Characterizing uncertainties in residential electrification: Financial feasibility, climate impacts, and health outcomes

Low-to-moderate-income (LMI) families in the United States face disproportionately high energy costs due to inefficient housing and systemic underinvestment. Residential end-use electrification can deliver benefits to households and the broader public, depending on fuel type, technology, valuation methods, and other factors. This study extends prior residential electrification feasibility analyses by evaluating how Inflation Reduction Act (IRA) rebates and the monetization of climate and health co-benefits jointly affect the cost-effectiveness and adoption potential of residential energy efficiency and electrification retrofits. We define adoption potential as the share of households achieving a positive net present value (NPV) from retrofits, categorized into tiers: Tier 1 (households can recover total capital costs), Tier 2 (households can recover incremental upgrade costs relative to replacing existing equipment), and Tier 3 (additional subsidies justified by public benefits help households reach Tier 2). We find that heat pump water heaters show nearly universal adoption potential, suggesting prioritizing heat pump water heaters as accessible electrification entry points. Air-source heat pump (ASHP) retrofits exhibit fuel-specific adoption patterns, with ASHP adoption potential reaching up to 38% under IRA provisions. Heat pump clothes dryers and electric cooking ranges follow similar patterns to water heaters, though less pronounced. We also find that ASHP upgrades can reduce economic damages from criteria pollutant exposure in 85–96% of households. Moreover, we find that accounting for monetized public benefits from avoided greenhouse gas emissions can more than double ASHP adoption potential. Overall, this study highlights the value of societal impact assessment and robust uncertainty analysis in policy evaluation.