specific about Maine, like they've got a statewide rebate or something like that. I mean, it's obviously a cold climate. So, you know, you'd anticipate that, like, barring Maine having something unique, idiosyncratic to that state, then probably what's happening in Maine might be happening in Vermont or Massachusetts

or, you know, other regional areas that have similar climate profiles. Yeah, I think Maine has been a leader in taking a pretty comprehensive sort of statewide agenda. towards the heating electrification market in general. And they do have put a lot of resources towards contractor training and consumer awareness and this sort of broader program to try to move the market. That is also happening in other states.

New York, for example, Massachusetts in the Northeast, both have heating electrification programs. I haven't necessarily seen the stats on those to know if they're also exceeding their targets. But more and more states are starting to be. pay attention to this now, obviously in light of the rebate programs that are coming, and we expect a lot more of this to be happening in a lot of places pretty soon. And, you know, again, I think as these programs take shape, we'll have much better insights into what's working and what's not and can help

to facilitate some of that learning between states, you know, ourselves and a lot of other organizations that play that type of role to help different states or different program implementers learn from their peers and incorporate best practices. So from where you sit today, like, what do you, I mean, you know, that period of needing that extra two and a half million units or whatever it is is pretty short. That's now to 2025. That's probably, that period is probably during the interest rates remain high cycle. I mean, maybe they come down toward the end of that, who knows? But, you know, from where you sit today, like, how hard is it going to be to approach those numbers, given that, again, we have growing share of shrinking market? I mean, I think it's a, it's a, it's undoubtedly a huge challenge. I mean, we have tens of millions of heating systems. This is not to mention water heaters and everything else that has to be installed, right? This is a big

mobilization that I think should be considered on par with other big sort of national mobilizations of effort to make the changes we need to make, right? The climate emergency is a climate emergency. It needs to be addressed as such. And, you know, thankfully, the administration

put the Inflation Reduction Act in place to get the conversation started and put a lot of money into the market. But one thing that always comes to mind for me is that, you know, we have roughly $9.5 billion in rebates in the Inflation Reduction Act that can be applied for efficiency or electrification. That's a lot of money. But at the same time, in one year, I think it was 2022, one oil company, Exxon, made $54 billion in profit. That's, you know, six times what's available for rebates. So that's one oil company in one year after doing everything they need to do to secure their market share for fossil fuels still reaped $54 billion in profits. So that's, you know,

the disparity in economic power we're talking about here is still big. We need more attention on this. We need more resources for this as much as we can get because, you know, the playing field's pretty uneven to begin with here. But, you know, thankfully, again, we have the IRA, we have this good start. Hopefully we'll have a lot more funding channeled in this direction as well through other IRA programs in the future and looking forward to trying to make those all harmonize and work together well. Virtual power plants are becoming a reliable way for utilities to manage capacity, but enrolling devices is just the start. What really matters is confidence, knowing those resources will perform when dispatched and being able to prove it from the control room to the living room.

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So we talked about HVAC. Let's talk about water heating. Obviously, that's the other reasonably large category. And I think the one that gets less attention, honestly, people talk a lot about heat pumps for heating and cooling, I think less for water heating. where are we on our pace of progress on water heating electrification? So for water heating, we have a little more time.

So water heaters have, again, we use this 10-year life versus 15 for HVAC. And what that does is it lengthens the shallow part of the curve before we really have to accelerate progress. So according to our calculations nationally, again, to that 2025 deadline, we need 810,000 heat pump water heaters in total installed across the country. We're on pace for 613,000, which leaves about 204,000 or so as a gap in terms of what we need to accelerate. 200,000 over 50 states is not a huge challenge, right? We have, again, this is like the nice, the convenient part of the ramp that we're in now, but we do have to start taking action. There's been a lot of interesting innovation, I think just a couple days ago. I saw that A.O. Smith

introduced its own 120-volt plug-in water heater, heat pump water heater. Reem has had one on the market for a while. Now A.O. Smith has one as well. So that's a huge opportunity, right? This is a technology that is going to get us a lot of these sales that we need to see in the market because if, let's say, again, you have a gas water heater, but you happen to have a free 120-volt outlet nearby, you can plug in a heat pump water heater instead of having to have a dedicated 240-volt circuit run.

That's going to work great for a lot of smaller homes. multifamily buildings and elsewhere where maybe there's some challenges in investing in some of the electrical infrastructure. Now you don't have to do that. You can buy that water heater today and plug it right into the wall and you've gone to heat pump. Obviously, you still need to plummet into the house. So it's not quite that simple, but it's a lot easier than having to run a dedicated circuit. What about the combined? We've seen some heat pumps that do both water heating and space heating and cooling, is that, do you see that as a significant trend or is it a tiny nichey part of the market? I think it's a niche for now. I'd be interested. I mean, there's a lot of innovation out there that's

yet to sort of hit its stride. That could be one where we start to see some interesting market growth. But yeah, I think for now, I mean, most of these products, HVAC and water heaters are sold through different channels. People think about them differently. They buy them on different timelines. So unless you're really doing a comprehensive retrofit of your home, you know, there's probably not going to be top of mind for most people to try to do two things at once. That actually gets to a broader question that I wanted to ask you about. So we'll jump to it now, which is the doing home electrification piecemeal versus electrifying your home full stop. There's, you know, a bunch of companies now that are out there pursuing this sort of like

with a whole home electrification approach, and they can wrap financing with it, and maybe this involves more than what we've just talked about, right? Sometimes it'll include an EV charger or a rooftop solar or whatever. You know, and historically, I think, you know, just going back away, is like in the early days of rooftop solar, some of those companies, Solar City being an example, you know, dabbled in like, oh, maybe we should do an energy efficiency retrofit

at the same time that we do rooftop solar. They all backed away from that because it ended up like, overly complicating the sales process, and it just made the customer acquisition costs higher, all these additional challenges. I wonder how you see that playing out in home electrification here. Is this all happening? As you said, the replacement cycles are all different, but there may be some set of consumers who want to electrify their home and don't want to wait around for each thing to come up. Yeah, I think we'll see a variety of solutions. I'm not going to hazard a guess as to which ones become predominant necessarily.

I think for people who have the money to make a huge investment and, you know, big sort of comprehensive investment in upgrading their home, then sure, there will be service providers who offer that. For others, I think it's as important as anything else just to have a plan, right? Just to understand how your house works, what fuels you're even using today. And then how long you might have until you have to replace your heating system. So, for example, let's say you have a gas water heater and it's five years old, right? You happen to have your electrician over the house to do some work in a bathroom or something.

That electrician should be, you know, there's a good argument to say that that electrician should be prepared to help that homeowner make a plan for electrifying their home sometime down the road. We're developing tools. Other organizations are developing tools to help people do this planning. But the idea is that if you have a professional in your home, they can help you navigate, you know, okay, your water heater is five years old. When you're ready to go to a heat pump, even if you're not ready today, we should be doing that electrical work now or preparing ourselves for it so that you know that when that water heater eventually fails, you have an idea of what types of products you're going to look for. you have an idea of how much time it's going to take that to make that transition. And perhaps you've even already run the circuit over to that location so that you're ready to go with your new electric device

instead of fossil fuel and you're not hindered by some of these sort of obscure structural barriers such as, you know, all of a sudden now I need to call an electrician that I didn't plan for if I want to make this change towards a more climate-friendly product. Right? So planning really matters a lot. And I think, you know, most people maybe not listeners to this podcast, but a lot of people probably don't know how their homeworks

and what fuels they even use or how much it actually costs them to operate their home. Let's say you have another example of this is if you have oil heat, you get an oil bill intermittently. You might get your oil tank filled up depending on where you live once or three or four times a year. But it doesn't look or feel like your electric bill

or your gas bill because you don't see it monthly and maybe it's not billed to your credit card automatically or whatever you have for a payment plan. So there are probably a lot of people out there who don't sort of consider their oil bill as part of their total energy cost. But if they were to sort of look at the big picture here

and think about it holistically, would understand that they're actually spending a lot more on energy than they think. So having that plan, understanding how your homeworks, understanding what your big opportunities are to save money through electrification is really important just to get people

oriented towards solving this problem and feeling empowered and having the pieces in place so that it's not too logistically challenging when it comes time to make a change. Okay, so we sort of skipped past the two smaller categories that we mentioned at the beginning, which is cooking and clothes drying. I guess just briefly on those two, where are we relative to the others in terms of pace of progress and, you know, any observations as to trend lines and in electrification of those two? So, yeah, we did not run closed-drying numbers in our Pace of Progress report,

but I think we're going to have those soon. But on cooking, I can tell you, we've looked at 3.2 million induction stoves needed, again, up until that 20-25 time period, that's over the first three years. Business as usual suggests we'll have about 1.5 million sales over that period, so we need to about double that pace over the 20-23 to 2025 time period. Okay, so bigger delta in terms of how much is needed relative to the current pace, but obviously also smaller overall impact than needing more heat pumps or electric water heaters. Yeah, again, the cooking is just 2% of typical emissions from the home. I'm interested in anything that you think.

I mean, I think the overall trend lines here seem fairly intuitive. Maybe people hadn't appreciated that like 8-track sales are down overall. but anything within the numbers that you've seen that surprises you, either from a category perspective geographically, what might not we appreciate about how we are doing in terms of electrification of the home? The thing I like to point to here is this whole analysis, this whole pace of progress analysis does a couple of things.

It sort of breaks the problem down into me, sort of achievable near-term, let's say three-to-five-year objectives, where the numbers aren't astronomically high, so you can actually think about designing a program that, you know, an incentive program or what have you that actually achieves those numbers. But then if you break it down even further to the state or county level,

those numbers obviously get a lot smaller, right? So we look at one example we have is for the Chicago area. There's about 2 million households in Cook County. And if you look at the gap in water heater sales for heat pump water heater, it's only 13,000. over that few years time period. So that's an eminently achievable number to put Cook County on pace, essentially.

And that number is, you know, it's only several hundred thousand nationally. So in any given place, it's only tens of thousands or even less in terms of water heaters. Those are achievable things, right? If it becomes a very solvable problem in the short term, as long as you're also then keeping an eye towards,

are these changes going to become, self-sustaining over time, right? There aren't going to be rebate programs forever. There are now, or will be soon. These are unlikely to last until 2050. Maybe they will. It'd be great if they did, but let's say it's unlikely. So the market needs to sort of catch on to these signals

and respond in turn. And what that means is investing in training for workforce, building competition among installers so that there's enough people out there who know how to install these systems well and that people have good experiences with them. Building awareness, all this stuff around the market has to happen so that in this near-term period of time

where we have a few years of time to get the market going, that that actually, once we hit that 2025-2020-time frame, there's enough momentum built, and people are aware and people are demanding these products and there's enough people out there to install them well that it can sustain itself over. time. Hopefully the prices have come down quite a bit by that point as well.

That's actually another question. I don't know if you have data on this handy, but how have prices been trending? That's a difficult one as well. This is another area where we're hoping for more and better data through these rebate programs over time and through state programs

more broadly. Prices are still pretty high in some places. I think it largely depends on how much competition there is in the market. among contractors that do the installation work, how much they're willing to recommend these products. So I expect that in the Southeast, for example, for heat pumps,

where they've been predominant for a long time, there's not so much of a margin compared to other places where the market's sort of still getting its feet under it, and maybe there's still a premium being placed on some of these installs. The other thing we haven't talked about here is the products, side. Like, what are the products that people are buying to electrify homes? In some ways, you know, you could make an argument that these are fairly mature technologies, and it's more of an adoption problem. We've had heat pumps for HVAC and water heating for quite a while. Induction stoves are

not an entirely new thing. From your perspective, is there product innovation that is required? And if so, like, what do you think is going to be important to see? I think there's a lot of room for further innovation here, particularly with products that people see and feel regularly, like cooking products, for example. So, you know, on the water heater side, we already talked about the 120-volt

plug-in style heat pump hot water heaters. Those are great. They open up new market segments. There's a lot of other market segments for cooking products, for example, that people might not like these products, not for climate reasons, but for plenty of other reasons. So one good example of this is

some new induction stoves that are being brought to market, which have a bank of batteries where the warming drawer would ordinarily be. They also plug into the wall, so they can also run off 120 volts, replace a gas stove, and the nice benefit is

you have backup power built into your stove. So if there's a power outage, you could conceivably plug your refrigerator into your stove and have resilience and backup power where you didn't have it before. So I think we'll start to see, I hope we start to see more solutions like that, where, you know, it's obviously there's climate benefit and health benefit to converting to that induction stove and it's a better cooking experience, which will bring more people to it. But it also gives you resilience in your home and it solves for something maybe you didn't have at the top of mind as a buyer of a stove. But all of a sudden you go to the store and you see this thing which can power your fridge and you're like, oh, that's a brilliant idea.

Why don't I get one of those? So there's lots of ways, there's lots of benefits to electric appliances that have nothing to do with climate. They're just a better experience overall. And I think the market's starting to catch on to that, the market broadly for a lot of these products, and we'll start to see innovations that bring people to this conversation from very different places that have nothing to do with emissions reductions. Steve, thanks so much for doing this. We'll check back in in some time when we have more data on the pace of progress on electronic

Yeah, thank you. This is great. Looking forward to it. Steve Pentano is the head of market transformation at rewiring America. This show is a co-production of the newly rebranded Latitude Media and Canary Media. You can head over to canarymedia.com for links to today's topics. Latitude is supported by Prelude Ventures, a venture capital firm that partners with entrepreneurs to address climate change across a range of sectors, including advanced energy, food and ag, transportation and logistics, advanced materials from manufacturing, and advanced computing. This episode was produced by Daniel Waldorf.

Mixing by Roy Campanella and Sean Marquan, theme song by Sean Marquan. I'm Shail Khan, and this is Catalyst.