A think tank producing rigorous, accessible data for advocates, policymakers, & the public.
Clarity and perspective
on state climate policy.
Decarbonizing New York State’s Homes
Agenda
1. Review subsidy design
2. Step through 3 sample households
3. High level outcome results
4. Review total program costs
5. Questions about mandate
subsidy design
UPgrade Scenarios
- Already have heat pump
- Heat pump alone lowers bills
- Heat pump + weatherization lowers bills
- Heat pump + weatherization + repairs lowers bills
- Insufficient subsidies
- Heat pump increases bills
Sample households
LMI
(Electrification + Weatherization)
Medium Income
(Electrification)
Medium Income
(Insufficient subsidy)
Moderate income - Electrification + weatherization
| Income | $65k |
| Occupants | 1 |
| County | Kings |
| % AMI | 80 % |
| Type | Single family |
| Size | 1,675 sqft |
| Current heat | Natural Gas |
| Annual Savings no weatherization |
| Total Heat Pump cost |
| Annual Savings with weatherization |
| Total Heat Pump + weatherization cost |
| Unsubsidized payback period |
| Income-based subsidy |
| IRA discount |
| Option 1: include replacement furnace cost |
| Out of pocket |
| B4B subsidy |
| Payback period |
| Option 2: exclude replacement furnace cost |
| Out of pocket |
| B4B subsidy |
| Payback period |
| -$28 (bills go up) |
| $15,420 |
| $658 |
| $16,702 |
| 12 years |
| 100% |
| $3,800 |
| None |
| $12,902 |
| None |
| $3,916 |
| $8,986 |
| 7 years |
MEDIum income - Electrification
| Income | $200K |
| Occupants | 4 |
| County | Queens |
| % AMI | 170 % |
| Type | Multifamily |
| Size | 2,115 sqft |
| Current heat | Natural Gas |
| Annual Savings no weatherization |
| Total Heat Pump |
| Annual Savings with weatherization |
| Total Heat Pump + weatherization cost |
| Unsubsidized payback period |
| Income-based subsidy |
| IRA discount |
| Option 1: include replacement furnace cost |
| Out of pocket |
| B4B subsidy |
| Payback period |
| Option 2: exclude replacement furnace cost |
| Out of pocket |
| B4B subsidy |
| Payback period |
| $1,973 |
| $23,750 |
| $3,118 |
| $26,369 |
| 12 years |
| 41% |
| $2,600 |
| $12,475 |
| $8,670 |
| 6 years |
| $14,340 |
| $6,800 |
| 7 years |
MEDIum income - Insufficient Subsidy
| Income | $150k |
| Occupants | 1 |
| County | Kings |
| % AMI | 180% |
| Type | Multifamily |
| Size | 1,140 sqft |
| Current heat | Natural Gas |
| Annual Savings no weatherization |
| Total Heat Pump cost |
| Annual Savings with weatherization |
| Total Heat Pump + weatherization cost |
| Unsubsidized payback period |
| Income-based subsidy |
| IRA discount |
| Option 1: include replacement furnace cost |
| Out of pocket |
| B4B subsidy |
| Payback period |
| Option 2: exclude replacement furnace cost |
| Out of pocket |
| B4B subsidy |
| Payback period |
| $218 |
| $29,340 |
| $1,866 |
| $31,043 |
| 16 years |
| 33% |
| $3,800 |
| $18,253 |
| $8,990 |
| 10 years |
| $19,586 |
| $7,656 |
| 11 years |
yearly cost to state
For those who meet a 7 year payback
If there is a mandate,
costs increase ~ $660 M a year
$16.5 B over 25 years
Who is in the insufficient subsidy group?
HOw far away are they?
New technology
55 % of Multifamily households would receive a window unit heat pump
Saving an average of $2,230 per household upgrade
Final questions
- Subsidies include baseline boiler cost?
- Mandate for those with insufficient subsidy?
- Mandate if bills go up?
- Maximum subsidy $ amount?
Who will electrify
Subsidized heat pumps can be paid back with energy savings in < 7 years
Will choose weatherization if
- Heat pumps alone increase bills
- Subsidy costs are lower (smaller heat pump)
Will choose if bills would increase without repairs and weatherization
Annual savings are not even to payback costs in < 7 years
*increasing subsidy amount can shrink this group
Heat pumps increase energy bill
Should this group be exempt from mandate?
Appendix
Moderate income - Electrification + weatherization
MEDIum income - Electrification
MEDIum income - Insufficient Subsidy
How long does this take to break even?
Median low income household
Cost breakdown
New technology
subsidized scenario
MEdian annual savings
How long does this take to breakeven
Effective payback
Moderate income - Electrification + weather
HH income - $90k
(70 % of AMI)
LMI
(Electrification + Weatherization)
1,140 sqft mutli-family
Total upgrade cost cheaper with weatherization
County = New York/Manhattan
Subsidize net
- HH pays - $3,763
Subsidze gross
Moderate income - Electrification + weather
TOTAL COST : $17,700
YEARLY SAVINGS: $786
- NY Subsidy - $10,136
- IRA - $3,800
- HH pays - $0
- NY Subsidy - $13,900
- IRA - $3,800
100% Subsidy
- Payback - 5 years
- Payback - 0 years
MEDIum income - Electrification
HH income - $200k
(170 % of AMI)
2,115 sqft mutli-family
Electrification alone would lower bills
Medium Income
(Electrification)
County = Queens
Medium income - Electrification
Subsidize net
- HH pays - $14,340
Subsidze gross
TOTAL COST : $23,750
YEARLY SAVINGS: $1,973
- NY Subsidy - $6,800
- IRA - $2,600
- HH pays - $12,475
- NY Subsidy - $8,670
41% Subsidy
- IRA - $2,600
- Payback - 7 years
- Payback - 6 years
MEDIum income - Insufficient Subsidy
HH income - $150k
(180 % of AMI)
1,140 sqft mutli-family
Current subsidy scheme is insufficient
County = Kings
Medium Income
(Insufficient subsidy)
Medium income - insufficient subsidy
Subsidize net
- HH pays - $19,249
Subsidze gross
TOTAL COST : $29,340
YEARLY SAVINGS: $220
- NY Subsidy - $7,490
- IRA - $2,600
- HH pays - $17,914
- NY Subsidy - $8,823
33% Subsidy
- IRA - $2,600
- Payback - 88 years
- Payback - 82 years
B4B Version 2
By Juan-Pablo Velez
