Electrifying Everything with Ari Matusiak of Rewiring America
Ari Matusiak is the founder and CEO of Rewiring America.
Rewiring America is a driving force in the movement to electrify everything. As our homes transition to using heat pumps for heating and cooling, induction stoves for cooking and electric vehicles for transportation, Rewiring America has established itself as the go-to expert resource to help us navigate this transition.
Ari boasts an impressive background that informs his leadership of the organization. He has experience in affordable housing, philanthropy, and the Obama White House, where he served as a special assistant to the president and director of private sector engagement. In this role, he managed the administration's relationships with Fortune 500 CEOs, Wall Street firms, and other business leaders. He then held the position of Chief Strategy Officer at Renovate America, the largest residential energy efficiency and renewable energy financing platform at the time. He was also a co-founder and chairman of Young Invincibles, a national nonprofit focused on creating economic opportunities for young adults.
In addition to leading Rewiring America, Ari is the managing partner at Purpose Venture Group, an advisory firm and incubator focused on launching community-centered ventures to tackle climate change and economic inequality.
In this conversation, Ari discusses Rewiring America's origin story, core work, and the home electrification measures in the Inflation Reduction Act. He provides perspective on the current status of US electrification progress and how each of us can contribute to advancing Rewiring America's mission.
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Ari Matusiak LinkedIn
Cody Simms X / LinkedIn
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Episode recorded on Aug 24, 2023 (Published on Oct 9, 2023)
In this episode, we cover:
[03:03]: The founding story of Rewiring America
[11:51]: Hurdles of electrifying homes
[15:58]: Tax credits available to homeowners through the IRA
[20:27]: Stackable rebates and tax credits through federal, state and local programs
[22:00]: Using Rewiring America's IRA Calculator to estimate benefits
[26:40]: Empowering people to electrify their homes and become active community guides
[30:50]: Countering the fossil fuel lobby with local storytellers and validators
[33:49]: Insights from Rewiring America's Pace of Progress Report on electric product adoption
[40:31]: Challenges and solutions to boost EV adoption
[43:04]: State of rooftop solar in the Pace of Progress report
[44:05]: Why rooftop solar remains essential
[46:28]: Electrification options for renters and apartment incentives
[50:16]: Ari’s outlook on electrification progress over the next decade
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Cody Simms (00:00):
On today's episode of My Climate Journey, we have Ari Matusiak, the founder, and CEO of Rewiring America. I'm excited about this episode as Rewiring America is a driving force in the movement to electrify everything. As our homes transition to using heat pumps for heating and cooling, induction stoves for cooking and electric vehicles for transportation, Rewiring America has established itself as the go-to expert resource to help us navigate this transition. Ari boasts an impressive background. He started his career focused on expanding access to affordable housing in Rhode Island. He then served as the VP of Strategy and Community Impact at the Rhode Island Foundation. He worked in the Obama White House as a special assistant to the president and director of private sector engagement.
(00:48):
In this role, he managed the administration's relationships with Fortune 500 CEOs, Wall Street firms, and other business leaders. He then held the position of Chief Strategy Officer at Renovate America, which at the time was the largest platform for residential energy efficiency and renewable energy financing in the nation. And he was co-founder and chairman of Young Invincibles, a national nonprofit focused on creating economic opportunities for young adults aged 18 to 34. Today, in addition to his work at Rewiring America, Ari serves as managing partner at Purpose Venture Group, an advisory firm and incubator dedicated to building community centered ventures that address climate and economic inequality.
(01:34):
During our conversation, Ari and I delved right into the origin story and core work of Rewiring America, the intricate home electrification measures outlined in the Inflation Reduction Act, the current status of electrification progress in the US, and how each of us can potentially contribute to advancing Rewiring America's mission moving forward. But before we start, I'm Cody Simms.
Yin Lu (01:58):
I'm Yin Lu.
Jason Jacobs (01:59):
And I'm Jason Jacobs, and welcome to My Climate Journey.
Yin Lu (02:05):
This show is a growing body of knowledge focused on climate change and potential solutions.
Cody Simms (02:11):
In this podcast, we traverse disciplines, industries, and opinions to better understand and make sense of the formidable problem of climate change and all the ways people like you and I can help. With that. Ari, welcome to the show.
Ari Matusiak (02:26):
Thanks, Cody. It's great to be here.
Cody Simms (02:28):
Well, as I was saying to you just a minute ago before we hit the record button, I feel like Rewiring America is this resource that all of us in the climate space have used and reference and really is the definitive source on home electrification. And yet, I don't know how it started. I don't know how it came together, and I'm really excited to learn from you about the journey of starting this thing and then let's go into the depths of where home electrification and all of that sits as of today in mid to late 2023.
Ari Matusiak (03:03):
Well, it's great to be here. Such a huge fan of MCJ and the whole community and we've really been lifted up by so many of the community members of MCJ over the years as we've been getting going and both through encouragement and advice and experience that we've benefited from. So just in terms of the founding story of Rewiring, we, Saul Griffith, Alex Laskey and I came together to get Rewiring off the ground, but the origin story is actually of people coming together. Saul and Alex had reconnected after some time. They were having a conversation about climate interventions. Saul had gotten a grant from the US Department of Energy to do Saul things, which basically mean creating sanky diagrams and mapping energy flows to 0.1% granularity in the United States.
(03:57):
So he had come to a perspective about the demand side being really important and electrification being the path forward on the climate crisis, but also as a way to reconnect people to the work as opposed to being exempted from it. So he and Alex were going around talking to people about that, and I had come to this point of view after having been in the White House and then working in renewable energy and energy efficiency financing at the residential level, that electrification was the answer and that we needed a new politics around climate. And effectively what ended up happening was all of us landed respectively at the doorstep of Richard Kauffman in New York who said, you all are each talking to me about the same thing. Why don't you talk to each other? In a way that's how Rewiring got off the ground with a strong assist from another longtime friend, Adam Zaretsky, who was also working with us in the early days on all this and helped put us all together.
(04:59):
So Rewiring really was at first oriented around two things in the summer of 2020, which was helping to shift the narrative to electrification of the machines that we rely on in our day-to-day lives and creating a policy framework around that in the event that there was an opportunity to do something with that in Washington. And we used that whiteboard behind me to draw out all the things that we would do if we had the pen. We put out some reports, we were generating some excitement. Saul went on Ezra Klein and did a podcast and got some traction around it, and then a bunch of things started happening, including a special election in Georgia, and then an opportunity for a real generational moment of investment in climate.
(05:48):
And we went after it and put together proposals and really started making what ended up becoming an organization that is focused on electrifying all the things in our lives, starting with the kitchen table decisions that we make, and ultimately helping to shape what went into the Inflation Reduction Act as a part of that.
Cody Simms (06:07):
First of all, what a cool story and talk about amazing timing both for all of us and the planet, but also for timing with respect to changes in the administration and having the organization just started right in advance of that or maybe not so amazing in terms of that, maybe you all were also a big part of helping to push change in that regard.
Ari Matusiak (06:29):
If you just think about climate strategy and solutions over the years there's been a lot of focus on big tectonic shifts in emissions, which are important. Things like the power generation or big industry shifts and a lot of focus on big machines from power plants to transmission lines to pipelines to all the rest. And when it comes to people in their day-to-day lives, it's been a mismatch between the urgency that people feel about climate and the pathway for addressing it. So you take a poll in the United States, pretty much any poll you take, you'll get some number that looks like 70% of Americans are concerned about climate. And actually if you talk to Republicans and Democrats, conservatives and more progressive politically oriented folks about this, talking about climate is resonant to them. They understand that. But then if you ask them what is the number one thing that they can do, their first answer is recycling.
(07:36):
And if you say, what's the number two thing that you can do? Their answer is not eating meat. And yet 42% of energy related emissions in this country are tied to kitchen table decisions about the cars we drive, how we heat the air and water in our homes, how we cook our food, how we dry our clothes, and how we power all those machines. And so for us it was really about trying to shift the frame to make this about collective action in terms of policy enablement, but unlocking the market in terms of day-to-day decisions that people are making all across the country every single day in their homes.
Cody Simms (08:14):
The takeaway I have from hearing that is I think there are many who work in climate who would say, hey, this is a systems change problem, it requires massive political will and it requires large scale industrial transition. What I'm hearing you say is yes, it does of course require political will and yes, all that industrial transition is important, but there's a consumer behavior change element here that the consumer sentiment is ready for, they just maybe haven't had the education or the policy support to help push it over the edge. Is that the right way to think about it?
Ari Matusiak (08:49):
The way I like to think about it is that we live in a fossil fuel world and the default mode in our lives is the inertia propels us to fossil fuel outcomes. I guess there may be some people that listen to this pod that are exceptions to the rule that I'm about to state, but I really have not met people who say, I can't wait for the new model of that water heater to come out because I'm totally upgrading next year. So maybe some people here are all after it about the heat pumps and what technology is coming out, but as a general matter, these are not things that people think about in their day-to-day lives. They depend on them though, these machines. And so if you are then in a moment where there is a decision to make about a replacement or an upgrade, there's an asymmetry with respect to understanding and awareness and then what to do.
(09:41):
And that creates a little bit of a chicken and egg dynamic where if you already have a fossil fuel infrastructure that repeats fossil fuel outcomes, if you try to break that chain where the person who is breaking the chain is the one who is least familiar and understanding and empowered to drive that decision, you're not going to do a very good job of breaking through the inertia and getting out of being in a fossil fuel world. There's a lot of policy work to do with respect to that. You can do things to bring down the front end cost of the efficient electric machines. That's a part of what we did in the Inflation Reduction Act. You can set policy levers that make it easier to get electric things as opposed to getting fossil fuel things, any number of tools to use.
(10:28):
But at the end of the day, those big tectonic shifts that you're talking about depend on people having machines that have plugs in that pipes, because if you electrify and decarbonize the grid and there are 121 million households that have pipes connected to the core appliances, those two things don't talk to each other. So we have to cause the system level change and see it all the way through. And actually it goes the other way, which is if you start to take a demand side view and create that flywheel effect of demand, a couple of things start to happen. It drives and creates more predictability for investors about the larger scale transitions and the pace at which those can happen.
(11:18):
But the other thing that it does is it connects people to the politics and the wheel building itself, because now they are contributing directly to the transition and they are a stakeholder in that. Because of how much money people save by being on better electric things, it ends up being a giant wealth transfer from energy producers to energy consumers, which also goes to resetting the politics and pushing for the kinds of things that we need to see all the way through.
Cody Simms (11:51):
I'm going to do a little storytelling here and regular listeners of the pod have probably heard this story from me, so I'll keep it short. But I think I did rooftop solar in 2020 and then in 2021 my water heater went out. It was a regular old gas water heater. I don't think I even knew the term heat pump yet. I called five or six plumbers in Yelp and said, I want an electric water heater. And they all said, electric's terrible, you don't want that, but I'll give you this awesome tankless gas water heater. I knew that's what I didn't want. I took to Twitter and I was asking what I should do, and people were like, heat pump, water heater, heat pump water heater. Here's the guy in Los Angeles that you need to call to get your heat pump water heater. I called the guy and he was great. Building Doctors.
(12:35):
Those of you who are in LA, look them up. Did my heat pump water heater, then did my whole home electrification audit. Eventually we did full HVAC, we did insulation, we did weathering, we did all this stuff. I did it too early I think for the Inflation Reduction Act credits unfortunately, but hey, the earlier the better in terms of emissions reductions I guess. But the fact that none of the plumbers or installers even were thinking about this and all of them were pushing gas, still is something that makes me concerned, and it's one thing to educate the consumers, but most consumers, when your water heater goes out, you just need a water heater like today because you don't want to take a cold shower. How does that cycle change as well?
Ari Matusiak (13:17):
It's huge. Explain that to your family. If you say, well, it's going to be awesome, we're going to have this heat pump, it's just going to be in four weeks.
Cody Simms (13:26):
It's going to be a few weeks. Go boil some water on the stove top for your bath.
Ari Matusiak (13:31):
Exactly. It's fine. It's going to build our constitution as a family. Most people are not going to do that. There's another version of that story actually, which is going to a contractor and saying, it's going to be great. You're going to sell so many of these you can't even imagine. And they say, but nobody's calling me for those things. That's the other side of the coin, because 85% of home improvement contractors in the United States do a million dollars or less of sales a year. They're small businesses. They need to have reliability and predictability to make an investment as a business owner in a technology, in a mode of working, in a sales channel that's going to be sustaining for their enterprise. So these two things need to work together, but we have been really focused on this idea of aggregating demand in local markets as a way to start to break through that inertia.
(14:26):
If you can effectively get a critical mass of households who are saying these are the options that they want, then it gives confidence to the technicians and to the contractors, et cetera to say, I want to be a part of that too. And so we've been really focused at first at the policy level and now as we're thinking about the consumer marketplace and how to build out the solutions to make the efficient electric machine the attractive thing for the homeowner. And the other thing to say about this is that there is a flywheel effect that starts to happen as we go, because the more things that we electrify in our home, the easier it is to electrify the other things.
(15:09):
So you having gotten the heat pump and the solar probably says something about your breaker box and your wiring in your home, and it's going to make it easier at the time that if the furnace is on the list, it's going to make it easier to replace that. It's going to make it more logical to go to the induction stove. So part of this is trying to connect these events to one another for the household.
Cody Simms (15:37):
At the time when I was trying to get it done, I think it was maybe a max $300 credit. Now you're talking potentially thousands of dollars. Presumably the plumbers and HVAC technicians and installers also are aware of those things and are helping homeowners make choices accordingly going forward too. One would hope.
Ari Matusiak (15:56):
Yes, exactly.
Cody Simms (15:58):
Let's actually dive into that just for those of you who are listening and are thinking about what changes you might make in your home. A lot of what was passed into law with the Inflation Reduction Act last year is actually starting to take effect I think by the end of this year and thus will be a 2023 tax benefit. Is that correct?
Ari Matusiak (16:19):
Yes. Well, the tax credits are available to people now exactly as you just said, as a 2023 tax benefit, and we have put together a calculator at rewiringamerica.org to help people understand what they are eligible for. In addition to the tax credits, there are a bunch of rebates that are coming online beginning next year, even in some places it might even be as early as the end of this year, that are also about these same machines and upgrades and that can be stacked with the tax credits and with state local and utility incentives as well.
Cody Simms (16:55):
So if I understand it, tax credits would essentially be a credit on my tax on the year I file the tax that I presumably had the work done. The rebate is a point of sale discount on whatever work I'm getting done. Is that the correct way to think about the differences?
Ari Matusiak (17:13):
That's the right way to think about it. There's some nuance on the rebates because there are multiple rebate programs, but effectively yes, the rebates are point of sale. The tax credits are exactly as you described.
Cody Simms (17:23):
And the tax credits are these programs called 25C and 25D, is that correct?
Ari Matusiak (17:30):
Yes, and there are 45s in addition to the 25s and yes, there are tax credits for cars that are tied to income, $7,000 for a new car, $4,000 for a used EV that I'm really excited actually about the tax credit for the used EVs because that's going to become a really material part of the market as we go forward. Then tax credits for rooftop solar and storage, which is a 30% tax credit on the overall system and job. And then tax credits on things like heat pumps, breaker boxes and weatherization.
Cody Simms (18:08):
And for solar, we've had a double-digit tax credit in place for a while now, but it was set to decline and expire. So this essentially renewed it all the way back up to a 30% level for the foreseeable future, is that correct?
Ari Matusiak (18:22):
This is a really important part of the Inflation Reduction Act, is it's durability and predictability. It's a 10-year policy, so it's not a hurry up, limited time offer kind of situation, which creates all kinds of perverted dynamics in the market. And with rooftop solar and now with storage too, the dynamic was really one where it was almost like a bit of a cardiac arrest situation where you didn't quite know if it was going to be renewed and then it was lumpy because it was going down and then it was negotiated at a better level, but then it was going to expire. Now it's increased above wherever it had been to the 30% mark and it's just straight away for a decade.
(19:07):
And that's really important from a consumer perspective because the way I think about it as the Inflation Reduction Act has created an electric bank account for every household in America. We need to make sure that they know about it and know how to access it, but it's there, it's something that they can use when the time is right for them.
Cody Simms (19:25):
Is it a same 30% tax credit for all the heat pump work, heat pump HVAC, water heater, et cetera?
Ari Matusiak (19:32):
The heat pumps are $2,000 tax credits. The weatherization is another $1,200 and the tax credit on a breaker box is $600. What's actually really powerful as well about the tax credits for all of those in general is that they are renewable every year. You can access up to $3,200 in those tax credits a year. So if you wanted to do the heat pump water heater in one year and then move on to get the heat pump replacement for your air conditioner and furnace, you could do that the following year and get again the tax credit as a benefit.
Cody Simms (20:09):
And then I presume these are independent from any local credit state or city government may offer as well.
Ari Matusiak (20:17):
Yes. That is really an important part of this, is that they are stackable. In different places it's going to be all kinds of opportunity on top of what's coming in from the federal government.
Cody Simms (20:27):
And then you mentioned that the EV credit had income restrictions on it. Does the home electrification credits around either solar or heat pump, are they also income focused?
Ari Matusiak (20:40):
No, they are not. The rebates are. This is one of the reasons why we built the calculator tool, is that there's a very powerful combining effect that can happen here. Anybody who has tax appetite and therefore for whom the tax credits are relevant and because they pay income taxes, those are available to any household. On an income restricted basis, households qualify for the rebates and those rebates go up to $14,000 per household. That is a significant additional amount of money. So $8,000 for a heat pump, $4,000 for a breaker box, another $1,500 for wiring, $840 for an induction stove. That's all part of the rebate program, but it can be stacked with the tax credits.
Cody Simms (21:31):
And again, rebates meaning it basically comes off your bill from the moment you buy it. And so if I'm understanding correctly, if you qualify your income is not too high perspective, then you get this massive discount at the point of purchase of these products, and then when you go to file your taxes at the end of the year, you presumably would qualify for an additional tax credit off of your taxes for the same products that you purchased.
Ari Matusiak (21:59):
That's right.
Cody Simms (22:00):
Super great. And I guess for folks who want to dive into it in detail, you mentioned on the Rewiring America website you have an IRA I guess calculator, last I checked on the right corner of the webpage. So for folks who want to go, you can enter your zip code, you can enter your household income, and it shows you which of these programs you might qualify for. And some of them are still coming online. Some of them aren't available yet, but will be available soon, is that right?
Ari Matusiak (22:25):
Right. The rebates in particular are the ones that are going to come online by the end of the year, early next year.
Cody Simms (22:30):
And I'm curious how those rebates work. If I qualify and want to get the rebates, now all of a sudden my home contractor or electrician or plumber or whatever is having to do income verification with me and figure out which rebates I've already taken in the past in order to reduce my bill at the point of sale. How in the world does that does work?
Ari Matusiak (22:52):
This is a big part of getting into what we're doing going forward as Rewiring to help resolve these issues. There's a whole process right now with the US Department of Energy in Washington has put out guidance to these what are called state energy offices who are going to get allocations of dollars from these rebate programs. And so they're designing how they're going to effectively go to market and what their go-to-market strategy is for distributing those dollars to make it work. A big piece of that is thinking through the seamlessness by which contractors and households each can access these dollars and make it work in real time. That's where we are actually spending a lot of time ourselves thinking through what are the tools to build to make that process as seamless as possible, because that's important.
(23:45):
One of the things that your community knows very well is that friction in an experience is not good. We're trying to get as much, in addition to bringing the cost down as much as possible to get the friction out, which is itself a cost and breakdown in the transition away from fossil fuel as a default.
Yin Lu (24:07):
Hey everyone, I'm Yin, a partner at MCJ Collective. Here to take a quick minute to tell you about our MCJ membership community, which was born out of a collective thirst for peer-to-peer learning and doing that goes beyond just listening to the podcast. We started in 2019 and have grown to thousands of members globally. Each week we're inspired by people who join with different backgrounds and points of view. What we all share is a deep curiosity to learn and a bias to action around ways to accelerate solutions to climate change. Some awesome initiatives have come out of the community. A number of founding teams have met, several nonprofits have been established, and a bunch of hiring has been done.
(24:41):
Many early stage investments have been made as well as ongoing events and programming like monthly women in climate meetups, idea jam sessions for early stage founders, climate book club, art workshops and more. Whether you've been in the climate space for a while or just embarking on your journey, having a community to support you is important. If you want to learn more, head over to mcjcollective.com and click on the members tab at the top. Thanks and enjoy the rest of the show.
Cody Simms (25:08):
And I guess an important implication and takeaway from what you just said is while the tax credits are clearly managed by the IRS and are part of filing your federal taxes every year, the rebates, even though it's Inflation Reduction Act dollars and it's federal government money, it's actually being managed presumably locally by, is it state agencies? Is it cities? Where do those dollars actually end up typically coming from?
Ari Matusiak (25:33):
They go to states and then the states have vehicles for distributing. So the good news is that it's not as though there's never been a rebate program at a state level. In one sense, the federal dollars are plugging into existing infrastructure. However, the key is to make sure that that existing infrastructure is well-designed, is easy to execute against, and works well for the end user, which is the consumer and the contractor.
Cody Simms (26:02):
So every state then is ultimately to some extent responsible for building the system that allows the contractor and the consumer to work together to access the rebates when they're getting work done.
Ari Matusiak (26:16):
I think you'll see a lot of convergence on that, meaning there's going to be a lot of shared best practices and good collaboration on that. But yes.
Cody Simms (26:26):
But what is available and how much is available is not up to state decision-making. Is that an accurate statement?
Ari Matusiak (26:33):
That's right. You have the amount that's in the Inflation Reduction Act and that's what you are eligible for if you're eligible.
Cody Simms (26:40):
And for individuals who care about how these programs get rolled out locally, are there typically ways for them to get involved and engage around that if you are a very concerned citizen and want to roll up your sleeves?
Ari Matusiak (26:54):
Well, we would love to hear from you, because a big part of what we're doing is building a bunch of technology and tools to help make that work, but also building the civic momentum to make sure that the implementation goes well everywhere.
Cody Simms (27:08):
I noticed you have a big get involved tab on the website. What are some of the community or I guess consumer activation pathways that you all are typically recommending folks to dive into?
Ari Matusiak (27:20):
I would say what's really heartening is how many people are eager to be a part of this overall transition and to do what they can in addition to making sure that their next fill in the blank is electric. That we've gotten thousands of people from across the country who are eager to take civic action. And so we are doing a number of things with respect to that. First, we are building a lot of software tools to make the whole experience more seamless for people. We're launching a consumer awareness campaign and website that effectively becomes the place where people can get educated and get connected to what we call our personal electrification planning tool, which we'll be rolling out this fall, which meets you where you are as a household and gets you to the plan that makes sense for you for both the immediate thing that you're worried about as well as medium term, how do you get from your current state to your future electric state?
(28:25):
As a part of that, we're taking our calculator and we are turning it into effectively a way to connect that plan to all of the money that you are eligible for from federal to local and utility dollars, all in one seamless logic as opposed to having to manage all of that yourself. And all of that will connect to a marketplace of contractors to go fulfill that work. There's a whole effort to make that much more seamless at just the retail level, and we are really focused on building that experience and that capability and infrastructure. But then a big part of this is educating people about what makes sense. And so I worked in the Obama White House and one of the things that I worked on was healthcare or Obamacare now as it's called and known.
(29:17):
And one of the things that was in that law was something that we called navigators, which were people that were actually expressly engaged to help folks in communities understand what their options were and get enrolled in health insurance. There is nothing like that in the Inflation Reduction Act. And so a big part of what we're doing is training people up in, we're starting these courses to train people up to become electrification enthusiasts locally, to be the guides in their community and then to do what we call our 201 course, which is a much more rigorous thing where people can actually be almost like a concierge service to households. So that's all in the retail context of people engaging and being activated locally to help friends and neighbors and also themselves.
(30:08):
But as a part of that, as people come in and work with us, our big belief is that as people are taking consumer action, they become more interested in understanding what is going on in their community and how things are going or not going. And so we are also tracking all of the implementation that's happening around the country. And our goal from a political wheel building perspective is to connect all of these people who are interested in doing the stuff for themselves and in their community to frankly an understanding of how it's going as a way for them to weigh in and help move things forward.
Cody Simms (30:50):
Wow. The electrification evangelist function, I don't think that's what you called it, but that was my takeaway from it. It sounds super cool. Is that a thing someone can sign up to look into today or this is a thing you're starting to build out?
Ari Matusiak (31:03):
We're starting to build out. We're piloting it now and testing, and we'll roll it out by the end of the year. We're running people through some courses right now just to figure out all the things that we don't know and need to learn, but we're excited about it because our big belief on this is that this becomes like a trusted messenger effort. Said another way, the fossil fuel lobby spends a lot more money than we have on their story. However, the good news here is that we have better stuff and more passionate people. There's a really exciting way to connect people as storytellers and validators to their friends, family and neighbors in a way that we think can break through some of this chicken and egg dynamic of not aggregating demand and not creating enough of a signal for those small business contractors and all the rest. And so that's a big part of what we're trying to accomplish.
Cody Simms (32:00):
I think our mutual friend, Michael Thomas, who has been on the pod before has covered a lot of ways that anti-renewable sentiment spreads on social media in his investigative reporting. For folks who want to dive into that, go back to the archives and listen to that episode. It's a good one. But what I'm hearing you say is, hey, there's a lot of incredible knowledge that people need to know about how home electrification works, and let's train up as many people as we can who care about it, to be able to then themselves go be community storytellers, post on Nextdoor, post on Facebook, talk to their friends and neighbors about it, and just help the world understand what's really happening with respect to some of these new technologies.
(32:44):
And new can be scary to some people. And so the more you can help people share facts and information, the easier it might be for people to understand change.
Ari Matusiak (32:54):
Yeah, in a sense, we might be talking about technology that people don't today have, but we're not talking about things that are foreign to people. Because in the end you're talking about furnaces and water heaters and stoves and cars. If you just think about your own life and experience, people talk to each other about what they're doing with their kids, what they're doing in their houses, whether this person that they hired did a good job and they'd recommend them. And so there's a real way to unlock that, because you could even see it as people bring an EV to the parking lot for the first time and people come up and they ask, what do you think about it? Are you worried about the range? Is it easy to use?
(33:36):
These things just come out in the conversation, and I think there's a real opportunity for us to take advantage of that and stuff that people like to talk about because it's also stuff that they just did.
Cody Simms (33:49):
Speaking of things not technically being new. And I know you were saying, hey, we all have water heaters, we all have HVAC. Even beyond that, I was reading your recent pace of progress reports that you all just put out, which is tracking adoption of these new electrified versions of these technologies. And I was actually surprised to see that 16% of homes today use heat pumps for space heating. I would've thought that number was lower. All the other electrification technologies were 5% or less. Share a little bit more about that, because that was a shock to me.
Ari Matusiak (34:25):
That's an awesome question. I love our pace of progress. It's like one of my favorite things. So what's really interesting about the United States, is that it is such a large and diverse country in so many ways inclusive of our housing stock, and where you are has in bearing on what stuff you have in your house. And so in the Southeast as an example, a small thing called the Tennessee Valley Authority was created and it became the driver in the 50s of a lot of homes that were built. And as those homes were built, they were built electric. And in fact, there was a whole campaign to build electric homes called the Gold Medallion Electric Home. People had this on their houses as a placard, and Ronald Reagan was the spokesperson for it doing infomercials an hour at a time.
Cody Simms (35:20):
Wow.
Ari Matusiak (35:21):
At that moment in American history and American home building history, there was a concentration of new construction that was electric, and it was not heat pumps, it was like electric resistance, which is terribly inefficient, but as that stock is being retrofitted and renovated and all the rest, heat pumps are going in because the baseline is electric, it's not something else. If you compare that to New England, that's not the case because you have a huge number of homes that are on delivered fuel oil and they have to make a bigger transition.
Cody Simms (35:55):
I live in the West coast. When I first heard of delivered fuel oil, my mind was blown. So for our listeners who aren't familiar with how homes are heated in New England, can you share a little bit more about it please?
Ari Matusiak (36:06):
Yeah, if you want to do the deep cut on My Climate Journey, it starts with the apartment that I rented after I graduated from college in 1999 in Providence, Rhode Island. It was an old three-story house. First floor was the apartment that I rented. My rent was $650 a month. My income was $22,500 a year, and my heating bill was $650 a month because it was fuel oil. And the way that that worked was the truck came, that boils oil came backed up into the driveway, filled up an enormous tank with oil, then a machine in the basement of the house lit on fire to put steam through the radiators. Not efficient. And a lot of homes are built that way. It is one of the examples of a huge opportunity that we have to electrify and help people save thousands and thousands of dollars a year on their energy bills.
Cody Simms (37:07):
Incredible. Literally burning oil in the basement of your home to heat your home.
Ari Matusiak (37:12):
Exactly. It turns out setting things on fire in your house is generally speaking, not great. And many to most of our homes are doing that today, but some more viscerally than others.
Cody Simms (37:23):
I presume when a home like that upgrades to a heat pump, is there a greater overall emission saving than say a home that's on natural gas as an example?
Ari Matusiak (37:33):
Yeah, certainly the emissions profile of a home that's on fuel oil, there's a significant benefit from doing that. But the emissions profiles for natural gas are also really large, in large measure because of the leakage of methane on the pipeline from the fossil fuel plant to the house. In the delivered fuel context, you're really looking at the emissions of what you are lighting on fire in your house in order to heat your home. In the fossil fuel context, you are also looking at the burn of the natural gas in your home, but then you also have to track all of the missions that are coming from the generation to the transmission as well.
Cody Simms (38:16):
All the way up to the pipeline. And so really each of us individually moving off of gas is obviously a good thing. We're burning less and presumably releasing less methane into the air, but it's the forcing function of an entire neighborhood for example, moving to electric, then you can basically stop the transmission side of things that might make the biggest difference on the gas side. I don't know if that's the right way to think about it or not.
Ari Matusiak (38:39):
You could think about what's your share of the leakage and the emissions all the way through. And so all of that benefit is happening as you electrify. And the other thing to say about this is that electric machines are appreciating climate assets basically. Because as you put electric machines into your home, they have a useful life of 10, 15, 20 years depending on what kind of machine you're talking about. And the grid is getting cleaner and cleaner with each successive year. So as the years go on, the actual climate performance, the emissions performance of what you are installing is getting stronger and better as you go.
Cody Simms (39:20):
Totally makes sense. Good way to think about it for sure. Let's hit on a couple more of these in your pace of progress report. The one with the lowest adoption is the heat pump water heater. I assume that's just because it's newer tech. Is that right?
Ari Matusiak (39:35):
I think that's a big part of it. It's also a more standard fare replacement and there's less tolerance of the cold shower dynamic, I would assume is a part of that too. So the inertia is part of the breakthrough because people in the hot water context are really often replacing in an emergency even more so.
Cody Simms (39:56):
Emergency. And same with me. Again, we went through a week plus of no hot water, and I was not the most popular guy in my house when that was happening in order to make sure we got the heat pump water heater.
Ari Matusiak (40:07):
Exactly.
Cody Simms (40:08):
Because the local plumbers, again, weren't doing it. So again, hopefully that flywheel gets fixed. I will say one of the cool benefits when we move to a heat pump water heater is the water heater used to be in a bathroom in a closet, the gas water heater, and we removed that. That's now a full closet. We can put stuff in there, and the heat pump water heater actually moved out to our garage, which was great. It opened up more room in our house.
Ari Matusiak (40:30):
All the benefits.
Cody Simms (40:31):
And then EVs and rooftop solar, both a little bit greater percentage. I think EVs seems like the cat's out of the bag there in terms of growth of the EV sector. But curious to hear your thoughts on what needs to happen next to really drive EV volume further and where the current hurdles are for continued growth in EVs.
Ari Matusiak (40:53):
Well, certainly one of the hurdles to overcome is the choice and selection. And so the fact that the manufacturers are coming out with, I think GM has 30 some odd models that are coming out over the next couple of years. That's important because among the list of models is not just the Cadillac Escalade, but also the refresh of the Chevy Bolt and cars that are affordable to people as they make those considerations. So that is a big part of what is going to be a gate for EV adoption, is just the rate of production and then the diversity of the selection there. I think the other aspect of this is really just the maturation of that market as a whole. We were talking a little bit earlier about the used EV tax credit. That is critical because a lot of people buy used cars, because that's what they can afford and also because that's where there's a lot of value.
(41:49):
And the good thing about an EV among the many other good things about EVs is that they are much lower cost to operate and much lower risk to purchase as a used asset than an internal combustion engine car. So you're going to end up seeing a dynamic where in a couple of years people are buying a used EV on the lot and they're going to be buying it for a very low cost because of the used tax credit plus the depreciation of the car itself. So that's one of the big things. And then of course the other is just the infrastructure that's being invested in for charging and all the rest. That's a big part of the whole transition to get people comfortable.
Cody Simms (42:30):
One thing I would think Rewiring could do a really great job of, that I don't know that I've seen, is a total cost of ownership calculator for an EV that includes the tax credits, but also includes the lack of maintenance and the lack of gas purchasing offset by obviously the need to pay for electric charging, but which is a fraction of gasoline costs. Each manufacturer has their own little calculator on their website that I don't know that I always trust. It seems like you guys could do a great job there.
Ari Matusiak (42:59):
That is coming, that's going to be part of our personal application planning tool. Yep, absolutely.
Cody Simms (43:04):
That's great. And then rooftop solar, where are we? It seems like you almost get to the point where it's like, do you really even need rooftop solar anymore? There's so much excess electricity, renewable solar on the grid already in places like California, et cetera. I assume the answer is, of course, we need more of it, but I'd love to hear your thoughts on how you see this space continuing to evolve.
Ari Matusiak (43:26):
Great question. So if you just take a step back and just think about the housing sector alone, there are 121 million households in the United States. There are a billion machines that need to be installed or replaced as electric over the next couple of decades per our pace of progress report. It's a lot of machines, and that's a lot more load on the grid. So then the question becomes, well, where is the generation for that going to come from? Well, a lot of it, of course is going to come from big projects, utility scale, renewable energy projects that are being built and cited and all the rest. But about a third of that should come from rooftop solar. And so we need a lot more rooftop solar in order to meet our transition.
(44:08):
And in some places and cases, it's actually a really important part of the strategy for making electrification something that really helps the family save immediately as opposed to over the amortized cost of the improvements that they're making to their house. So we think rooftop solar is a huge part of the strategy. It doesn't make sense everywhere. Sometimes it doesn't make sense because the roof can't handle it, or sometimes it doesn't make sense because you live in a forest, but in a lot of cases it will be a part of the transition.
Cody Simms (44:42):
I recorded just yesterday, and I don't know if the episode will be live by the time our conversation goes live, but I recorded with Julia Souder, who is the CEO of the LDES Council, the Long Duration Energy Storage Council, and she was saying how energy storage is projected to undergo some of the same adoption curves over the next decade that solar went through over the last decade, which would lead you to believe that creating more renewable generation is of course a good thing because the ability to store and use it when the grid needs it is going to only continue to increase in its availability.
Ari Matusiak (45:20):
I think the one thing that is important for people to just remember is we get this question a lot, I get this question a lot, which is, can we handle all of this electric stuff? And it's a good question, because there's a lot of infrastructure that goes with that transition. But the reality is that actually the best way to handle the transition to an electric feature is actually to electrify more things. And part of the reason for that is because you can start to get the load management and the virtual power plants and all the things that come with having electric stuff and electric machines in people's homes that can help support and compliment long duration energy storage and grid management and all the rest of that.
(46:07):
And so a big way to think about what's going to be the future is that our homes are going to be part of these virtual power plants, but in addition to that, we're all going to be contributing to the grid management through the storage that we are natively buying through the machines that we're putting in our house and in our driveways and garages.
Cody Simms (46:28):
One of the knocks on prior rooftop solar policy is that it really was only something that homeowners could take advantage of. I'm curious how the new policies and the new rebates and the new credits that are online or coming online soon are also available to renters, not just rooftop solar, but in general.
Ari Matusiak (46:51):
Yes. Well, there are incentives that are available for people to take advantage of for community solar to participate in those kinds of programs where people can realize real savings on their energy bills as a result. Obviously that's more indirect than causing installation to go on one's roof, but it's part of investing in that transition. But a big part of where the opportunity is, is actually in creating better vehicles for property owners to electrify. And there is, getting into the weeds a little bit, but there was a pretty important set of changes to the tax credit structure that allows for nonprofits to directly own and manage the tax credits.
(47:36):
The reason why that's important is because for an individual building, think about it as like a four unit or a 10 unit apartment building that would be a great candidate for rooftop solar. Historically it's been really hard to make the math work because the people who would be the buyers of these tax credits need much bigger projects than that. So now we can have more of a community-based solution, and there's a lot of exciting work happening there to help drive the transition of the rental housing market as well as the single family ownership market.
Cody Simms (48:11):
If I am a renter and I want to push my landlord to do more around electrification in general, where should I start?
Ari Matusiak (48:21):
Come to our website at rewiringamerica.org and we have a set of guides for renters as well as homeowners, and that personal electrification planning tool that I mentioned is going to have basically a pathway for renters that will involve and include them being in a communication with their landlords as well, in addition to stuff that a renter can do on their own, a way for them to engage with landlords as well.
Cody Simms (48:45):
I assume some of the easier projects might be things like induction stove, et cetera, where there's a lot less in-home infrastructure that needs to get put in place in order to do that swap potentially.
Ari Matusiak (48:56):
Yeah. What's interesting is that the Inflation Reduction Act benefits and incentives, they apply to things that renters can get too. We're pretty confident that the result of this is going to be that in window unit heat pumps, of which there are now a number of models. That's something that a tenant can buy, get the benefit from the Inflation Reduction Act for, and then take it with them if they're moving to a different place, but they don't need to engage their landlord in that conversation. Similarly speaking, of course, people are going to get a car, that's a personal decision, but you can even use the Inflation Reduction Act money for induction of hot plates.
Cody Simms (49:33):
Oh, yeah. You can buy $100 hot plate on Amazon or whatever. Okay.
Ari Matusiak (49:38):
Exactly. And you can use it in place of your stove.
Cody Simms (49:42):
I've seen people do that where you just put a cutting board on top of your existing gas stove and then put the hot plates on top of the cutting board, and it works great.
Ari Matusiak (49:50):
I think a very cool product as an aside, would be something that just laid on top of a gas stove and was the induction topper. But yes, that's a use case for the Inflation Reduction Act too. It's obviously easier if someone is retrofitting easier in the sense of more complete if someone is retrofitting their whole home, but it's not as though renters have no pathways or options through all of the incentives that have come forward.
Cody Simms (50:16):
Well, Ari, I know we're running up on some time limits that we have with respect to the conversation. Before we go, I want to hear from you what you think the next decade's going to look like. I'll give you two hypotheticals. One, we're coming up on an election year as much as it pains me to realize that, is there a chance that all of the goodness we just talked about could go poof? You worked on Obamacare and there's been a lot of efforts to try to unwind it. They haven't been successful, but it's certainly been an attempt. And then two, regardless of that, where do you see the US in particular going over the next decade from an electrification perspective?
Ari Matusiak (50:53):
I'm very bullish on this. I'm not a big believer in the politics of poof. What's really incumbent on us is to connect people to their electric bank accounts into the experience of getting better things. And as that happens, it's pretty hard to take that away from people. That's a consumer benefit that is directly toward making it easier for families to get stuff that helps them and that they like. Politically that's not the best place to start when it comes to taking things away. It doesn't mean that it can't happen, but I just don't see that being the future. Instead I think what is more likely the case is that we are going to start seeing the flywheel effects of people getting electric things, liking them, talking about them with their family and friends, and then getting more electric things. I think the next decade is going to be one where the home is going to be the center of our climate strategy.
(51:55):
Actually it is going to be a decade where we start to connect the dots between individual purchasing decisions and think about this more as a system. But again, at the household level and that household engagement and participation is going to drive a politics that helps us meet what is effectively a make or break decade moment to address the climate crisis and get onto the right trajectory. I'm bullish. There's a lot of work to do and it's not going to be easy, but the most important things aren't easy, that's how it works, and so it's worth taking a run at.
Cody Simms (52:36):
Well, that's the right note to end on. I so appreciate you taking the time to come on and share your knowledge with us, unpack what it is you're doing at Rewiring America and giving our listeners a chance to go check out some of the incredible resources that you all have put together. Thank you so much.
Ari Matusiak (52:53):
Thank you.
Jason Jacobs (52:54):
Thanks again for joining us on My Climate Journey podcast.
Cody Simms (52:58):
At MCJ Collective, we're all about powering collective innovation for climate solutions by breaking down silos and unleashing problem solving capacity.
Jason Jacobs (53:07):
If you'd like to learn more about MCJ Collective, visit us at mcjcollective.com. And if you have a guest suggestion, let us know that via Twitter at MCJ pod.
Yin Lu (53:20):
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Cody Simms (53:30):
Thanks, and see you next episode.
