Palo Alto launches new program to transition to electric water heaters

Palo Alto launches new program to convert to electric water heaters. Councilor Greg Tanaka, left, Mayor Patrick Burt and Councilor Alison Cormack during the City Council meeting. (Phoebe Quinton/Peninsula Press)

Palo Alto to phase out gas water heaters and reduce fossil fuel emissions is making it easier for residents to install electric heat pumps.

The Palo Alto City Council on Oct. 3 approved the Advanced Hot Water Heat Pump Program, which aims to install 1,000 heat pump water heaters by the end of 2023.

The program comes along with California’s cities to meet the state’s ambitious goal of becoming carbon neutral by 2045. Palo Alto has an additional target of reducing emissions by 80% by 2030, using 1990 emission levels as a starting point.

Although the city had previously offered discounts for heat pump water heaters, it didn’t address the hassle of organizing the installation. Other Bay Area cities have similar discount programs for electric water heaters. Palo Alto’s new program offers city-organized installation at a fixed price to reduce the hassle of finding contractors familiar with the technology, negotiating prices, and affording the heating.

“We’re actually breaking new ground,” said Mayor Patrick Burt. “We have to learn from our experiences and adapt to that next year. We don’t know all the bugs that will be in here, so we’re piloting this.”

Unlike gas-fired heaters, which generate heat before each use, electric heat pumps pull heat from the air or ground and can be two to three times more energy efficient, according to the Department of Energy. Because they extract heat from the air, heat pumps can also act as air purifiers and air conditioners, useful during California wildfires and heatwaves.

According to City Hall, 90% of homes in Palo Alto have gas water heaters. Overall, natural gas used in buildings contributed about 35% of Palo Alto’s greenhouse gas emissions, with households accounting for about 18%, according to a 2020 city report.

Palo Alto launches new program to convert to electric water heatersPalo Alto launches new program to convert to electric water heaters. Palo Alto resident Ian Irwin is urging City Council to consider climate initiatives that go beyond the heat pump program. (Phoebe Quinton/Peninsula Press)

Although the new program is innovative in its design, the environmental impact of switching to heat pump water heaters is small. A staff report estimates that the pilot program could reduce about 2% of the emissions needed to meet the 2030 target. If the program is expanded after its pilot to retrofit all individual gas water heaters in Palo Alto, these emissions could be reduced by up to 5%.

“It’s not revolutionary or anything, but we thought it was a really nice final step in the right direction,” said Mel Kronick, public commentator and member of 350 Silicon Valley, a climate justice volunteer group.

After his own heating system stopped working, Kronick had to decide between buying a new gas heating system or going four months without hot water and looking for a more energy-efficient one. While heat pump water heaters can be twice as efficient, they are also twice as expensive as traditional heating and are less well known to contractors. Without having a conversion plan, Kronick opted for readily available gas heating.

“I readily admit that I did the wrong thing, and in hindsight I regret it,” Kronick said. He didn’t want others to face the same choice, so he joined 350 Silicon Valley’s efforts to educate residents about water heaters.

A heat pump water heater typically costs around $6,000 to purchase and install.

With the program’s installation service, residents pay $2,700 either fully upfront or with an initial payment of $1,500 followed by interest-free monthly payments. The city is also offering a $2,300 rebate for those who choose to self-install. The Inflation Reduction Act also allowed residents to claim a federal tax credit of up to $2,000 starting in January, not to exceed expenses spent on heating. The city can offer a discounted price for the water heaters by funding the city’s revenue from the sale of cap-and-trade certificates and the Utility Department’s Electric Special Projects Reserve, which funds projects with significant impact that electric tariff payers benefit from benefit.

Some residents are concerned that Palo Alto’s power grid isn’t producing enough electricity to power all of the new electronics. While the city’s power grid may not currently have the capacity to replace every water heater, it can support the pilot program. The mayor plans to upgrade the grid to withstand further electrification.

“It’s not that we can’t do it, it’s that we can’t do it today,” said Debbie Mytels, steering committee member for 350 Silicon Valley and chair of outreach at Fossil Free Buildings for Silicon Valley.

The program is small in scale but also demonstrates the city’s commitment to its climate emissions target. In the week after this decision, the city council voted on a pure electrical obligation for new buildings. Looking ahead, the mayor hopes to expand the water heater program to commercial buildings.

“It’s a yes, and,” said David Coale, a board member of Carbon Free Palo Alto, an organization that worked on the program’s proposal. “There is no silver bullet for this transition.”

A picture of Phoebe Quinton

Phoebe Quinton is an Atlanta-based journalist passionate about telling underreported stories. Her interest in policy development and social issues has led her to cover small business, transgender athletes and immigrant communities. As a student at Stanford University, she studied International Relations and improved her French and Arabic. Outside of class, she was an editor at The Stanford Daily and worked in podcast production for the Stanford Storytelling Project. You can also find her work in The Peninsula Press, a California publication, and 285 South, a local newsletter focused on immigrants in Atlanta.

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