TO: TRANSPORTATION AND FROM: Lori Mitchell
ENVIRONMENT COMMITTEE
SUBJECT: SAN JOSE CLEAN ENERGY DATE: 2/12/24
PROGRAMS ROADMAP UPDATE
Approved Date 2/26/24
RECOMMENDATION
Accept this update on San José Clean Energy’s Programs Roadmap and recommend this item for full Council consideration at the April 9, 2024, City Council meeting.
SUMMARY AND OUTCOME
SJCE’s customer programs help San José move closer towards its Carbon Neutral by 2030 goal and improve energy affordability. The Department recommends allocating additional funding to customer programs while continuing to build SJCE’s reserves prudently. Staff recommends allocating a maximum of $6.5 million of rate payer funds across the remainder of Fiscal Year (FY) 2023-2024 and FY 2024-2025 and leveraging approximately $5.5 million in additional external funding sources for customer programs. Estimated spending levels in the current year of $4.2 million would be deployed from existing appropriations, and estimated spending of $7.8 million would be subject to the 2024-2025 Proposed Budget development process. SJCE will increase its offerings for residential and commercial customers from 12 to 19 programs (Figures 1 and 2). The programs will incentivize transportation and building electrification, energy efficiency, and the adoption of distributed energy resources; improve resiliency; and lower electricity bills for vulnerable customers. Collectively, implementing the programs through FY 2024-2025 is anticipated to result in over $18.5 million lifetime customer savings and 44,000 metric tons of CO2 reductions, and 56% of program incentive funds will be distributed to priority communities.
1 1 Staff’s recommended definition of priority communities includes households <80% area median income, disadvantaged communities as defined by CalEnviroScreen, and Justice40 communities, with different screening tools utilized for each program depending on the clean energy technology and issue the program is trying to solve.
COUNCIL AGENDA: 03/04/24
ITEM: (d) 2
TRANSPORTATION & ENVIRONMENT COMMITTEE
February 12, 2024
Subject: San José Clean Energy Programs Roadmap Update
BACKGROUND
One of the key advantages of California Community Choice Aggregators is the ability to reinvest in the community through programs and rate discounts while providing electric service with a greater awareness of community needs than the large investor-owned utilities. Having established $196 million in operating reserves, SJCE has made progress toward its goal of building reserves equal to 180 days of operating expenses to help withstand sudden market or regulatory changes.2 As reserve levels are nearing the 180-day mark, staff recommends modestly reinvesting more funding into customer programs while continuing to build reserves pursuant to the SJCE Financial Reserves Policy.
3 SJCE’s Programs Roadmap, which the City Council
accepted on March 9, 2021, offers a vision of the types of customer programs SJCE will evaluate and choose over the next several years (Attachment A). SJCE programs fall under six areas:
1. Vehicle Electrification: Programs focused on accelerating the conversion of all vehicle types into an electrified version.
2. Building Electrification: Programs supporting converting homes and buildings from gas and electricity-powered to solely electricity-powered.
3. Distributed Energy Resources: Programs that include resources on the customer side of the utility meter, such as solar, battery storage, and demand response.
4. Energy Efficiency: Programs that reduce energy usage and costs through equipment upgrades or building envelope improvements.
5. Program-Specific Rates: Programs designed to offer special rates to select customer groups to incentivize energy-use behavior or support those customer groups.
6. Resiliency: Programs to provide backup power or to maintain power during an outage or other electric service disruption, often relying on distributed energy resources on the customer side of the utility meter.
There is alignment between these program areas and the four strategies identified by the City’s Framework for Carbon Neutrality and adopted by the City Council in June 2022: a) Move to zero emission vehicles, b) Reduce the miles we travel in our vehicles by at least 20%, c) Switch our appliances from fossil fuels to electric, and d) Power our community with 100% carbon neutral electricity.4
Overall, the Energy Department aims to design SJCE programs to increase equity and access to the benefits of renewable energy and electrification. The Programs Roadmap outlines five guiding principles for program selection that the Transportation and Environment Committee approved on June 3, 2019:
1. Maximize greenhouse gas reduction opportunities
2. Align with Climate Smart San José, the city’s climate action plan
3. Promote equity and affordability and support disadvantaged communities
4. Produce customer and community benefits
2 Based on 2024 projected operating expenses, SJCE has 142 days of operating expenses in reserves as of the end of 2023. San Jose Clean Energy Second Quarter FY 2023-2024 Financial Statements 3 SJCE Financial Reserves Policy (pg. 71)
4 San José Framework for Carbon Neutrality by 2030
TRANSPORTATION & ENVIRONMENT COMMITTEE
February 12, 2024
Subject: San José Clean Energy Programs Roadmap Update
5. Maintain or improve the financial status of SJCE
Current Programs Status
SJCE currently offers 12 customer programs and pilots as approved by the City Council (Figure 1). The programs have a combined total lifetime cost of up to $38.5 million, approximately 80% of which is funded by external sources. Descriptions and updates on program performance are found in Appendix A. Impacts from a selection of the programs are detailed in Table 1.
Figure 1. Current SJCE programs and educational initiatives Table 1. Impacts of a selection of SJCE’s current programs through the end of 2023 Electricity
savings
Greenhouse gas
reductions
Customer
savings
Installations/
customers served
California
Electric Vehicle
Infrastructure
Project
(CALeVIP)
-
875 metric tons
CO2
$2,191,000
26 direct current
fast chargers, 140
Level 2 chargers
Solar Access -
360 metric tons
CO2
$395,500 Approximately
840 participants
Home
Appliance
Savings
Program
238,000
kilowatt-hours
87 metric tons
CO2
$199,500
65 appliances
installed, 140
smart power
strips, and 167
smart thermostats
TRANSPORTATION & ENVIRONMENT COMMITTEE
February 12, 2024
Subject: San José Clean Energy Programs Roadmap Update
Energy Efficient
Business
Program
17,634,000
kilowatt-hours
990 metric tons
CO2
$6,339,000 574 businesses
served
Peak Rewards 8,000
kilowatt-hours
3 metric tons
CO2
$10,000 9 participants, 13
enrolled
SJ Cares - - $19,900,000
Approximately
70,000
participants
Total 17,880,000
kilowatt-hours
2,315 metric
tons CO2
$29,036,500
-
ANALYSIS
Programs Prioritization, Scoring, and Community Input
In Fall 2023, staff developed a framework to evaluate current and future energy programs. Staff first researched to develop a list of metrics other program implementers use. These metrics were considered and compared against the SJCE program guiding principles. Staff ultimately selected five metrics, each of which was given a weighting and listed here from highest to lowest:
1. Greenhouse gas emissions reductions,
2. Investment in priority communities,
3. Customer savings,
4. Peak demand reductions, and
5. Fiscal impact for SJCE.
To develop a score for each program, staff calculated each metric value divided by the total program budget, normalized each metric value, multiplied the normalized values by their weighting factors, and summed together to yield one score. Because of the high weight given to greenhouse gas emissions reductions, programs with higher reductions tended to score the highest. Certain aspects of programs that were challenging to quantify, including contribution to personal and community resiliency, ensuring all customer groups are served, and availability of external funding, were considered after the scores were developed. The recommended programs below are programs that scored highest in each of the program priority areas and met the other non-quantitative goals.
Staff also sought community input. In early 2024, staff hired a consultant to gather input from community members on their energy program priorities. Energy Department staff conducted an online survey in English, Spanish, and Vietnamese. Survey respondents indicated that the cost of their electricity bill, followed by power outages and climate change, are their top energy priorities. Homeowners identified cost as the main barrier preventing them from making energy upgrades, such as installing solar and heat pumps at their homes. Most respondents who are renters indicated they had not talked to their landlord about energy upgrades they are interested
TRANSPORTATION & ENVIRONMENT COMMITTEE
February 12, 2024
Subject: San José Clean Energy Programs Roadmap Update
in and would not buy an EV if they couldn’t charge at home. Staff will further unpack these results in listening sessions in the same languages in early March 2024.
Recommended New Near-Term Programs
Staff recommends pursuing the programs5depicted in Figure 2 and Table 2 below for the remainder of FY 2023-2024 and FY 2024-2025. The maximum total cost borne by SJCE for these programs is $6.5 million (see Appendix B for a breakdown by program). SJCE would leverage approximately $5.5 million in additional, existing external funding sources for these programs and continue to pursue external funding opportunities, including funding made available by the Bipartisan Infrastructure Law and Inflation Reduction Act. This results in a maximum total program investment of $12 million through FY 2024-2025. At least 56% of program incentive funding will be reserved for priority communities, surpassing SJCE’s goal of 50%.
6 The anticipated impacts of a subset of the new proposed programs are detailed in Table 3 below.
Figure 2. Recommended new near-term programs
Table 2. Summary of recommended new near-term programs
Area Program Description
Vehicle
electrification
City of San José fleet electrification master plan: Work with a consultant to produce a master plan guiding zero-emission vehicle procurement and installing accompanying chargers at City properties for fleet and public use in partnership with the Departments of Public Works and Transportation. 5 Three are expansions of existing programs: demand response expansion (build off Peak Rewards), Solar Access, and Emergency Bill Relief.
6 SJCE’s goal for reserving half of program incentive funding for priority communities will be included in the Energy Department’s Racial Equity Action Plan.
TRANSPORTATION & ENVIRONMENT COMMITTEE
February 12, 2024
Subject: San José Clean Energy Programs Roadmap Update
Residential super off-peak charging rate pilot: Create a new electrification rate plan with lower residential electricity rates from 9 a.m. to 2 p.m. to incentivize EV charging during the middle of the day.
Telematics-based managed charging: Shift EV charging for 500 residential EVs from evening peak and overnight to daytime, when electricity is cleaner and cheaper.
Building
electrification
Heat pump incentive: Offer residential customers incentives to install heat pump water heaters and heat pump HVAC systems, with additional incentive adders for low-income customers.
On-bill financing pilot: Offer zero-interest loans to residential customers who install heat pump water heaters and/or heat pump HVAC systems. Loans will be repaid through a charge on the customers’ monthly electricity bill.
Workforce development: Collaborate with the International Brotherhood of Electrical Workers (IBEW), other labor organizations, and industry consultants to develop programs to improve workforce development. May include scholarships for pre-apprenticeship or apprenticeship programs or sponsoring training events.
Distributed
energy
resources
Demand response expansion: Expand SJCE’s demand response efforts to include options for both residential and commercial customers, as well as to provide additional options for participation with smart thermostats, electric vehicle smart chargers, and batteries.
Solar Access expansion: Leverage a surplus in energy from the West Tambo Solar Project to serve an additional 150 residents under the Solar Access program, providing a 20% bill discount and 100% renewable energy.
Battery storage incentive: Develop an incentive program for residential or commercial customers to install battery storage and allow SJCE to tap into their battery for daily load shifting and grid emergencies.
Programspecific ratesEmergency Bill Relief (full program): Provide funds for overdue bill payments to households at immediate or potential future risk of disconnection.
Table 3. Expected annual impacts of a selection of SJCE’s recommended programs Electricity
savings
Greenhouse
gas reductions
Customer
savings
Expected
installations/
customers
served
TRANSPORTATION & ENVIRONMENT COMMITTEE
February 12, 2024
Subject: San José Clean Energy Programs Roadmap Update
Residential Super-Off
Peak Charging Rate
Pilot
-
30 metric tons
CO2
TBD 1,000 customers
Heat Pump Incentive &
On-Bill Financing Pilot -
2,900 metric
tons CO2
$535,000 500 heat pumps
installed
Demand Response
Expansion
100,000
kilowatt-hours
40 metric tons
CO2
$110,000 4,000 customers
Telematics-based
Managed Charging -
40 metric tons
CO2
$85,000 500 customers
Solar Access
Expansion -
30 metric tons
CO2
$50,000 150 customers
Battery Storage
Incentive -
200 metric tons
CO2
$500,000 200 customers
Emergency Bill Relief - - $1,000,000 1,000 customers
Total 100,000
kilowatt-hours
3,240 metric
tons CO2
$2,280,000 7,350
customers
Vehicle Electrification
In August 2022, the California Air Resources Board established the Advanced Clean Cars rule that will rapidly scale down the availability of new cars that run on gas, and by 2035, only zeroemission cars and light trucks will be for sale. EV adoption to date has been concentrated among higher-income households that can charge at home. While the high purchase prices have been a barrier to EV adoption for many, federal and state programs and market forces are making EVs more affordable and accessible for low-income consumers. However, low-income households and renters face barriers to installing charging at their homes and may have limited access to public charging infrastructure. Control of EV charging retail rates will be essential for the City to ensure that low-income residents have affordable charging options. Fast-charging retail rates – set by third-party owners of chargers – can be significantly higher than off-peak home charging rates. While both options cost less than gas, residents who are unable to charge at home may face higher fueling costs without intervention.
In FY 2023-2024 and FY 2024-2025, the Energy Department and other City of San José departments working on transportation electrification are focused on two priorities:
1. Developing a master plan to electrify the City of San José fleet and install accompanying charging infrastructure, and
2. Ensuring residents have equitable access to public charging infrastructure and affordable charging rates.7
SJCE is additionally focused on shifting more EV charging to the middle of the day to reduce the strain on the grid, lower costs, and help ensure abundant clean solar resources are fully utilized. 7 More on the drivers behind these goals and the City’s workplan to achieve them can be found in the Memo to Transportation and Environment Committee (Departments of Energy, Public Works, and Transportation), November 13, 2023
TRANSPORTATION & ENVIRONMENT COMMITTEE
February 12, 2024
Subject: San José Clean Energy Programs Roadmap Update
A 2022 Stanford University study found that most EV drivers should shift charging from peak periods and overnight to daytime charging at work, home, or public charging stations to avoid expensive overinvestments in energy and distribution resources. 8 • City of San José Fleet Electrification Master Plan: Staff from the Energy, Public Works, and Transportation Departments are working with a consultant to develop a master plan to guide electrification of the City of San José fleet and new accompanying charging infrastructure. The master plan scope includes 1) providing a vehicle procurement and charger installation schedule; 2) identifying costs for EV procurement and charging infrastructure; 3) assessing the electrical capacity of City buildings and grid capacity on the circuit to identify the best approaches to install charging infrastructure in the most needed areas for fleet, employee, and public vehicles; and 4) evaluating potential integration with SJCE’s Direct Current Fast Charging Hubs Pilot Program. Staff is targeting to receive a final Master Plan in spring/summer 2024 to position the City for grant applications, such as the federal Charging and Fueling Infrastructure Community Program, to fund charging infrastructure for the City fleet and public use, particularly in low-income communities with little to no public charging infrastructure. • Residential Super Off-Peak Charging Rate Pilot: Residential customers with an EV, battery storage, heat pump water heater, or heat pump HVAC can enroll in E-ELEC, a new time-of-use rate plan incentivizing electrification. Staff recommends launching a pilot in mid-2024 that adds a new “E-ELEC-SJ” rate plan with a new super off-peak period from 9 a.m. to 2 p.m. with the lowest rates of the day to incentivize EV charging (and other electrification uses) when the grid is typically flush with solar energy. For the pilot, SJCE will not raise rates in the other time-of-use periods in E-ELEC to compensate for the lower rates in the super off-peak period. Staff propose to automatically enroll current customers in E-ELEC without solar into E-ELEC-SJ. E-ELEC-SJ will be open to residential customers with an EV, battery storage, heat pump water heater, or heat pump HVAC. The proposal would not automatically enroll legacy solar customers because they could potentially lose money on the energy their panels export to the grid. 9 Staff will
conduct an outreach and marketing campaign to the approximately 900 customers currently enrolled in E-ELEC without solar and to EV drivers without solar to build awareness of E-ELEC-SJ. Staff will study rate plan uptake and resulting load shifting and revenue impacts.
• Telematics-based managed charging system: Telematics-based managed charging systems use software to communicate with electric vehicles' onboard technology and communications systems to control when they charge. Several CCAs have successfully used telematics to shift some of their residential customers’ EV charging from the evening peak (4 p.m. to 9 p.m.) and overnight to low-carbon daytime periods. 8 Powell, S., Cezar, G. V., Min, L. et al. Charging infrastructure access and operation to reduce the grid impacts of deep electric vehicle adoption. Nat Energy (2022).
9 Legacy solar customers refers to customers who submitted an interconnection application before April 14, 2023 and are part of Net Energy Metering 1.0 or 2.0.
TRANSPORTATION & ENVIRONMENT COMMITTEE
February 12, 2024
Subject: San José Clean Energy Programs Roadmap Update
Participants are compensated for daytime charging “events” and have saved $200+ annually on their energy bills by shifting charging to lower-cost time-of-use periods.10 CCAs’ telematics programs have also improved grid resiliency by shifting charging during Flex Alerts and other grid emergencies.11 Energy Department staff aim to provide managed charging for 500 EVs in San José starting in 2024. Staff will develop costbenefit analyses comparing the loading shifting and customer savings impacts of the telematics program versus the residential super off-peak rate pilot.
Building Electrification
In San José, buildings are responsible for 31 percent of greenhouse gas emissions, primarily due to natural gas usage. Residential appliances that typically burn natural gas and cause most of these emissions are furnaces, water heaters, gas stovetops, and clothes dryers. Each of these appliances can be replaced by proven, accessible, and efficient electric appliances, such as heat pumps for space heating and cooling, heat pump water heaters, electric dryers, and electric stoves, including induction (Appendix C). Gas water heaters and HVAC systems are responsible for over 90% of natural gas usage in residential homes, so replacing these systems will have the largest impact on home emissions reductions. Switching to electric appliances also improves indoor air quality since natural gas appliances can release carbon monoxide, formaldehyde, and other harmful pollutants into the air.
In 2023, the Bay Area Air Quality Management District, which covers nine Bay Area counties, voted to ban the sale of space and water heaters that emit nitrogen oxides in 2029 and 2027, respectively. Currently, the only zero-nitrogen oxide space and water heating appliances are electric. Energy Department staff are currently working with a consultant to design a suite of building electrification programs to prepare the community for the implementation of these regulations and make progress toward San José’s 2030 carbon neutrality goal, including providing solutions to help customers afford building electrification upgrades and ensuring the workforce is ready to support these installations. The American Council for an Energy Efficiency Economy has selected the Energy Department to receive free technical assistance over the next year to increase renter participation in electrification and energy efficiency programs, engage landlords and tenants, and develop renter protection policies for the programs. Each program detailed below will also include marketing and education efforts to educate customers and the workforce about the benefits of building electrification. 10 Silicon Valley Clean Energy & ev.energy. June 2021. Whitepaper: “An events-based approach to low-carbon charging.”
11 The California Independent System Operator, which operates the electric grid for most of the state, can call Flex Alerts when it forecasts the potential for demand for electricity to outstrip supply. Flex Alerts are calls to consumers to voluntarily reduce their electricity usage (typically starting at 4 p.m.) and shift it to off-peak hours (normally after 9 p.m.). If Flex Alerts do not lower electricity demand sufficiently, the California Independent System Operator can issue three increasing levels of Energy Emergency Alerts. MCE Clean Energy shifted 96% of its program participants’ EV charging during the 10-day heatwave in September 2022 – about 5 megawatt-hours (ev.energy Press Release: October 12, 2022. Bay Area EV Drivers Helped Prevent Blackouts During 2022 Heat Waves with MCE Load-Shifting Program).
TRANSPORTATION & ENVIRONMENT COMMITTEE
February 12, 2024
Subject: San José Clean Energy Programs Roadmap Update
• Heat Pump Incentive: SJCE customers (or contractors on behalf of customers) will be able to get incentives for installing heat pump water heaters and heat pump HVAC systems in homes. Additional incentive adders will be available for customers in priority communities. The average project cost for installing a heat pump water heater is $6,500.
Available regional, state, and federal incentive and tax credit programs will cover $2,230 to $5,975 in heat pump water heater project costs, depending on the design and customer qualification for incentives. The average cost for heat pump HVAC projects is $16,700 to $23,305, depending on whether the system is ducted. Available regional, state, and federal incentive and tax credit programs will cover $6,150 to $12,650 of project costs.
More information on project costs and incentives can be found in Appendix D. The incentive program aims to cover the average cost gap for low-income customers and lower the cost gap for higher-income customers. The program will be designed in consideration of forthcoming incentives from the Inflation Reduction Act and will be available to single-family and multifamily homes. The first year of program implementation will focus on equipment sizes that serve a single household, but staff intend for future program iterations to also include central systems more typical of multifamily. Staff also hope to add an incentive for installing weatherization measures (such as air sealing and upgrades to insulation), which increase the energy efficiency of homes and can lead to a lower load requirement for heat pump equipment. As part of the program, staff hope to work with contractors to establish a fixed baseline installation cost for the region to support ease of installation and transparency. Staff’s goal is to have 500 heat pumps installed in FY 2024-2025.
• On-bill Financing Pilot: An incentive program for building electrification technologies can help to reduce the upfront cost of installation but will likely not cover the entire project cost. To support customers making emissions-reducing upgrades, SJCE will provide zero-interest loans to cover the after-incentives cost of installing a heat pump water heater and/or heat pump HVAC system, up to $5,000. The loans will be repaid over a period of five years, and customers will be charged the monthly payment through their electricity bill. This program will provide access to capital for lower-income customers who have traditionally been unable to afford clean energy upgrades. • Workforce Development: Energy Department staff will collaborate with IBEW and other unions, labor groups, contractor groups, and the City’s Office of Economic Development and Cultural Affairs to support the building electrification workforce in San José. The Department has an industry consultant under contract to research the current state of the electrification workforce (general contractors, electricians, plumbers, etc.) in San José, existing workforce training programs, and evaluate the speed at which buildings can be electrified with the current workforce. The study will determine the workforce size needed to meet the Bay Area Air Quality Management District 2027 and 2029 regulations and the City’s carbon neutral by 2030 goal. The consultant will also identify career pathways that should be developed to help ensure that the workforce represents San José’s diverse communities, the building electrification jobs are high
TRANSPORTATION & ENVIRONMENT COMMITTEE
February 12, 2024
Subject: San José Clean Energy Programs Roadmap Update
quality, and that the workforce that supports the installation and maintenance of gas appliances can transition to supporting building electrification or other scopes of work.
Once this analysis is completed in mid-2024, staff will develop workforce development programs that utilize the community development funds SJCE secures through its clean energy power purchase agreements with developers for utility-scale clean energy resources. Potential programs may include scholarships for enrollment in apprenticeship or pre-apprenticeship programs, sponsoring appliance-specific training, or incentives awarded for successful installations of electrification technologies.
Distributed Energy Resources
Distributed energy resources are resources on the customer side of the utility meter (or “behind the meter”), such as rooftop solar, home battery storage, and demand response. This contrasts with utility-scale solar, wind, batteries, and other energy sources located in “front of the meter.” California’s investments in solar power have resulted in an abundance of electricity during daylight hours. This abundance very quickly turns into a shortfall as the sun begins to set and is exacerbated on hot summer nights when homes run their air conditioners in unison. To maintain grid stability, utilities are investing in battery storage. But peaking power plants – highly polluting natural gas power plants specifically designed for quick start-up – are also still used.
Increasing supply is not the only way to meet electricity demand during these critical times of the day; paying customers to reduce their electricity usage is a cost-effective way to meet demand while reducing greenhouse gas emissions. Demand response programs call on residents and businesses to reduce their energy use during energy-saving events, which can occur throughout the year when market prices for electricity are high or during grid emergencies when overall demand is projected to be greater than what is available. • Demand Response Expansion: Demand response programs are an effective way to reduce volatility in power costs during the most expensive times of the year and to increase grid reliability. In addition, they help reduce greenhouse gas emissions by shifting electricity use to times of the day when the grid mix is cleaner. For the Summer of 2023, SJCE marketed the Peak Rewards demand response pilot to large commercial customers. For the remainder of the fiscal year and into FY 24-25, SJCE seeks to use lessons learned from this pilot to launch a full demand response program open to all commercial and residential customers enrolled in SJCE. This program will not only expand in size but will also be more robust and support automated participation through technologies like smart thermostats, smart power strips, EV chargers, and home batteries.
SJCE will hire a program implementer to help meet its goal of achieving 5 MW of reductions by the end of FY 2024-2025.
• Solar Access expansion: SJCE’s Solar Access program currently serves approximately 840 low-income customers in disadvantaged communities, providing a 20% bill discount and powering their residences with 100% renewable electricity from solar from a 2-
TRANSPORTATION & ENVIRONMENT COMMITTEE
February 12, 2024
Subject: San José Clean Energy Programs Roadmap Update
megawatt (MW) facility in Merced County.
12 Staff recommends funding the same
discount for approximately 150 additional customers and serving them with the excess solar energy produced by the Merced County Facility.
13 • Battery storage incentive: Staff propose developing an incentive program for customersited battery storage with the goal of improving grid reliability and reducing price volatility, as well as to provide additional resiliency to homes or businesses. The incentive program would be designed to lower the costs of battery equipment and installation, particularly for solar customers, to reduce the net demand on the grid during peak hours. Participants could receive a rebate for installation in exchange for mandatory participation in SJCE’s demand response and/or daily load shifting program, which would allow SJCE to leverage a portion of the battery as a resource during peak hours of the day.
Program-specific Rates
Electricity is a critical utility service and a basic human need. Low-income households bear a disproportionate burden of energy bills; these households not only spend a higher portion of their income each month on energy but often live in less energy-efficient homes and lack access to energy-saving technologies. As customers fall behind on bills, they run the risk of disconnection.
Disconnections have a disparate impact on low-income communities and communities of color and can be detrimental to health for customers reliant on electricity for medical devices and lifesupporting systems. SJCE is tracking customers with missed payments and determining the best way to intervene in PG&E’s disconnection process to provide these customers with resources and avert disconnection.
• Emergency Bill Relief: Following the completion of the Council-approved pilot, staff recommends expanding the Emergency Bill Relief program to serve the approximately 1,000 San José households annually that receive rent assistance through the County’s Homelessness Prevention Program. Sacred Heart and its 19 partner organizations screen applicants to ensure those most in need receive assistance. Understanding that not paying utilities can lead to significant disruptions such as disconnection of electricity service, staff propose to provide a large one-time credit to offset any arrearages and a smaller bill credit for three months. The exact credit amounts will be defined after the completion of the pilot in summer 2024.
Grant and Funding Opportunities
12 Map of disadvantaged communities as designated by the California Environmental Protection Agency and California Public Utilities Commission.
13 The California Public Utilities Commission (CPUC) reimburses SJCE for Solar Access expenses, including the bill discounts for the existing 840 customers and the cost of producing energy for 1.7 MW out of the total 2.0 MW at the Merced Solar Facility. Staff recommends funding the same discount for approximately 150 additional customers and serving them with the remaining 0.3 MW of solar.
TRANSPORTATION & ENVIRONMENT COMMITTEE
February 12, 2024
Subject: San José Clean Energy Programs Roadmap Update
In partnership with the City Manager’s Office Intergovernmental Relations team and other departments, Energy staff is tracking and planning to apply to several federal and state grant opportunities to supplement SJCE’s programs funding.
Table 4. Federal and state grant opportunities, organized by application due date Grant
Name/Agency
Opportunity Application
Amount
Timeline
American Council
for an Energy
Efficiency
Economy
(ACEEE) Energy
Equity for Renters
Free technical assistance to
increase participation in energy
efficiency and electrification
programs among households that
rent; support in program and
policy design
N/A Awarded; will
receive support
through early 2025
Greenhouse Gas
Reduction Fund
(Solar for All), US
EPA
Funding to expand Solar Access or
for new low-income home solar
and storage programs
TBD; up to
$375M as a
coalition
Applied as part of
two coalition
applications in Sept.
2023; awards
expected March
2024
Climate Pollution
Reduction
Implementation
Grant, US EPA
Funding for residential building
electrification in priority
communities; regional applications
favored
TBD; up to
$500M as a
coalition
Applications due
April 1, 2024;
joining Bay Area
coalition
Locally Invested
Transportation
Equity Pilot
Program, CPUC
Funding for an innovative EV
charger installation program
serving multifamily residents in
disadvantaged communities
Up to $4M Applications due
March 14, 2024;
considering joining
coalition
Charging
Infrastructure for
Government
Fleets, California
Energy
Commission
Funding for Level 2 and/or fast
charging EV charging
infrastructure to support a lightduty fleets under a single government entity. Minimum of
100 charging ports.
The lessor
of $6M or
70% of
project costs
Applications due
April 5, 2024
Distributed
Electricity Backup
Assets Program,
California Energy
Commission
Up to 80% of project costs for
residential and customer-sited
battery storage that must dispatch
energy during grid emergencies;
upfront payment plus payments
over 5 years for performance
during grid events
TBD Applications
expected by mid2024; considering
joining coalition
Charging and
Fueling
Infrastructure
Funding for Level 2 and/or fast
charging EV infrastructure at
various City properties to meet
$10-20M Next round of
funding expected to
TRANSPORTATION & ENVIRONMENT COMMITTEE
February 12, 2024
Subject: San José Clean Energy Programs Roadmap Update
(CFI) Community
Program, US DOT
fleet and public charging needs
(20% match requirement)
open April-June
2024
Environmental and
Climate Justice
Community
Change, US EPA
Funding for building
electrification workforce
development for priority
communities; must be led by
community groups
$10-20M Applications
accepted on a rolling
basis through
November 2024
Energy Efficiency
Elect to
Administer, CPUC
Funding for energy efficiency and
electrification measures
TBD Eligible to apply for
funding for 2025-
2027
Inflation
Reduction Act
Investment Tax
Credit
10-20% tax credit adder for
investments in utility scale clean
energy resources sited in lowincome communities or if the resource will provide power to
low-income communities
TBD Annual allocations
through 2032
Future Programs: FY 2025-2026 and Beyond
Staff recommends a greater focus on vehicle electrification in the next fiscal years, particularly on installing EV charging stations in neighborhoods lacking charging infrastructure and on removing barriers for low-income households to purchase an EV. SJCE will continue to identify the latter through its EV education program and community engagement. Staff will also continue to explore opportunities to make solar and storage more affordable for low-income households and attainable for people with low credit scores, including power purchase agreements, interest rate buydowns, on-bill financing, and incentives to developers to inform program recommendations for future fiscal years. Potential future programs for FY 2025-2026 include:
Vehicle Electrification
1. Low-income EV Purchase Incentive and/or Interest Rate Buydown Pilot for qualifying customers to purchase a new or used EV. Staff would explore partnering with dealerships to offer the incentive at point-of-sale instead of an after-purchase rebate and explore partnering with financial institutions or dealerships to reduce interest rates to enable customers with low credit scores to finance their vehicles more affordably.
2. Low-income EV Charge Card Pilot for qualifying customers to subsidize costs to charge at third-party operated level 2 and fast chargers. Staff would explore partnering with thirdparty charger operators and financial institutions to offer a seamless method to lower retail charging rates at chargers around the city.
3. Workplace Charger Program to incentivize the installation of Level 2 chargers at businesses in San José that predominantly employ multi-family and/or low-income residents currently lacking access to EV charging.
4. Low-income E-bike Rebate for qualifying customers to purchase an electric bike.
TRANSPORTATION & ENVIRONMENT COMMITTEE
February 12, 2024
Subject: San José Clean Energy Programs Roadmap Update
Building Electrification
5. Energy Advisor Concierge Service to guide homeowners through selecting a contractor, understanding project costs, applying for rebates and incentives, and any installation issues.
6. Water Heater Loaner Pilot to install a temporary gas-powered water heater for homeowners who need electrical upgrades before replacing their failed gas water heater with a heat pump water heater.
Distributed Energy Resources
7. Automated Device Shop that includes free smart thermostats, smart plugs, and discounts on other internet-connected devices for low-income residential customers to enable participation in SJCE’s Demand Response program.
EVALUATION AND FOLLOW-UP
Staff provides regular updates to the Transportation and Environment Committee on SJCE program performance through the semiannual Climate Smart updates and annual Programs Roadmap update. Staff will provide more details on SJCE’s planned building electrification workforce development programs resulting from its consultant study and engagement with labor and contractors in the Building Electrification Special Session tentatively scheduled for fall 2024.
COST SUMMARY/IMPLICATIONS
As described above, staff recommends allocating a maximum of $6.5 million of rate payer funds across the remainder of FY 2023-2024 and FY 2024-2025 and leveraging approximately $5.5 million in additional external funding sources for customer programs. Estimated spending levels in the current year of $4.2 million would be deployed from existing appropriations, and estimated spending of $7.8 million would be subject to the 2024-2025 Proposed Budget development process. All expenditures would be paid from the San José Clean Energy Fund.
COORDINATION
This memorandum has been coordinated with the City Attorney’s Office, the City Manager’s Budget Office, the Environmental Services Department, and the Department of Transportation.
PUBLIC OUTREACH
This memorandum will be posted on the City’s Council Agenda website for the March 4, 2024 Transportation and Environment Committee meeting.
TRANSPORTATION & ENVIRONMENT COMMITTEE
February 12, 2024
Subject: San José Clean Energy Programs Roadmap Update
COMMISSION RECOMMENDATION AND INPUT
No commission recommendation or input is associated with this action.
CEQA
Statutorily Exempt, ER24-021, CEQA Guidelines Section 15601(b)(3), Review for Exemption; and
Categorically Exempt, File No. ER24-021, CEQA Guidelines Section 15303, New Construction or Conversion of Small Structures.
PUBLIC SUBSIDY REPORTING
This item does not include a public subsidy as defined in section 53083 or 53083.1 of the California Government Code or the City’s Open Government Resolution. /s/
LORI MITCHELL
Director, Energy
For questions, please contact Kate Ziemba, Senior Environmental Program Manager at [email protected].
APPENDIX
Appendix A: Current Programs Status
Appendix B: Programs Budget Breakdown through Fiscal Year 2024-2025 Appendix C: Overview of Building Electrification Technologies Appendix D: Summary of Residential Building Electrification Incentives and Average Upgrade Costs
ATTACHMENT
Attachment A: SJCE Programs Roadmap
TRANSPORTATION & ENVIRONMENT COMMITTEE
February 12, 2024
Subject: San José Clean Energy Programs Roadmap Update
Appendix A: Current Programs Status
Vehicle Electrification
• California Electric Vehicle Infrastructure Project (CALeVIP): CALeVIP is a $14 million rebate program for Level 2 and Direct Current Fast Charging (DCFC) infrastructure co-funded by SJCE and the California Energy Commission and administered by the Center for Sustainable Energy. CALeVIP launched in December 2020 and closed to new applications in June 2023. As of January 2024, 140 Level 2 and 26 Direct Current Fast Chargers funded by the program are operational. About 40% of the funds have been reserved or issued to projects in low-income and disadvantaged communities. The program is expected to conclude in Q4 2025, at which point any unspent funds committed by the City would be returned to the City. Unspent funds committed by the California Energy Commission will be re-allocated to other state programs. Staff is exploring offering technical assistance to recent applicants to increase the number of applications that result in completed projects.
Table 5. Location of operational EV chargers in San José funded by CALeVIP Installation Street ZIP Main Site Use Equipment
Number of
Connectors
1278 S. 10th St 95112 College/University
6 DCFC, 20
L2
12 DCFC, 20
L2
1595 Branham Ln 95118
Commercial (Grocery
store) 2 DCFC 4 DCFC
1688 Hostetter Rd 95131
Commercial (Retail
shopping center)
6 DCFC, 20
L2
12 DCFC, 20
L2
1005 Saratoga Ave 95129
Commercial (Gas
station) 1 DCFC 2 DCFC
84 W Santa Clara St 95113 Commercial 4 L2 4 L2
4000 Ellmar Oaks
Dr 95136 Multi-unit dwelling 20 L2 20 L2
838 Cinnabar St 95126 Multi-unit dwelling 20 L2 20 L2
2045 Lundy Ave 95131 Workplace 4 L2 8 L2
10 W Trimble Rd 95131 Commercial (Hotel) 6 DCFC 12 DCFC 415 E Taylor St 95112 Multi-unit dwelling 5 L2 10 L2
1790 S 10th St 95112
Commercial (Gas
station) 1 DCFC 2 DCFC
750 N King Rd 95133 Multi-unit dwelling 20 L2 20 L2
760 N 7th St 95112 Multi-unit dwelling 5 L2 10 L2
1202 Oakland Rd 95112
Commercial (Gas
station) 2 DCFC 4 DCFC
5981 Optical Ct 95138 Workplace 20 L2 20 L2
TRANSPORTATION & ENVIRONMENT COMMITTEE
February 12, 2024
Subject: San José Clean Energy Programs Roadmap Update
875 Blossom Hill
Rd 95123
Commercial (Gas
station) 2 DCFC 4 DCFC
55 S Market St 95113 Workplace 2 L2 4 L2
• Direct Current Fast Charging Hubs Pilot Program: In November 2022, the City Council approved SJCE’s direct current fast charging hubs pilot, which will result in one to three hubs being installed in low-income or disadvantaged communities in San José to increase access to affordable and reliable EV charging. Each hub will contain parking spaces and chargers to accommodate at least 10 EVs and run for 10 years. SJCE will control variable retail pricing to encourage middle-of-the-day charging. Since then, staff bid out the program, negotiated with bidders, conducted interviews with other market participants, and determined that the program should be rebid to receive more offers.
Additionally, staff believe there could be cost and scaling benefits if the program were to align with the City’s fleet charging needs. The consultant producing the City Fleet Electrification Master Plan will analyze whether there are synergies; if so, staff will return to the City Council for consideration of an amended program proposal. • EV Shopping Tool: In January 2024, the Finance Department completed their procurement for a vendor to develop an online multilingual website for comparing lifetime costs and emissions for EVs versus gas-powered cars and finding incentives and nearby chargers. The tool will be part of the SJCE website and launch in spring 2024. • EV Education: SJCE is focused on increasing EV vehicle adoption in San José, especially among residents with lower incomes and those who face the highest barriers to adoption. From March through June 2023, staff conducted outreach and engaged residents in East San José through neighborhood groups, schools, and community organizations. As part of these efforts, SJCE supported a “community dinner” wherein dozens of residents enjoyed a meal together before learning about how e-mobility solutions can help them take air quality into their own hands. Attendees also received information about rebates and incentives for purchasing or leasing an EV. In July, SJCE published a blog, “I Just Bought an EV and Here’s What I Learned.” In addition, SJCE is financially supporting three non-profit partners to help promote the benefits of vehicle electrification. Through one partner, SJCE sponsored four “EV 101/102” webinars where residents could learn all about EV basics. In August, SJCE also sponsored and promoted Silicon Valley Clean Cities Coalition’ annual Ride-and-Drive event for a third time.
SJCE helped cover costs for a Clean Air Day community dinner in October. In December, SJCE was accepted into the U.S. Department of Energy’s “Clean Energy to Communities” peer-learning cohort. SJCE will participate in the six-month cohort alongside the Silicon Valley Clean Cities Coalition to assess community transportation needs and design effective engagement strategies. SJCE will continue similar educational and community engagement efforts in CY 2024 and 2025.
Building Electrification
TRANSPORTATION & ENVIRONMENT COMMITTEE
February 12, 2024
Subject: San José Clean Energy Programs Roadmap Update
• Electric Cooking Health Education: In 2023, SJCE launched a fun, informational campaign to normalize the use of induction and other electric cooking by highlighting the health and cost-saving benefits. The campaign is meant as a conversation-starter on the importance of electrification for the health and viability of our communities. Staff partnered with a community-based organization to host a Vietnamese induction cooking demo and designed a “Flameless Flavor” hot sauce to give away at outreach events and spark conversation. In 2024, staff will also publish engaging blog and social media video content about the benefits of electric and induction cooking.
Distributed Energy Resources
• Peak Rewards: In May 2023, SJCE launched Peak Rewards, a demand response program for businesses. SJCE enrolled nine businesses and called six energy-saving ‘Peak Events’ events in 2023. Peak Events are triggered by temperature, projected electricity market prices, and/or state predictions for grid emergencies. The best performing Peak Event resulted in 1 MW of peak demand reduction, which is the same as the usage of 500 homes. SJCE plans to apply lessons learned during summer 2023 as it designs its demand response program expansion in 2024.
• Solar Access: The Disadvantaged Community Green Tariff program, now named Solar Access for SJCE customers, is a CPUC-funded program that provides a 20% bill discount and 100% solar energy to more than 840 low-income customers living in San José disadvantaged communities. Customers receive the Solar Access discount in addition to their California Alternative Rate for Energy (CARE) or Family Electric Rate Assistance (FERA) monthly discounts, for up to 55% off their electricity bill. SJCE launched Solar Access in late 2021.
14 The CPUC allotted SJCE a program capacity of 1.7 megawatts to serve program participants. SJCE procures this energy from an interim resource and expects its permanent resource to complete construction in 2024. Staff continue to maintain full enrollment each month through a combination of customer applications and auto-enrollments.
Energy Efficiency
In September 2022, SJCE launched two energy efficiency programs with a combined budget of approximately $5.1 million from the CPUC. Both programs are implemented by Franklin Energy Services and will end in late 2024. They are estimated to result in 2,800 megawatt-hours of annual savings over the lifetimes of the energy-saving equipment – equal to the annual usage of about 560 homes. Staff are currently exploring applying for another three years of energy efficiency program funding from the CPUC.
• San José Home Appliance Savings Program: This program serves two residential customer groups: single-family homes located in state-defined disadvantaged 14 Solar Access program webpage (also available in Spanish and Vietnamese)
TRANSPORTATION & ENVIRONMENT COMMITTEE
February 12, 2024
Subject: San José Clean Energy Programs Roadmap Update
communities and moderate-income single-family homes citywide.15 The program offers free smart thermostats and 50-70% discounts on new energy-efficient refrigerators, washers, electric dryers, and induction cooktops, with free delivery, installation, haul away of the old appliance, and a five-year warranty. To purchase an appliance, customers must pass the eligibility screen on the San José Clean Energy website to receive a redemption code to be used in person at Airport Home Appliance’s San José store. As of the end of 2023, customers have ordered 140 smart plugs and 167 smart thermostats and purchased 65 appliances. The City Council allocated $500,000 from American Rescue Plan funds to expand the program.
• San José Energy Efficient Business Program: This program offers 80-90% off HVAC, refrigeration, and water heating components and systems and installation.16 While all San José Clean Energy commercial customers are eligible for the program, Franklin Energy and San José Clean Energy staff are targeting marketing to schools and small and medium businesses, including medical and dental offices, restaurants, convenience stores, and small offices. The program takes a concierge approach to customer service, with Franklin Energy program staff helping customers through every step of the process, including offering a free energy audit to identify opportunities, finding a contractor that complies with the CPUC specifications, helping the customer or their contractor apply for the rebates, and providing language assistance in Spanish or Vietnamese. In 2022 and 2023, the program served 574 businesses, many of which are restaurants and grocery stores but also include fitness centers and temples.
Program-Specific Rates
• SJ Cares: SJCE’s SJ Cares program provides a 10 percent monthly discount on its generation rates to approximately 70,000 customers, amounting to $5 million annually in collective savings. Currently, residential and commercial customers who are enrolled in state bill assistance programs CARE and FERA are eligible to receive the SJ Cares discount. To qualify for CARE and FERA, customers have very low incomes, making no more than 40 percent of area median income, or $75,000 for a family of four. In February 2024, the City Council approved an expansion of SJ Cares to nearly 18,000 affordable housing units and to approximately 1,000 participants in Santa Clara County’s Homelessness Prevention Program.
• Emergency Bill Relief Pilot: In February 2024, the City Council approved an Emergency Bill Relief pilot for 100 residential customers screened by Sacred Heart and 19 partner organizations serving the County of Santa Clara’s Homelessness Prevention Program. SJCE will ensure that PG&E will not disconnect their electric service by providing a credit of up to $1,600 directly to the applicant’s utility account. For most 15 San José Home Appliance Savings Program webpage (also available in Spanish and Vietnamese). Moderate income is defined by the CPUC as between 200% and 400% of the federal poverty guidelines, or between $55,000 and $111,000 for a family of four.
16 San José Energy Efficient Business Program webpage (also available in Spanish and Vietnamese)
TRANSPORTATION & ENVIRONMENT COMMITTEE
February 12, 2024
Subject: San José Clean Energy Programs Roadmap Update
applicants, this level of support is expected to eliminate all overdue balances owed to SJCE and PG&E and temporarily avert disconnection. The program will also provide a smaller bill credit for three months following the initial credit. Staff collect data on the number of monthly applicants and the average need per applicant to inform the program design for the full Emergency Bill Relief program.
Resiliency
• Solar + storage at critical City facilities: SJCE is assisting and funding a program manager in the Public Works Department to implement solar and storage at 30 or more critical City facilities such as community centers and fire stations through a power purchase agreement. Adding solar and storage to the sites will allow the facilities to provide critical functions in service of the community. The community centers are located throughout the City and serve as cooling, warming, and resource centers during extreme weather events. SJCE is also funding a consultant to assess sites for inclusion in the power purchase agreement. Staff is currently advising on technologies and will later assist with conducting outreach to developers, the Request for Proposals development and scoring, and power purchase agreement negotiation.
Appendix B: Programs Budget Breakdown through Fiscal Year 2024-2025 Table 6. Current and near-term programs budget breakdown through fiscal year 2024-2025 Program Estimated Cost
CALeVIP $15,000
Fast Charging Hubs Pilot Program* $0
EV Shopping Tool $170,000
EV Education $50,000
Electric Cooking Health Education $30,000
Solar Access $1,200,000
Energy Efficiency (Home Appliance Savings
Program and Energy Efficient Business Program)
$3,000,000
Emergency Bill Relief Pilot $150,000
Solar + storage at critical City facilities $1,000,000
City of San José fleet electrification master plan $130,000 Residential super off-peak charging rate pilot $200,000 Telematics-based managed charging $155,000
Heat pump incentive $1,415,000
On-bill financing pilot** $1,250,000
TRANSPORTATION & ENVIRONMENT COMMITTEE
February 12, 2024
Subject: San José Clean Energy Programs Roadmap Update
Workforce development $500,000
Demand response expansion $750,000
Solar Access expansion $35,000
Battery storage incentive $500,000
Emergency Bill Relief (full program) $1,000,000
Various consultant studies (building electrification,
workforce development, workplace charging, energy
efficiency advice letter)
$450,000
*Spending expected in subsequent fiscal years after tolling agreement is executed **Paid back over time
Appendix C: Overview of Building Electrification Technologies Proven, accessible, and efficient electric appliances can replace natural gas uses within a home.
These appliances are outlined in Table 7 below.
Table 7. Descriptions of electric appliances
Gas-powered
Appliance
Electric
Option
How it Works
Water heater Heat pump
water heater
(HPWH)
• Moves heat rather than makes heat. Pulls heat from the surrounding air and transfers it at a higher temperature into the tank to heat your water.
• Three times more energy efficient than gas water
heaters because heat pumps move heat while gas water
heaters create heat via combustion.
• Typically 240V, but 120V technology is becoming
increasingly available.
Furnace Heat pump
HVAC
system
• Pulls heat from outside for heating indoors and pulls out heat from indoors for cooling.
• Provides heating in the winter and cooling in the
summer, while a gas furnace only provides heating.
• Two types: central/ducted (like central AC) and ductless mini splits
Gas
cooktop/stove
Electric or
induction
cooktop/stove
• Uses magnetism to generate heat. Magnetic coils below the cooktop’s surface generate a magnetic field that
sends pulses directly to the cookware.
• 40-50 percent more energy efficient than gas cooktops.
TRANSPORTATION & ENVIRONMENT COMMITTEE
February 12, 2024
Subject: San José Clean Energy Programs Roadmap Update
Gas heated
clothes dryer
Electric or
heat pump
clothes dryer
• Heat pump clothes dryers send the warm, humid air
generated through drying through an evaporator to
remove the moisture and then reuse it to dry clothes,
using less electricity. They do not require vents.
Electrification will require capacity and spare breaker spaces in the home’s electrical panel.
Electricity flows from the grid through PG&E distribution infrastructure to a home’s electrical panel. Panels are made up of a series of circuit breakers that control the electrical current that flows to outlets. Circuit breakers protect your home from current spikes or overloads.
Approximately 32 percent of single-family homes in San José were built after 1978 and are more likely to have a 200-Amp panel. The remaining 68 percent of homes built before 1978 are more likely to have a 100-Amp panel or lower and may need new electrical panels for safety reasons, especially those older than the 1960s. 17 The tools outlined in Table 8 below can be utilized to cost effectively electrify without requiring an upgrade to the home’s electrical service capacity, which can be costly and time-intensive if the distribution utility needs to upgrade the transformer or other distribution infrastructure.
Table 8. Tools that enable whole home electrification without an electrical panel upgrade Source: Peninsula Clean Energy Design Guidelines for Home Electrification18 Tool What It Does
Circuit-sharing
device
• Allows two appliances to share the same circuit: electric clothes dryer and electric vehicle (EV) charger, HPWH and EV charger, stove and EV charger, stove and HPWH, or two EV chargers.
Circuit-pausing
device
• Measures the total electrical draw of the home and pauses an appliance (typically EV charger) when the home’s total electrical draw gets close to the panel capacity.19
Smart panel • Uses a computer to monitor the home’s entire load, control electrical current, and turn breakers on and off as needed.
120V HPWH • Plugs into a standard 120V outlet, avoiding electrical infrastructure upgrades that may be required for higher voltage equipment Level 1 or low
amperage Level
2 EV charger
• Oversizing EV chargers takes up valuable amp space on the electrical panel. Most daily usage can be met by overnight charging with a Level 1 or low amperage Level 2 EV charger.
17 Building Electrification Institute, San Jose Building Stock and Housing Analysis, August 2020:
https://www.sanjoseca.gov/home/showpublisheddocument/90629/638017001081730000 18 https://www.peninsulacleanenergy.com/wp-content/uploads/2023/02/Design-guidelines-for-home-electrificationv021023.pdf 19 These events are rare. Peninsula Clean Energy analyzed more than 100,000 single-family homes in its service territory and found that 99 percent of both gas-using and all-electric homes never draw more than 100 amps of electric current all year, and more than 80 percent of homes never draw more than 40 amps.
TRANSPORTATION & ENVIRONMENT COMMITTEE
February 12, 2024
Subject: San José Clean Energy Programs Roadmap Update
• Level 1 chargers utilize a 120V outlet and provide 3-6 miles of charge per hour.
• During an overnight charge, a 16A Level 2 charger will provide 96 miles of range while a 40A charger will provide 240 miles of range.
Appendix D: Summary of Residential Building Electrification Incentives and Average Upgrade Costs
Several federal, state, and regional building electrification programs are available or will soon become available to accelerate residential adoption of heat pump HVACs and heat pump water heaters by decreasing costs and covering electrical panel upgrades. Maximum incentive amounts are listed in Table 9 below. For some programs, the actual incentive amount is subject to applicant income and project costs. For example, through the federal High-Efficiency Electric Home Rebate Program (HEEHR), a forthcoming Inflation Reduction Act program, households making 150 percent of the area median income (about $270,000 for a family of four) or lower can get rebates for heat pumps and other appliances as well as energy efficiency projects.
Households making between 80 percent and 150 percent of the area median income can get rebates for 50 percent of project costs, while households making under 80 percent of the area median income can get rebates for 100 percent of project costs, up to the maximum rebate amount.
Table 9. Current and Forthcoming Federal, State, and Regional Incentives for Residential Building Electrification Upgrades
Program HPWH HVAC Cooktop Clothes
Dryer
Electric
Panel
Type
Energy Efficient Home
Improvement Tax Credit
(25C)
Up to
$2,000 Up to $2,000 -
Up to
$600 Tax credit
High-Efficiency Electric
Home Rebate Program
(HEEHR)*
$875-
$1,750
$4,000-
$8,000
$420-
$840
$420-
$840
$2,000-
$4,000
Point-ofsale rebate
Home Energy
Performance-Based
Whole-House Rebates
Program (HOMES)*
Up to $8,000 Rebate
BayREN Home+ Rebates $250-
$400
$250-
$400 $250 $250 - Rebate
California Golden State
Rebate Program
$500-
$700 - - - - Coupon
California Energy-Smart
Homes Program** $5,550-$5,950 $1,000 Rebate
TRANSPORTATION & ENVIRONMENT COMMITTEE
February 12, 2024
Subject: San José Clean Energy Programs Roadmap Update
Self-Generation Incentive
Program (SGIP) $4,185 - - - $4,000 Contractor Rebate
TECH Incentives - $1,000 - - -
Contractor
Rebate
*Forthcoming
**Requires whole-home electrification
Environmental Services staff contracted with AECOM to identify the average project costs to install residential heat pump water heaters and HVACs (Table 10). The cost estimates are based on an analysis of publicly available TECH Clean California data20 and cost estimates prepared for the City of San José by the Building Electrification Institute.21 Many of the incentives can be stacked to reduce electrification upgrade costs to cost the same as or less than their natural gas counterparts (Tables 11-13).22
Table 10. Average Project Costs for Residential Electrification Upgrades 25th Percentile Median 75th percentile
Heat Pump Water Heater
<55 gallons $5,440 $6,500 $8,100
Heat Pump Water Heater
>=55 gallons $6,050 $6,900 $8,650
Heat Pump HVAC
central/ducted $16,860 $22,305 $28,640
Heat Pump HVAC
mini-split $10,420 $16,700 $23,880
Table 11. Average Project Costs for Gas-powered Appliance Replacement Technology Average cost
Water heater $1,670
Furnace and air conditioning $17,000-23,000
Table 12. Heat Pump Net Effective Cost for Households with Incomes Under 150 percent of Area Median Income
Technology Gross Cost Incentive Net Effective Cost
Heat Pump Water Heater $6,500 $5,975 $525
Heat Pump HVAC $22,305 $12,650 $9,655
Table 13. Heat Pump Net Effective Cost for Households with Incomes Over 150 percent of Area Median Income
20 TECH Clean California public data. https://techcleanca.com/public-data/ 21 San José Customer Economics Analysis for Residential Building Electrification. Appendix E1 of the Electrify San José Framework. February 2022.
https://www.sanjoseca.gov/home/showpublisheddocument/90625/638017000335100000 22 Tables 6-7 refer to owner-occupied single-family homes built before 2016.
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February 12, 2024
Subject: San José Clean Energy Programs Roadmap Update
Technology Gross Cost Incentive Net Effective Cost
Heat Pump Water Heater $6,500 $2,230 $4,270
Heat Pump HVAC (central/ducted) $22,305 $6,150 $16,155