Rewiring, the IRA, and What that Actually Looks Like

Since the US passed the Inflation Reduction Act, opening funding to homeowners to make needed upgrades to our houses, there has been a lot of talk about the importance of electrifying!  Since we've actually done it, I wanted to touch a little on what that actually looks like.  

We're in MN, and -other than our solar install- we did all the home upgrades... before there were any assistance programs for it. No matter how costs get broken up, it's still a big factor in how these projects get done.  Impossible? Of course not!  We already did it!  But that doesn't mean it was an easy road.  Running the numbers, the IRA does make it a lot more attainable.

The Range

The very first thing we changed, was to shift our range from gas to an electric induction range.  It's one of those things that I'd wanted since I first heard about it, but the entry cost four years ago was still a lot.  Even the unit itself cost more than $2K.  Now, Frigidaire and Samsung both have models for around $1200! 

Unit costs aside, switching from gas to electric normally requires two different contractors and two different specialties, and if the a gas-fitting plumber and small-job electrician are hard to find, it can be a big challenge to get this switch completed.  We were lucky enough to have those covered both by having electrician-friends and a father-in-law who did an emergency disconnection when we found our gas line was leaking.  The costs for us really should have been much higher.  When we first planned our kitchen, we were going to wait on the stove to save for those changes.  Old houses often have other plans.

HVAC

If you're in MN, it can be hard to find an HVAC company that is up to speed on heat pump technology.  I've watched multiple homeowners be told that it's an impossible feat here, and go with another system.  I sincerely hope that is changing!  The technology is here!  And it works!  Even in our century-old home.

We found our HVAC company backward.  I knew it was going to be a challenge to find someone who knew it was possible to do a gas-free HVAC system, but even our electrical inspector had seen a system and was encouraging that it could be done!  So, I embarked on finding a product that could handle our extreme temps, contacting the manufacturer, and getting a contractor that way.  I was initially pulled in by a Mitsubishi system, and they gave me a short list of names, but the system I wanted hadn't even been released yet (it has now!), and our installers said Daikin had what we needed, when we needed it.  Our A/C condensor died that same day.

I have since asked Daikin who in the Twin Cities installs their systems, and out of the many, many options for HVAC systems, only two are doing all-electric.  Ductworks in the NW metro and Binder in the SE metro. In 2022 prices, the system cost us a little over $16K.  $2K less than a similar system with a gas furnace; it's a big ticket item no matter which system is installed. 

Electrical Requirements

If you are fortunate enough to be somewhere with enough tradespeople, these upgrades require a decent amount of power.  Going all-electric in MN required a back-up heating system that can run at all temperatures.  It uses 60 amps.  So, an upgrade of our electrical system was in order.  We went from 60-to-100 amps when we purchased our house and got off of fuses, and upgraded again from 100-to-200 amps to really cover a modern, electric home (200amps is the minimum I'd recommend for any home).  Overall, we've spent $10K on electrical alone in this house, partially from updating our panel twice, but our remaining knob and tube wiring was easy to access and replace, so that cost could have easily been much higher. 

Even though we had a fairly new meter, ours was no longer code, because a 2018 change necessitates a shut off outside in emergencies.  This is completely understandable!  But it is a significant cost increase over updating the panel.  We wound up with new everything over a six year period.  When we upgraded the panel, we also added an electric hook up to change over our water heater. It was due regardless of changing the heat source, but still cost about $1500.

IRA Changes Everything

I would be lying if I wrote that the IRA won't make this process more accessible.  It will!  I'm thrilled about that!  Rewiring America has a great savings calculator to help homeowners see exactly how the IRA would affect their home.  It's pretty slick!  They site on their "Electric Explainer" that the IRA upgrades and replacements for things like heat pumps, EV, and adding solar, can save homeowners $1800/year.  

I ran our house through the calculator, and these were our results:

The Numbers 

Using the data from the Rewiring America website, I was able to extrapolate how much we would have saved... if we'd waited until now to start.  But I don't know how much prices have increased either!  So, I'm happy either way.

• With the $10K we spent to upgrade our panel and our wiring, we'd be eligible for two rebates up to $6500 ($10K down to $3500).
• The heat pump HVAC system was $16K, and we'd be eligible for $8K in rebates ($16K down to $8K).
• Our Induction Range was $2300, and we'd be eligible for a rebate up to $840. ($2300 down to $1460).
• Our standard electric water heater was $1500, and the rebate is up to $1750.  Not a side-by-side comparison, but a quick google puts $1500 as the average.  So, this one could be nearly free, or just the cost of adding electrical and capping the gas!
• There are a lot of additional line items available through the IRA such as weatherization and efficiency rebates that we've spent time and money working on, over the years, but don't necessarily have hard numbers for!  Rewiring America has all those listed as well.

Total Potential Savings is capped at $14,000 for rebate programs.  
Total Costs Stull Incurred with our selections: $16,010.

​The rest of what we plan to do (or are in the middle of) is all in the Tax Credits section of the IRA.

• We'll get 30% back on our solar system, but more on that later!
• Battery Storage and Geothermal HVAC both have the same 30% tax credit, and we'll look more into battery storage in the next few years.  We're watching glass batteries closely!  More on why we did an air-source heat pump instead of geothermal is in our Gas-Free HVAC post from last summer. 
• Electric vehicles have options for both new and used models!  And electric vehicles keep getting better, even though a six-seater with the range I want is still a little out of reach.  I'm thinking the Chrysler Pacifica hybrid will be our next.  Even if it takes us another few years.
• We are looking at adding a second electrical service to our garage for vehicle charging and a better workshop, the IRA has additional tax credits up to $600 for projects done together! 

There is a lot that goes into full electrification.  But it is completely worth it!  Even though we missed out on a lot of the incentives, we lucked out in a lot of other ways, including availability of contractors, friends, and pre-inflation price points.  Looking ahead, I'm really excited to see what else we are able to do to increase the efficiency of our home and keep working our old-meets-new way of life.

I really encourage everyone to check out the Rewiring America website: the calculators provide a lot of insight and helpful tools for planning these big projects (not sponsored, I promise.  They did a really good job getting this information put together!).  Electrification can be done, and with the right planning, it can really be done anywhere.