Electrifying more than 240,000 gas-powered housing units in San Francisco could cost between $3.5 billion and $5.9 billion, the city estimated in a new report. The report said a "key barrier" to electrical retrofits is the "financial burden" that would fall on property owners, city government or both.
Supervisor Gordon Mar, who commissioned the report issued on Earth Day, called for a hearing to come up with solutions.
"It's important that the plan has an aggressive time frame given the urgency of the climate crisis, but we also need to ensure that it's equitable and it doesn't place undue financial burden on homeowners and tenants," Mar told The Chronicle. "That's the challenge given the large cost."
San Francisco set a goal of achieving net-zero greenhouse gas emissions by 2050 and California mandates a 40 percent reduction in greenhouse gas emissions by 2030. Natural gas in buildings — mostly water heaters, furnaces, ovens and stoves — currently accounts for 38 percent of the city's greenhouse gas emissions, according to the San Francisco Department of the Environment.
The Board of Supervisors already unanimously banned natural gas in new buildings last year, but new construction is the low-hanging fruit of electrification that dozens of cities across California have already picked. The real challenge is retrofitting and the question of who will pay for it, and how, with such an eye-popping price tag.
"Quite honestly, it would not be possible or feasible to mandate a retrofit of this magnitude," Charley Goss, Government and Community Affairs manager at the San Francisco Apartment Association, said in an emailed statement. "It's more practical for the City to focus on eliminating greenhouse gasses by building dense housing near transit corridors and eliminating parking requirements."
To ease the financial burden, the report said the Board of Supervisors could mandate retrofitting at the time of building sale, at the time of natural replacement or incentivizing retrofits by charging property owners a fee for greenhouse gas emissions, which New York City does for larger buildings.
Requiring retrofits on the natural replacement cycle could drop total costs to between $642 million and $2 billion — but could take decades to accomplish with gas appliances such as furnaces lasting up to 30 years.
Electricity also costs more than natural gas, although electric appliances are often more energy efficient. However, experts predict the costs will even out, and electricity may become cheaper, in future decades.
San Francisco could choose to fund a retrofit program, the report suggested. Charging residential energy users a tax similar to the one commercial users pay now could generate $11.5 million a year. Another possibility is rebates: Sacramento's utility district gives a rebate of up to $13,750 for ratepayers to convert their homes from gas to electric. San Jose grant-funds rebates up to $6,000 for low-income and $4,500 for a limited number of others.
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