Electrification is the label for transforming petroleum-based machines (cars, heating systems, stovetops, etc.) into electricity-powered machines. The idea is that as electricity is made with carbon-free sources, these machines run clean compared to petroleum-based energy sources.
Electrification can be a twofer – If a petroleum-based machine is replaced with clean power, that is a win. If an older electric powered machine is replaced with a more efficient electric-powered machines, that makes power go further.
There’s a hitch in this elegant concept, though. The Energy Institute at Haas at the University of California says in Evidence of a Homeowner-Renter Gap for Electric Appliances, calls it the landlord-tenant problem. “Simply put, landlords have too little incentive to invest in energy-efficiency when their tenants pay the energy bills.”
There’s a name for this situation, too. “The split-incentive problem … neither landlords nor tenants have sufficient incentive to invest the time, money and effort needed to make efficiency improvements.” (Source)
Landlords prefer electric appliances, though. “Electric resistance heating is cheaper to install than a natural gas furnace. Similarly, electric stoves and electric dryers tend to be cheaper to buy and easier to install than natural gas.” (Source) Also, if tenants, not landlords, pay the electric cost there is less reason to spend more money for more efficient appliances.
Technical issues complicate electrification in residences, whether homeowner or rentals. Greenbiz magazine, says “Many older homes, for example, are insufficiently wired to handle additional, higher power (think amps and volts) mechanical systems. Even switching from a gas water heater to an electric one can trip the need for expanded electrical panels for homeowners…. In other cases, the costs of purchasing electric appliances such as heat pump space heaters and the wiring and venting changes needed to install them lead to more extended remodeling than initially anticipated.”
Haas says renters typically use more power than homeowners. “But over the last decade the U.S. grid has become much cleaner. Emissions from U.S. power plants are down 45% since 2010, and last year U.S. electricity generation from coal fell to its lowest level in decades. The rental housing stock relies relatively more on electricity, so its environmental impact has fallen relative to owner-occupied homes.”
There can be reasons for landlords to invest. “Certain upgrades can allow you to charge a higher monthly rent for your property. For example, replacing older appliances with newer energy efficient stainless-steel versions will not only help with the utility bills, but it will make the rental unit look nicer, and thus increase the value. [Also] When you replace older items at your property with newer versions, you will often reduce the number of maintenance calls you have to make to the property.” (Source)
The Homeowner-Renter Gap illustrates that energy efficiency has many dimensions. There is no one-size fits all for energy policy.