In the global fight against climate change, residential energy use plays a crucial role. Heating, cooling, and powering buildings directly account for 12.5% of total U.S. greenhouse gas emissions, making the transition from fossil fuels to clean electric power essential to meeting climate goals. The popularity of home electrification, including residential solar installation, energy-efficient appliances, and heat pumps, is growing, but the industry still faces major challenges. A complicated customer journey, disjointed incentive programs, and labor shortages hamstring the current growth trajectory. Currently, 115 million homes in the U.S. need decarbonization, a process that, at the current rate, will take 200 years. The question remains: how do we streamline the electrification process? For many, the answer lies in software.
At Energize’s Sustainable Innovation Summit: Home Electrification in Denver on May 30, industry leaders gathered to discuss the "how" and "why" of home electrification. During five panel discussions, conversations delved into the problem of making this fragmented ecosystem work together. Here are the key takeaways.
One major hurdle in home electrification is the complexity of the customer journey. From navigating tax incentives and the permitting process to selecting contractors and managing installations, the process can be overwhelming and costly. This complexity is particularly challenging when most consumers replace systems upon failure and often opt for the quickest solution, which is usually a like-for-like replacement.
"What we're seeing now is a really nice problem in that we have an amazing number of incentives out there now from local governments, regional energy networks, the IRA funds, and within that, home energy rebates, tax credits, the Greenhouse Gas Reduction Fund. But of course, actually navigating all of that is super complex." – Aimee Bailey, Founder & CEO, Rock Rabbit
Software platforms play a crucial role in making financing decisions easier by aggregating incentive information and making it readable, searchable, and stackable. Logic-driven AI accelerates the permitting process, reducing wait times and helping homeowners understand their options better.
"The top of the project funnel has the problem of 'What am I allowed to do?' 'What am I required to do?’ ‘How is this going to impact me and my ROI?’ These are complex regulatory questions, and software solutions like instant regulatory analysis are essential to easing the permitting bottlenecks." – Leila Banijamali, Co-Founder & CEO, Symbium
The current landscape shows that installers often do not consider all components of home electrification—ranging from heat pumps to insulation to energy storage—as one cohesive project. Software solutions are increasingly stepping in to serve as virtual general contractors, bringing various aspects of home electrification under one roof and optimizing decisions across the variety of project variables.
"[So far], I don't see the installers thinking about the six pieces [of heat pumps, rooftop solar, home EV charging, battery storage, energy efficient appliances and weatherization/insulation] under the umbrella of home electrification […] but what we do see is more and more awareness and investment and I can only imagine that as that accelerates, people will start to think of [home electrification as] a broader umbrella into which these are the different pieces that fit together.” – Sudeep Deshpande, Vice President, Operations, Aurora Solar
With the right tools, installers can become the front lines of home electrification; however, the ever-changing incentive and technology landscape makes it impossible for these individuals to keep up with the industry. Software innovation is stepping up to equip installers with the quotes and technology recommendations necessary for a successful install.
"One of the problems that many of us are trying to solve is making sure that the phone number someone calls [for help with home electrification] has someone on the other end who can educate them about technology and costs, including rebates, financing, all of this stuff. It’s not reasonable to expect anyone to be able to do that without the proper software." – Jeff Coleman, Founder & CEO, Eli
Smart AI applications, like AI-driven modeling and rule-based permitting, allow installers to provide a better customer experience, offering informed package options in real-time.
"Where we are actually starting to apply AI [is by] making the modeling experience easier and faster, so that when the installer is sitting in front of the homeowner, they're not spending time creating a whole bunch of different scenarios and models, but rather engaging in a conversation and being able to show these scenarios and their outcomes." – Sudeep Deshpande, Vice President, Operations, Aurora Solar
Today, there is already a significant shortage of electrical installers, and according to current electrification projections, the gap is expected to expand. Software companies are working to close the labor gap in electrification by training and upskilling people in trades to meet demand. AI-based recruiting and gamified training opportunities can play significant roles in advancing the workforce.
"Our belief is that software can play a big role in helping to advance how people get into the trades, how existing tradespeople can thrive in their careers, and how to improve the worker experience so they stay longer." – Wyatt Smith, Founder, UpSmith
With more connectivity, data, and flexibility, software enables a more holistic view of home and grid electrical systems. This allows consumers, utilities, and policymakers to make stronger energy decisions. When rebate programs shift from per-device structures to power-saving schemas, they give consumers more control over their electrification choices.
"Who cares if it's a car or a thermostat or a heat pump? The kWs [kilowatts] are what matters, and the programs are re-consolidating into a kW basis rather than a device-type basis." – Casey Donahue, CEO, Optiwatt
Home electrification is essential in reducing residential energy use and combating climate change. While the industry faces significant challenges, software provides critical solutions that simplify the customer journey, enhance financing decisions, support installers, train the workforce, and enable a holistic view of energy systems. By leveraging these software solutions, the industry can overcome its current hurdles and accelerate the decarbonization of homes, paving the way for a sustainable future.
