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A U.S. appeals court upheld the first-in-the-nation measure, which will slash smog-forming emissions from certain gas-fueled boilers and heaters in the region.
Southern California’s landmark rule to slash emissions from industrial heating sources just notched a major victory in court.
The region has some of the worst air quality in the U.S., and the gas-fueled boilers and water heaters that serve its factories and large buildings are a key culprit.
In 2024, air quality regulators passed a first-in-the-nation rule to clean up those dirty sources. Since then, opponents of the measure — including gas-appliance makers and trade groups for pipefitters and building contractors — have tried repeatedly to quash it. But last week, the U.S. Ninth Circuit Court of Appeals upheld the regulation, which is meant to spur a shift toward clean, electrified technologies.
The standard, which took effect in January despite the legal challenge, gradually eliminates emissions of nitrogen oxides (NOx) from more than 1 million gas appliances across Greater Los Angeles.
“It was a big win for folks who breathe air in Southern California,” Candice Youngblood, a senior attorney for Earthjustice, which intervened to defend the rule in court, said by phone. “The court fully understood how important this rule is to saving lives.”
The South Coast Air Quality Management District set limits on NOx emissions for light-industrial and commercial boilers, steam generators, and process heaters, as well as residential pool heaters and tankless water heaters. The rules currently affect small units installed in new buildings, but they’ll broaden in scope until covering new high-temperature units installed in existing buildings in 2033. Existing gas equipment must be replaced with zero-emission units once it reaches a certain age, or at the end of its useful life, depending on the appliance.
A spokesperson for the South Coast air district stressed that the rule does not ban gas appliances but rather regulates emissions. The agency said it “remains committed to developing technology-neutral solutions that protect public health, reduce harmful nitrogen oxide (NOx) emissions, and move the region closer to meeting federal air quality standards.”
The measure is ultimately expected to reduce pollution by 5.6 tons of NOx per day — the same as halving smog-forming emissions from cars in the air district, where more than 17 million people live.
Yet the policy is likely to make an impact well beyond the four-county region. Proponents say a major goal of setting the zero-emission standard is to signal to heat pump manufacturers and other clean technology suppliers to start ramping up production — which could benefit industrial electrification efforts elsewhere by driving down appliance costs.
The Ninth Circuit’s ruling comes as California is pushing to decarbonize all corners of its $4.3 trillion economy. Manufacturing facilities are responsible for more than one-fifth of annual greenhouse gas emissions in the state, making them the largest source after transportation.
Last year, Democratic Gov. Gavin Newsom signed a law, Assembly Bill 1280, that expands incentive programs to help manufacturers install industrial heat pumps, thermal storage systems, and other electrified equipment. Utilities and state lawmakers are also developing new electricity rate structures that would lower the cost of operating electric appliances.
Such efforts are meant to address the financial challenges that can come with switching to electric appliances in industrial settings. Cleaner alternatives, such as heat pumps and electric boilers, are typically more expensive up front. Electricity is often far more expensive as a fuel than natural gas, especially for large industrial users — an issue that’s true in California as well in other parts of the country, including the Upper Midwest and Northeast.
If policies can help overcome those hurdles, industrial firms stand to reap significant economic benefits by reducing their exposure to volatile fossil fuel prices, making their operations more efficient, and lowering their energy bills over time. All told, electrifying the entire U.S. industrial sector could generate around $471 billion in total economic growth through 2035, according to a recent analysis by the Renewable Thermal Collaborative and the Industrial Heat Pump Alliance.
California is well positioned to capture some of those benefits, given its existing climate policies and high levels of industrial activity. The state could see over $31 billion from the construction, installation, and manufacturing of electrified technologies, as well as indirect effects from growing supply chains, the report said. That’s even accounting for the expected decline in economic activity and job losses from gas-equipment makers and service providers.
The gas industry, however, sees the Golden State’s electrification push as a threat.
Last year, Southern California Gas, the nation’s largest gas-distribution utility, helped sink the air district’s separate plan to push households away from gas-burning space and water heaters and toward electric heat pumps. Rinnai America, which manufactures gas appliances, has led the legal fight against the zero-emission standards for boilers and water heaters.
In July 2025, a U.S. district court upheld the clean boiler rules, rejecting opponents’ argument that the measure conflicts with the federal Energy Policy and Conservation Act and thus isn’t valid. Rinnai and other plaintiffs have continued to fight the policy, resulting in the Ninth Circuit’s July 2 decision to affirm the district court’s earlier ruling.
The opposition will still have a chance to challenge the policy again, by asking the Ninth Circuit to review its ruling, Youngblood said. In the meantime, Southern California regulators are preparing to propose a new set of rules for larger commercial and industrial systems in the region, which the agency staff aims to present to its board by the end of this year.
Startup Electra is outfitting induction stoves with slender batteries that enable the electric appliances to be plugged into a standard outlet — and help the grid.
BROOKLYN, N.Y. — When the startup Electra Research launched four years ago, its founders set out to hook more batteries up to the electric grid. Energy storage is key to balancing the coming and going of wind and solar power, and it can help reduce strain on the electricity system during the busiest hours.
But with the line to plug into the grid being very, very long, Electra opted for a faster route: It would put batteries directly in people’s homes, only with a twist. Instead of installing whole-home backup storage, the firm would pair smaller batteries with energy-intensive appliances. The goal was to help people clean up their homes, reduce energy use — and add some useful capacity to the broader electricity system.
“It became clear that the straightforward thing to do is to colocate a battery with the biggest loads in the house, which are water heating, refrigeration, HVAC, and cooking,” Bert Muthalaly, Electra’s CEO, told me from the startup’s new warehouse in Brooklyn.
“And when you look at it that way, there is one that people care about,” he said. “People love their stoves.”
Today, Electra makes battery-powered induction stoves, which it began shipping to U.S. customers in April. The startup recently gave me a first look at its operation on the edge of Brooklyn’s Bushwick neighborhood, where the glass-fronted warehouse sits somewhere between a pickle-packing plant and a kitchen-supply distributor.
When I visited on a cloudy day in late June, Alexia Avina was rewiring a 305-pound appliance to connect a slender battery pack, which replaces the drawer that holds broiler trays and pans. Electra does the metalwork for its stoves in China and final assembly at the Brooklyn facility, turning them into energy-storing, Wi-Fi-enabled devices — ones that won’t fill your kitchen with harmful pollution by burning natural gas.
Avina joined the team in May, having mainly worked in restaurants and as a musician before training with Electra’s engineers to outfit the stoves. “It’s been cool to learn something totally different,” she said later while standing next to stacks of stoves packed in cardboard boxes. “It’s rare to have hands-on opportunities like this.”
Unlike many induction stoves on the market, Electra’s model can plug into a standard 120-volt outlet and draw power to charge a 5-kilowatt-hour battery. The induction cooktop heats pans directly using electromagnetism, while the oven cooks food using electric-resistance elements.
Customers can choose to turn their batteries into helpful grid tools. With its software partners, Electra directs the batteries to charge up during the most beneficial times — for example, when solar power production is most abundant — and to discharge power during the grid’s peak demand periods. Electra estimates its appliance uses roughly 80% less peak power than a typical electric-resistance stove.
The company now employs nearly two dozen people, eight of whom work on the Brooklyn production line. It’s self-funded but declined to share financial details.
Electra’s appliances are hitting the market at a time when induction cooking is becoming increasingly popular in American kitchens. The technology cooks faster and more efficiently than gas and traditional electric appliances, and, unlike gas stoves, it doesn’t release pollutants that can harm people’s health. Although federal rebates for electrification expired early under the Trump administration, some states and utilities still offer incentives to help defray the upfront cost of going electric.
Electra’s induction stove costs $3,999. That’s more than triple the price of Wirecutter’s highest-rated electric range — although because that model uses 240 volts, it might require upgrading a home’s electrical panel, rewiring the kitchen, or hiring electricians to hook it up. All that can add thousands of dollars to the final bill. Electra says its unit avoids those added costs and, thanks to its battery, can even operate for several meals in a blackout.
The plug-in-ready approach is similar to that of Copper and Impulse Labs, two leading companies in the niche but growing category of battery-powered induction ranges (who, as it happens, are suing each other). California-based Copper has sold over 1,000 units, and it was awarded $32 million last year to design, test, and install 10,000 of its stoves in New York City public housing facilities. Electra says it designed its own model for that same competition.
The startup began receiving stoves from China around three months ago. Electra has since shipped 75 of its appliances from Brooklyn to customers across the United States, and it plans to send out thousands more by the end of this year. Early data show that people who cook frequently are still using only about a fifth of the battery’s power per day, which bodes well for the lithium iron phosphate device’s longevity, Muthalaly said.
The company is also developing a pilot program with the city of Burbank, California, to help residents electrify their kitchens. And it’s partnering with a property owner closer to home, in the Bronx, to equip an 80-unit apartment building with its stoves. In both California and New York, local building codes are effectively pushing natural gas appliances out of new buildings in order to reduce carbon emissions and improve air quality, raising the incentive for households to explore options like Electra’s.
Muthalaly described Electra as a “climate research lab,” and the company continues to refine and develop its stove technology. Greg Shakar, an electrical engineer on staff, was testing a unit for electromagnetic “noise,” or unwanted radio interference, when I walked through the side of the warehouse dedicated to R&D.
But as orders pick up, Muthalaly said the company is constantly evaluating which parts of the assembly process should remain in-house or should move overseas for higher-volume, lower-cost manufacturing.
“We’re thinking about this as an experiment,” Muthalaly said of the Brooklyn operation. “We’re going slow, but we’re learning from each install. And it’s getting smoother and smoother.”
A correction was made on July 6, 2026: This story originally stated that the battery sits beneath the drawer that holds broiler trays and pans, when in fact it replaces the drawer.
New York City’s green building laws are pushing developers toward cleaner technologies — even as state policymakers backtrack on climate change targets.
NEW YORK CITY — Manhattan is teeming with skyscrapers that seem to reach into the clouds. But a gleaming commercial building near the Hudson River is more impressive for how it stretches down into the dirt.
Beneath the floors of 555 Greenwich St. are 68 geothermal energy piles that run nearly 120 feet deep, dodging utility pipes and tunnels that crisscross the busy urban underground. During the sweltering summer, the long vertical piles collect heat from the 16-story building and dump it into the earth, cooling the offices above. In the chillier months, the equipment retrieves that warmth to keep the rooms cozy.
The geothermal system is a key reason why 555 Greenwich can operate without using fossil fuels, making it the city’s first commercial office building to hit that milestone. That’s according to the owner, Hudson Square Properties, which is a joint venture of the real estate company Hines, Trinity Church NYC, and the investment arm of Norway’s sovereign wealth fund.
The building, which finished construction in 2023, should be able to meet half of its heating and cooling needs from geothermal when fully occupied, said Jason Alderman, senior managing director and head of New York at Hines. The other half will be met primarily by the two enormous air-source heat pumps sitting on the rooftop, which overlooks the city’s most iconic towers and the green edges of Central Park.
When I visited the 270,000-square-foot property in early June, Alderman explained that the fossil fuel–free building is a reflection of both New York City’s aggressive climate change policies and the partners’ own ambitions for a highly efficient, carbon-cutting design.
“We wanted to think outside of the box and help set the standard for what others can do,” he said.
We were standing beside the only visible part of the geothermal system: an array of small, dusty pipes peeking out from the partially finished floor of a forthcoming restaurant. In a nearby utility room, I saw control boxes managed by the company Endurant Energy, which monitors temperatures in the underground geothermal piles to determine whether it’s more efficient for the building to grab heat from the earth or run the heat pumps on the roof.
On days when the geothermal setup can produce more energy than needed, it pipes the excess heat directly into its sister property, a nearly century-old Art Deco edifice on 345 Hudson St. The developers recently renovated the older building and combined it with 555 Greenwich to make a single 1.2-million-square-foot office complex in lower Manhattan.
The newer property uses 40% less energy than typical top-quality office buildings and well exceeds New York City’s 2030 climate targets, according to its owners. The older property, which is still transitioning to an all-electric energy system, is on track to reduce its carbon emissions by 90% within the next decade.
Geothermal heating and cooling systems are steadily proliferating beneath the city’s newest buildings, despite the complex engineering challenges and expensive installation costs. Property owners are looking to not just comply with regulations but also to generate long-term energy savings by avoiding natural gas.
Buildings account for more than two-thirds of New York City’s greenhouse gas emissions. Since 2019, city leaders have adopted laws to rein in that planet-warming pollution.
Local Law 154 prohibits the use of fossil fuels in most new construction and will start applying to high-rise buildings in 2027. Local Law 97 requires most buildings over 25,000 square feet, whether new or old, to meet escalating energy-efficiency and emissions standards, with stricter limits set to take effect in 2030.
The city’s deadlines are approaching at a time when New York state is abandoning its most ambitious climate targets. In late May, Gov. Kathy Hochul, a Democrat, signed a budget bill that effectively vaporizes a 2030 mandate to curb statewide emissions by 40% from 1990 levels, replacing the target with a watered-down goal that critics fear will slow the state’s buildout of clean energy technologies.
The rollback at the state level is causing some doubt within the city’s real estate sector about whether the building-decarbonization timelines are really as firm as they seem, experts say.
“When there’s a lack of clarity, it makes it a challenge for building owners to pull the trigger” on efficiency and electrification projects, said Laura Bendayan, director of strategic partnerships at Entech. The NYC-based firm helps buildings optimize their existing boiler systems to reduce energy bills and lower emissions.
“We always recommend that [owners] be ahead of the game,” she added. “But there’s this sense of uncertainty that you can’t take away.”
Hudson Square Properties, for its part, says it’s pushing ahead with its no-fossil-fuels approach in both of its buildings.
During my visit, Alderman led me to the top of the newer building, showing me the controls for the radiant heating and cooling system, which circulates chilled or warm water through tubing beneath every floor. This technology provides a “baseline comfort level” and supplements the larger geothermal system, he said. Vents above our heads draw fresh outdoor air into the building, a step that helps lower the structure’s overall energy use by taking strain off the HVAC equipment.
From there, we walked through a heavy set of doors leading into the old building. The highest of 345 Hudson’s 17 floors is a cavernous empty room that originally housed massive printing presses, whose humming sounds and ink smells filled the neighborhood until the 1980s.
The developers are working floor by floor to phase out the existing gas-fueled heaters and boilers and replace them with a kind of thermal energy network. A labyrinth of pipes circulates water throughout the building; heat pumps can then tap into or reject heat from this system to keep occupants comfortable.
“You’re trying to reuse all of the energy that you’ve brought into the building, in the different places where it’s needed,” Alderman said. It’s the complete opposite of New York City’s district steam system, which gets rid of excess heat by piping clouds of vapor out onto the streets.
The 345 Hudson retrofit won a $5 million grant from the New York State Energy Research and Development Authority, as part of the Empire Building Challenge, which advances low-carbon retrofits in the state’s tallest buildings. The developers also raised more than $30 million in private funding for the project.
New York state’s retrenchment from ambitious climate policies might wind up undermining some of those efforts. As buildings shift toward using all-electric technologies, the level of emissions reductions they achieve will largely depend on how clean the electric grid is, said Kelly Dougherty, president of FirstService Energy, a New York–based firm that helps manage energy systems for residential buildings.
“If it’s rolled back any further, then we may have some issues,” Dougherty said about New York state’s landmark climate law. Still, “a lot of work has been done on reducing greenhouse gas emissions in the city,” she added. “I don’t think it’s going to go away.”
At the end of our tour, standing on an enviable rooftop patio, Alderman said he’ll be watching to see how the two buildings perform as they fill up with tenants and operate over time. As of now, his firm estimates that 555 Greenwich alone should save around $3 million over 15 years in avoided energy bills.
“I hope we can prove to ourselves and to others some of the long-term operating-cost savings — and that people will look to these as examples of what can be accomplished,” he said.
The Trump admin’s new rules block Americans from accessing rebates for electric heat pumps if they previously had oil, natural gas, or propane systems.
This article originally appeared on Inside Climate News, a nonprofit, nonpartisan news organization that covers climate, energy, and the environment. Sign up for their newsletter.
Federal energy efficiency rebate programs will no longer cover a switch from fossil fuels to electricity for heating, according to long-awaited guidance from the Department of Energy.
The department published an update on how it will implement consumer programs with $8.8 billion in funding. The new provisions include eliminating use of diversity, equity, and inclusion considerations, among other changes.
This follows legal challenges after President Donald Trump issued an executive order last year, upon returning to office, canceling the release of funds from President Joe Biden’s Inflation Reduction Act, including rebates for home energy efficiency. A coalition of states successfully sued to restore the funding, obtaining an injunction in March 2025.
States have been waiting for the Department of Energy to reopen funding, a process that begins with this latest publication.
Clean energy and environmental advocates said the guidance was overdue and severely flawed.
Tony Sirna, deputy policy director for Evergreen Action, said it’s “flatly illegal” to eliminate funding for electrification through an agency’s guidance rather than passing a new law. “This is a deliberate effort to deny relief to millions of families at the exact moment they need it the most,” he said in a statement.
The guidance, dated May 29 and announced in a news release on June 1, covers the $4.3 billion Home Owner Managing Energy Savings, or HOMES, program and the $4.5 billion High-Efficiency Electric Home Rebate, or HEEHR, program, with additional guidance for Indian tribes participating in HEEHR.
The HOMES program provides up to $8,000 for households to make energy-efficient upgrades, including insulation, air sealing, heating and cooling equipment, water heaters, duct sealing, appliances, and lighting, according to the Department of Energy. The upgrades must reduce energy use by at least 20 percent to be eligible.
The HEEHR program provides up to $14,000 in rebates per household, which retailers and contractors can offer at the point of sale, and can be used for qualifying efficient electric equipment and appliances.
Congress and the Biden administration designed the programs to ensure that low-income and other disadvantaged households received a significant share of the benefits. The new guidance is changing this focus, citing the Trump administration’s opposition to considering diversity, equity, and inclusion in federal spending and the elimination of Biden’s Justice40 environmental justice initiative.
The guidance also eliminates the programs’ support for shifting from oil, gas, or other fossil fuels to electricity for home heating. Now, households can only get funding for heat pumps for new construction or if they already have electric heat, as opposed to the previous rules that encouraged people to switch away from fossil fuels.
Another change is that the Department of Energy now requires households to upgrade their insulation and air sealing before using rebates for new appliances.
Reaction was mostly negative from groups that push for improvements in energy efficiency.
“It’s a very standard playbook to incentivize fossil fuel companies and provide a lifeline to them,” said Srinidhi Sampath Kumar, director of the Sierra Club’s clean heat campaign, about the limits on fuel switching. “It’s absolutely been done in bad faith.”
Mark Kresowik, senior policy director for the American Council for an Energy-Efficient Economy, said in a statement that the programs “will help families make energy-saving improvements that lower their utility bills,” but he lamented the new limits on the programs.
The guidance is “a fundamental departure” from the intent of the programs, said Sam Friesen, managing director for buildings at Fresh Energy, a Minnesota-based environmental advocacy group. He added that the changes will muddy the waters for consumers who were making plans under the old rules and now need to follow the new ones.
Robin Yochum, buildings program director for the Southwest Energy Efficiency Project, a regional nonprofit based in Colorado, said she is pleased to see this step to implement the programs but is concerned about limits on fuel shifting.
“While there are certainly many electrically heated homes that deserve efficiency upgrades, helping households transition from propane, fuel oil, and natural gas to highly efficient electric technologies was one of the most transformative aspects of the original program design,” she said in an email.
Asked for a response, a Department of Energy spokesperson had this comment: “The Department of Energy has released common-sense revisions to program guidance to align requirements more closely with statutory requirements, advance affordability, ensure good stewardship of taxpayer dollars, and empower grantees to tailor their programs to local contexts and residents’ needs.”
State programs administer the money but the federal government must approve the state plans before the funds are released. Most states plus the District of Columbia have had at least some of their plans approved, as shown in a May 18 update from Atlas Public Policy.
Some already paid rebates based on the initial rules under the Biden administration. Those states now have three months to modify their programs to comply with the new guidance going forward.
South Dakota has declined to participate, and Idaho’s legislature has taken action to stop participating.
Consumers can contact their state energy offices to get more information about program availability.
The region is finalizing its first-in-the-nation rule to limit the sale of polluting gas water heaters, which will take effect next year.
In 2023, the San Francisco Bay Area’s air district passed first-in-the-nation rules setting zero-emissions limits on home heating systems and water heaters. Now, the agency is working to address affordability concerns ahead of the water-heater rule’s finalization this year — and defuse calls from some regulators to scrap the policy altogether.
In their current form, the regulations would effectively prohibit the sale of gas appliances, beginning with water heaters in 2027 and then furnaces in 2029. Gas appliances spew noxious compounds, including nitrogen oxides (NOx) that contribute to the region’s smog. Pollution from furnaces and water heaters leads to as many as 85 early deaths in the community each year, the air district estimates. Those deaths, combined with illnesses and hospital visits, take a financial toll of up to $890 million annually.
But clean alternatives — zero-emissions heat pumps and heat-pump water heaters — are typically more expensive up front, even if they can save thousands of dollars on energy bills over time. From the beginning, Bay Area regulators, the majority of whom are elected city and county officials, vowed to institute the groundbreaking requirements with care.
The air district is now hammering out the details for implementing the water-heater rule, including a plan to offer one-time exemptions to low-income households and those with space and electrical constraints. Staff members, who are separate from the voting board and developed the proposal, estimate that the exemptions could apply to 38% of water-heater installations. They’ve also proposed delaying implementation by nine months, from January 2027 to October 2027, to set up the exemption system.
Several members of the agency’s board are seeking more drastic changes.
Eight of the 18 board directors in attendance at the body’s May 13 meeting expressed a desire to further delay the policy’s implementation date — or roll it back and make adoption of electric equipment voluntary instead. The board has a total of 24 directors.
“I just think it’s the wrong time to do this. … What’s the top-of-mind issue right now? It’s affordability,” said Alameda County Supervisor David Haubert, a board member in favor of loosening the rules. “It’s affordability of food, it’s affordability of electricity, it’s affordability of gas.”
Bay Area regulators have tightened NOx-emissions standards for water and space heaters for over 30 years. The municipalities of Berkeley, Emeryville, Los Altos Hills, Oakland, and San Francisco have passed local resolutions in favor of the latest appliance rules.
A majority of the board voiced their continued support for the water-heater standard, given gas-fired equipment’s insidious threats to public health.
“When we talk about affordability, let’s talk about the affordability of asthma,” said chair Lynda Hopkins, supervisor of Sonoma County, who supports the standards with the exemptions.
“Let’s talk about the affordability of premature death and heart disease, missed work, missed sports practices, missed school … [which also has] social and emotional costs,” she noted. “We have communities who are essentially living with generational trauma because they experience disproportionate health impacts.”
The board is expected to vote on the finalized rule language this October.
Its decision could inform state-level regulations taking shape in California and Maryland. Both are actively considering clean-heater rules, while eight other states have committed to exploring zero-emissions standards in the future: Connecticut, Hawaii, Massachusetts, New York, Oregon, Pennsylvania, Rhode Island, and Washington. Last year, after a flood of opposition speculated to be fake, Southern California’s air district decided to hold off on adopting similar zero-emissions appliance rules of its own.
“The Bay Area will set an example for other air districts,” said Joseph Wachunas, senior project manager at decarbonization nonprofit New Buildings Institute.
According to the district’s analysis, heat-pump water heater installation costs $7,000 on average, or twice as much as putting in gas equipment. Local and state incentives are available to help close the $3,500 gap — or, in some cases, install zero-emissions water heaters for free.
For a substantial minority of households, switching to a heat-pump water heater could still be cost-prohibitive for myriad reasons. These appliances are typically larger than gas options and may not fit in tight spaces. Because heat-pump devices harvest thermal energy from the air, they typically need at least 700 cubic feet, which not all properties are ready to accommodate. And while evidence suggests that most households can electrify on 100 amps, a fraction might need an electrical service upgrade that could add $2,000 to $30,000 to the installation cost.
When these circumstances make heat-pump water heaters unaffordable, the air district’s staff members have proposed making exceptions.
“If you have to move a wall, you’re going to be able to get that exemption. If you have to upgrade your panel, you’re going to get that exemption,” said Greg Nudd, deputy executive officer of policy at the district. After installing a gas water heater, “you would have the lifetime of that piece of equipment to address those problems.”
The tech is also becoming more accessible. “When we started this process several years ago, there were no 120-volt heat-pump water heaters,” said board director John Gioia, supervisor of Contra Costa County. “There are now two on the market” that plug into standard outlets.
Clean air advocates called the exemption approach reasonable.
“The Bay Area Air District has done a good job at addressing the real-world concerns that people have brought up,” said Tony Sirna, deputy policy director for buildings at climate advocacy group Evergreen Action. “We want to reduce pollution, but we know that that’s not going to be successful if the rule doesn’t work for the people of the Bay Area.”
More than 60% of homes in the region will still be required to adhere to the standard, “which will drastically reduce pollution and put us on track to transitioning to clean air and clean energy,” Sirna said.
Even though some regulators would suspend the appliance rules outright, Sirna said he’s confident that the majority will carry the water-heater standard across the finish line this fall. “The flexibility exemptions that are being proposed,” he noted, “really address all the concerns that were being raised.”
Policies to transition buildings off polluting fossil gas are holding up in federal courts across the U.S. That’s a big win for local governments looking to spur electrification, given that these types of regulations suffered a major setback just a few years ago.
In 2023, the 9th U.S. Circuit Court of Appeals struck down Berkeley, California’s pioneering ban on gas hookups in new buildings. A panel of three federal judges sided with the California Restaurant Association in its assertion that the ordinance conflicted with the federal Energy Policy and Conservation Act, a 1975 law that prevents cities and states from setting appliance efficiency standards that differ from those of the U.S. government.
Even at the time, the decision was controversial. Eleven other 9th Circuit judges signed on to a dissenting opinion — an unusual move — to inoculate judges of future suits against, in their view, the case’s flawed reasoning.
Indeed, building developers, appliance manufacturers, and others pushing for fossil fuels — including the Trump administration — have since used the same legal argument in 13 other lawsuits against cities, counties, states, and an air district. These cases — in California, Colorado, Illinois, Maryland, New Jersey, New York, Washington state, and Washington, D.C. — challenge local rules that require all-electric new buildings, mandate existing structures to taper energy consumption or emissions over time, or set zero-emissions appliance standards in an effort to reduce air pollution.
“Industry has really gone on a spree,” said Daniel Carpenter-Gold, senior staff attorney for climate justice at the Public Health Law Center, a nonprofit affiliate of the Mitchell Hamline School of Law in St. Paul, Minnesota. Most of the suits, he noted, are being argued by one of two law firms: Reichman Jorgensen Lehman & Feldberg, which spearheaded the Berkeley case, or Baker Botts. “A lot of the language is verbatim from one case to the next.”
In all six post-Berkeley cases for which federal judges have weighed the EPCA argument, they’ve rejected it and upheld pro-electrification standards.
“There is a clear consensus among the courts that have ruled on the issue that the 9th Circuit’s decision in [Califo
Last month, U.S. district court judges handed down victories to local jurisdictions in three cases — two in Maryland and one in Washington, D.C.
The rulings “have sent a clear message: states and local governments can be confident to move forward with the range of decarbonization and electrification programs,” Tim Oberleiton, senior attorney for the nonprofit environmental law group Earthjustice, said in a statement.
These policies are crucial to curb carbon pollution from buildings, which accounts for about one-third of U.S. emissions, especially as the Trump administration works to prop up fossil fuels. Efficient electric appliances also improve local air quality, can provide greater comfort, and typically lower energy bills.
In the Berkeley case, the legal question centered on whether the city, by prohibiting gas infrastructure, can essentially dial down gas appliances’ energy use to zero, or whether that power rests with the federal government, because it sets appliance efficiency standards.
After the three-judge panel decided the latter, Judge Michelle Friedland argued in the dissenting opinion that the U.S. government’s authority to set energy conservation standards doesn’t preempt states from choosing the type of energy, and thus appliances, they use.
“EPCA’s preemption provision guarantees uniform appliance efficiency standards. It does not create a consumer right to use any covered appliance,” she wrote.
Federal judges continue to poke holes in the notion that EPCA precludes pro-electrification policies.
Judge Paula Xinis of the District of Maryland in National Association of Home Builders v. Montgomery County, which challenges an electric buildings law, pointed out that EPCA’s requirement that appliances be tested for their energy use prior to sale would be impossible if “energy use” were interpreted the way plaintiffs claimed: at the site of installation.
Judge Percy Anderson of the Central District of California in Rinnai America Corp. v. South Coast Air Quality Management District, a case against regulators’ zero-emissions standards for water heaters, wrote that “there is no reason to believe that Congress ever intended or even contemplated that the EPCA would preempt emission regulations designed to combat air pollution.”
And Judge Ana Reyes of the District of Columbia in National Association of Home Builders v. District of Columbia took a gastronomical approach to demonstrate EPCA’s narrow scope.
“Consider a hypothetical federal law that defines the point of use as restaurants, sets a national tortilla chips-to-salsa ratio of 2 grams for every 3 grams, and preempts states from regulating that ratio,” she wrote in her decision. “No one would say that because Congress set a chips-to-salsa ratio, it intended to ensure that every restaurant has a right to sell chips and salsa. And a state regulation prohibiting French restaurants from serving chips and salsa would not be preempted because it would operate in an entirely different regulatory space, preserving French cuisine — one that happens also to affect chips and salsa availability.”
In other words, because EPCA was only ever meant to ensure appliances adhered to the same energy-efficiency standards (akin to chips-and-salsa ratios) across states, it can’t nullify local climate and air-quality laws that may limit the use of those appliances.
Industry opponents paint local electrification policies as anti-consumer choice. But these are public health regulations meant to protect homebuyers and renters from appliance decisions often made by builders and landlords, according to Carpenter-Gold.
“These governments are just trying to help people live healthier lives,” he said.
Five of six cases ruled on their merits have now been appealed to the higher circuit courts, along with a case in Washington state that was dismissed on grounds unrelated to how EPCA is interpreted. One suit brought by the Trump administration’s Department of Justice was voluntarily dropped after the two small California towns it concerned amended their building standards to nix electrification requirements. Five remaining cases are still pending in the district courts.
The Supreme Court, which hears few cases in general, is unlikely to take up any of the EPCA-based lawsuits, according to Carpenter-Gold. He doubts that the justices will consider it worth their time, given the consensus in the district courts, he added.
“The weight of authority is clearly on one side.”
In January, Lerned Zint’s gas water heater croaked.
It would have been an inconvenience for anyone. For Zint, a Spanish-speaking mother who runs Corazones Daycare out of her San Francisco home, it was an emergency.
Zint takes care of about 10 children, 6 months to 4 years old. Their sticky fingers and stinky messes make hot water essential.
Thankfully, Zint didn’t have to wait long for a solution. Within days, the San Francisco Environment Department worked with a partner contractor to install a shiny new water heater in her home at no cost — and it runs on an electric heat pump, not gas.
Zint is the first participant in the city’s new electrification pilot program for child care centers run out of residential homes. Led by the Environment Department and funded by a TECH Clean California Quick Start Grant, the $300,000 program will swap gas water heaters for heat-pump options at up to 30 facilities. The initiative could be a model for other communities around the country looking to decarbonize their buildings and thereby give their children access to cleaner, safer air.
Electric upgrades can’t come soon enough to the disadvantaged communities the new initiative is prioritizing.
Zint lives in the Excelsior neighborhood, which not only has the highest number of children up to 5 years old in the city but also carries “a disproportionate share of environmental burdens from high pollution,” Supervisor Chyanne Chen, who represents the neighborhood, said during a March press event. This initiative improves indoor air quality, reduces emissions, lowers energy costs, and modernizes child care facilities, she noted. That “means healthier providers, healthier children, and a healthier neighborhood.”
By their nature, appliances that burn material — fossil fuels, charcoal, wood — spew toxic compounds that chronically harm health. The pollutants, from oxides of nitrogen to carbon monoxide, can damage nerves, increase asthma symptoms, heighten the risk of stroke and dementia — and even kill.
For children, whose lungs and immune systems are still developing, the health impacts of gas-appliance pollution are particularly grave. Gas stoves, which often aren’t required to vent outside, are the biggest threat: They can increase any person’s chances of getting cancer, but the risk for kids is nearly double that for adults. Water heaters, furnaces, and dryers fueled by gas pose risks, too.
Low Income Investment Fund, a national community-development financial organization that is helping the Environment Department implement the program, has recently become acutely aware of how ubiquitous these dangers are. “Most of these child care programs, they’re running their stoves more than half of the day, because they cook for the children,” Katherine Perez, a LIIF program officer who is aiding Zint with electrification, told Canary Media.
To date, the Environment Department has installed five heat-pump water heaters under the program and aims to complete all 30 by the end of the year.
After that, LIIF will incorporate learnings from the pilot to update its existing Child Care Facilities Fund, which can go toward renovations and repairs. The grant program awards up to $100,000 per home child care business, with the requirement of a 20% copay. This funding has come to the aid of providers when their appliances break down, and historically has been used to replace gas equipment with gas equipment.
But the nonprofit has started to encourage participants to replace their broken appliances with electric options across the board.
“We haven’t formalized our policies in regards to electric appliances for homes,” said Kimberly Thai, a LIIF program manager. “But it is our practice to fund appliances that improve indoor air quality.”
About 500 child care programs across San Francisco are eligible for LIIF’s facilities grants.
As part of the electrification pilot, the Environment Department is also providing training to the local workforce. Up to 10 San Francisco contractors will gain experience installing heat-pump water heaters in child care facilities, which require more creative scheduling than typical homes, according to Benny Zank, the department’s building decarbonization coordinator and the lead for the pilot. Those skills will equip them to serve many more homes in the future.
San Francisco will need electrification-savvy contractors to fulfill its public health and climate ambitions. Bay Area air quality regulators are finalizing the details on landmark rules that will phase out the sale of new residential gas water heaters starting in 2027 and gas furnaces in 2029.
In just 14 years, the city plans to achieve net-zero-emissions. As of 2022, buildings still accounted for nearly half of its climate pollution.
For her part, Zint is thrilled with her heat-pump water heater and plans to fully electrify her home, she said, as Zank translated. LIIF is assisting her with that transition, which entails replacing a gas-fired furnace, stove, and clothes dryer, in the coming weeks, Perez said.
The appliances create a safer environment for the children, Zint noted. “Especially, they reduce the risk of carbon monoxide poisoning, which is really important when taking care of kids.”
Word of Zint’s electrifying update is spreading. “A bunch of other child care providers have reached out to me,” she said, asking about how they can ditch gas appliances, too.
“We make sure to share all this information with each other,” she added. “We’re a real community who all care about the health and safety of the kids that we take care of.”
Blake Herrschaft has plans to fully electrify his Tahoe City, California, home, which runs on a slim 100 amps of electrical service. But even with a hot tub, in an area that sees an average of 15 feet of snow per year and temperatures that dip into the single digits, his house won’t need an expensive service upgrade. “I’ve done the calculations,” he said.
An architectural engineer, Herrschaft manages building electrification programs at Peninsula Clean Energy, a public power agency — also known as a community choice aggregator — in the San Francisco Bay Area. He says he frequently hears people claim at regulatory meetings that electrification rules will force households to undergo electrical service upgrades that many can’t afford; these upgrades can range from $2,000 to $30,000 in the Golden State, according to a 2022 analysis.
But now, Herrschaft and his colleagues have firsthand evidence from a handful of residences scattered across PCE’s territory that homes can be electrified without upsizing their electrical service. Often, 100 amps are more than enough.
In 2024, PCE ran a nine-home electrification pilot for low-income customers in San Mateo County, California, which included five households with 100-amp panels. At no cost to recipients, the agency replaced their fossil-gas and propane appliances with efficient electric ones, using the power the homes already had. Plus, PCE didn’t need to install specialized equipment, such as smart panels, to manage the flow of electricity. After the retrofits, most households saw significant savings on their monthly energy bills.
The results of the pilot program, published in January, demonstrate that home electrification can deliver climate, health, and financial benefits without massive infrastructure costs.
“When you’re working with limited funds, being able to electrify without a panel upgrade is great,” said Cavan Merski, senior data analyst at Pecan Street, a nonprofit research organization that was not involved in PCE’s analysis. It’s “awesome to … see a case study of this working in the wild.”
The findings are especially relevant now as air-quality regulators for the Bay Area, home to more than 7 million, negotiate the details of groundbreaking rules to phase out the sale of gas water heaters and fast-track the switch to heat-pump versions. Over the coming months, officials will weigh final drafts of the regulations and could vote on them as early as October. The rules will take effect next year.
“There’s rampant disinformation going on ahead of the air district rules,” said Pamela Leonard, deputy director of marketing and communications at Silicon Valley Clean Energy, a community choice aggregator in Santa Clara County, California, that partnered with PCE on the pilot. “So we’re really trying to get the word out … In most cases, homes can go all-electric on 100 amps.”
The case study builds on prior evidence that households typically have plenty of play in their existing power supply. In early 2024, PCE found that across more than 700 all-electric single-family homes it analyzed in its service territory, 99 percent of them never drew more than 100 amps of electric current all year. The most common peak demand was 29 amps, less than a third of a home’s capacity.
Still, the pilot’s results come from a small sample size in one county in a temperate region. They may not apply in more extreme climates, according to Scott Hinson, chief technology officer at Pecan Street. Whether a home will typically need electrical upgrades before switching to all-electric appliances and vehicles “is going to be regionally dependent,” he noted.
Households in moderate climes can more easily swap in heat pumps without needing to grapple with weatherization or electrical service upgrades to lower their homes’ energy demands. But even in areas with less hospitable temperatures, the shift is still possible, as demonstrated by the retrofits of a few 100-amp homes in Calgary, Canada.
As Rahul Young, head of community engagement for the electrification advocacy nonprofit Rewiring America, noted of PCE’s pilot, “There will be real value in having … this study replicated in other parts of the country.”
Herrschaft has heard some electrification opponents peg the cost of fully electrifying homes in the $100,000 range, but PCE’s contractor was able to replace fossil fuel–fired furnaces, water heaters, stoves, and clothes dryers with, as needed, heat pumps, heat-pump water heaters, induction stoves, and electric dryers at an average cost to PCE of $35,000 per residence. Like-for-like replacements would have been about $25,000, according to Herrschaft. (Electric-vehicle chargers, which can be part of all-electric homes, were outside the scope of the pilot.)
PCE was able to analyze six households for bill savings; ditching gas cut their energy bills by 20 percent on average. Five saved an estimated $24 to $1,068 per year. The bills for one home rose slightly, but its owners would have seen savings had they chosen a beneficial rate from Pacific Gas & Electric, according to Herrschaft.
Another important takeaway from the pilot: If the retrofitted homes, which were spread across the county, had been in the same neighborhood, their greater electrical demand would not have hurt the grid. Even if they were receiving power from the same distribution transformer, their cumulative increased load would have been “mild” — the equivalent of adding about two hair dryers on full blast, Herrschaft said.
“Home electrification — the home appliances in particular — just isn’t an issue when it comes to the grid in California and nearly every other state,” he said, given their shared climate zones. “I feel confident about that from the [electrical] panel all the way to the transmission line.”
In addition to misconceptions around household electrical capacity, Herrschaft hopes to address the separate issue of how contractors determine how much power a home needs.
To decide the necessary amps, installers do calculations written in the National Electrical Code, which sets safety standards. However, many professionals use methods that overestimate a home’s peak electrical load, Herrschaft said. A major focus for PCE this year will be educating them on other approaches, which are much less likely to trigger an unnecessary service upgrade.
Since finishing the pilot, both PCE and Silicon Valley Clean Energy have launched programs to electrify hundreds of homes in their service territories in the next two years, at no cost for low-income households. PCE has done dozens of home retrofits, and 95% haven’t required service upgrades, Herrschaft noted.
“We found it’s easy to electrify on 100 amps.”
Silicon Valley–based startup Lunar Energy has spent the last six years building a business for its smart home batteries and the virtual power plant software that can orchestrate those systems to support the grid at large. Now, it has a massive new pot of cash to expand that effort, as utilities and state policymakers look to leverage such technologies to help meet soaring power demand.
On Wednesday, Lunar Energy unveiled $232 million in new funding. The investment is made up of a $102 million Series D round led by B Capital and Prelude Ventures, which closed in recent months, and a previously unannounced Series C financing of $130 million led by Activate Capital in 2024.
Added to the $300 million round Lunar Energy raised in 2022 from investors including U.S. residential solar leader Sunrun and South Korean battery giant SK Group, that brings the total investment to just over half a billion dollars. Lunar Energy CEO Kunal Girotra, who previously led Tesla’s residential energy business, declined to share the startup’s revenues or expectations for profitability. But he did say, “This capital helps us, in a big way, in achieving our goals of not having to raise ever again.”
Much of the new money will go toward expanding Lunar Energy’s manufacturing capacity for its home battery and energy-control hardware, he said. The company produces its equipment in California, Georgia, and Washington state and has installed it in about 2,000 homes and businesses in California. The firm plans to increase its manufacturing capacity from about 10,000 battery systems per year today to 20,000 per year by the end of 2026 and to 100,000 per year by the end of 2028, Girotra said.
Home batteries are a competitive market, with Enphase, FranklinWH, Generac, LG, SolarEdge, Sonnen, market leader Tesla, and other companies all vying for customers. Lunar Energy’s systems are priced on the higher end of the spectrum, with typical installation costs coming in at about a 10% premium to Tesla’s Powerwall batteries, Girotra said.
But Lunar Energy’s system comes with a bunch of integrated hardware that differentiates it from many other home batteries, Girotra said. It includes modular batteries that can provide 15 kilowatt-hours to 30 kilowatt-hours of storage, allowing consumers to build a system that is rightsized for their homes. Lunar Energy also incorporates inverters and optimizers to efficiently convert power from rooftop solar panels into stored electricity. And its digitally controllable circuit breakers mean that homeowners can use a smartphone app to control which household circuits solar and battery power flow to; this can be useful for emergency backup or to save on utility bills on a daily basis.
“With the other companies, you have to add other components to them to get an apples-to-apples comparison,” Girotra said. “And we’ll be closing the [price] gap with Tesla very soon.”
Then there’s Lunar Energy’s virtual power plant software, which allows the company to control home batteries, EV chargers, and other power-using appliances. The VPP technology essentially lets these distributed energy resources act in tandem to function like a traditional power plant.
The company first began its foray into VPPs in 2022, when it acquired the U.K.-based startup Moixa, which managed batteries, smart thermostats, and other controllable devices in Japan and the U.K. That software now controls close to 150,000 devices in homes, including those of Sunrun customers participating in VPP programs in California, Hawaii, New England, and Puerto Rico, Girotra said.
Lunar Energy plans to also expand its VPP services this year, Girotra said, partnering with several of California’s community choice aggregators and retail electricity providers working in competitive markets. By year’s end, the company expects to have customers in several more states, such as Texas, which has become a major target for VPPs from major energy retailers, smart-thermostat providers, solar-battery installers, and manufacturers of stand-alone backup batteries.
Clean energy advocates and experts expect that VPPs are the path to making rooftop solar and battery systems successful in the Trump era, as rooftop solar alone becomes an increasingly tough proposition in many markets.
The megalaw passed by Republicans in Congress last year ended decades-old tax credits for homeowners installing clean energy systems, tamping down growth expectations for the rooftop solar industry, although third-party installers can still use tax credits for some time. Meanwhile, California’s 2023 cuts to rooftop solar incentives have led to a steep drop-off in installations in the country’s leading market.
But pairing solar with batteries boosts homeowners’ energy bill savings — a significant motivator for consumers as utility rates spike across much of the country, including in California.
Many states are looking to use VPPs to avoid investing in costly traditional power plants to meet skyrocketing power demand — a surge driven by data centers, factories, and the rapid electrification of buildings and vehicles. VPPs provided hundreds of megawatts of grid relief last summer in California, Puerto Rico, and New England, and states including Colorado, Illinois, Maryland, Minnesota, North Carolina, Utah, and Virginia have passed laws or are pursuing regulatory action to expand their use.
Lunar Energy isn’t the only company raising money on the prospects of VPPs. Texas-based startup Base Power raised $1 billion last year to ramp up manufacturing capacity for batteries it installs at low or no cost in homes and businesses. The company then leverages these systems into a VPP that it can use to earn a profit in the Lone Star State’s competitive energy markets.
And San Francisco–based startup Span — which makes smart electrical panels that let homeowners, businesses, and utilities digitally control power flows between solar installations, batteries, EV chargers, and other building loads — is in the midst of raising a $176 million investment round.
Data from the subset of Lunar Energy systems in VPPs under its own control shows that customers earn an average of $464 per year by participating in those programs. That’s on top of the $338 that Lunar Energy customers save on average each year by fine-tuning their home energy systems to consume grid power when it’s at its cheapest and most plentiful.
“We see behind-the-meter storage with software as a key element for solving the power-demand problem,” Girotra said. “If you give people more of these devices and you let them control them, you suddenly have a grid that doesn’t have to build the 5x — or 5,000x — capacity that we’re asking for in a short amount of time.”
American factories use lots of hot water and steam to produce everyday goods like milk, cereal, beer, toilet paper, and bleach. Most facilities burn fossil fuels to get that heat, emitting huge amounts of planet-warming pollution in the process.
Switching to electricity could significantly and immediately slash those emissions in many places, according to a new report by The 2035 Initiative at the University of California, Santa Barbara. Electric versions of industrial boilers, ovens, and dryers are already available, and newer models promise to boost factories’ efficiency and curb energy costs even further.
“We can make progress today with the technologies we have,” said Leah Stokes, an associate professor of environmental politics at UC Santa Barbara and one of the principal researchers for the report.
But electrifying factories is a far more complex undertaking than, say, trading a gasoline-fueled car for a battery-powered vehicle. The process involves making many head-scratching calculations and engineering choices, which is partly why companies have been slow to adopt electrified equipment. Stokes said the report aims to demystify some of those decisions so that U.S. manufacturers can start tackling their heat-related emissions.
“We wanted to answer this question [of] where is it most technologically and economically feasible to electrify industrial process heat today?” she said during a Dec. 16 webinar. The study also drives home the need to rapidly build more clean energy to power all that new demand.
Researchers simulated what it would look like to electrify nearly 800 large industrial plants within three sectors: food and beverage, chemicals, and pulp and paper manufacturing. These facilities use relatively low- and medium-temperature process heat — unlike scorching cement kilns or steel mills — and together account for about 40% of CO2 emissions from the U.S. industrial sector.
The UC Santa Barbara team modeled four scenarios for electrifying each of these plants, beginning with “drop-in electrification” — using electrode boilers and electric ovens and dryers — and progressively expanding efforts to include major energy-efficiency upgrades and advanced technologies, like high-temperature heat pumps from the startups AtmosZero and Skyven.
At the most ambitious level, electrifying these factories could slash the country’s emissions by 1.3 billion metric tons of CO2 equivalent by 2050, while also providing $475 billion in public health benefits by improving air quality, researchers found. The figures assume the U.S. electric grid will be running almost entirely on clean energy by mid-century, up from 40% today.
“This one space actually can contribute an outsize share of the global [climate] mitigation we need to keep our global temperature rise in check,” said Eric Masanet, a sustainability science professor at UC Santa Barbara who led the study with Stokes.
In certain cases, it can cost manufacturers about the same amount of money to get heat from electric systems rather than gas-fired ones, he said. That includes processes that use less intensive heat, like ethanol and plastics production, since heat pumps work more efficiently at lower temperatures. It’s also true for factories located in places where fossil gas is relatively expensive. In Delaware, New York, and Washington state, for example, companies enjoy a more favorable “spark gap” — the difference between electricity and gas utility costs for the same unit of energy delivered.
Just as cost varies by facility, so does the potential for emissions reductions. The largest CO2 savings are in states with low-carbon grids, like Washington, California, and Vermont. In places with dirtier grids, switching to electricity can actually increase emissions in the near term if utilities meet that demand with gas- and coal-fired power plants. But even in those areas, researchers expect that electric equipment installed today will still cut pollution over time as the grid gets cleaner.
For that to happen, factories will need a lot more wind, solar, geothermal, and other carbon-free sources to come online. Electrifying the processes included in the study could require 158 to 301 terawatt-hours of additional power, or about 16% to 30% of the electricity currently consumed by industry. That new load would add to the soaring demand that’s already coming from data centers and electrified homes and vehicles.
“If we want to bring the type of electricity to the industrial sector that it’s going to need … we’re going to need to improve the grid,” Sen. Sheldon Whitehouse (D-R.I.) said during the webinar, adding that streamlining the federal permitting process would hasten the build-out of new transmission and clean energy projects.
The UC Santa Barbara team outlined other policies that could accelerate industrial decarbonization, particularly for the facilities where electrification is more expensive than burning fossil fuels. A 30% federal investment tax credit or state-level grants would offset the up-front costs of investment in new equipment. A “clean heat” production tax credit would lower operating costs, as would reducing industrial electricity rates.
Stokes noted that, even without such incentives, cleaning up manufacturing would take a minimal toll on consumers’ wallets. Take breweries, which use heat for mashing, boiling, and fermenting ingredients and sterilizing containers. “Our modeling shows that even if electrification doubles the cost of energy as an input to beer production, it’s 1 cent per beer,” she said.
“This is something that we can do, and it’s super important,” she added.
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