Home electrification projects, such as installing rooftop solar and battery storage, are currently affordable for only one in 10 U.S. households. But if they’re more widely accessible, new research suggests, home energy upgrades have the potential to unlock cost savings — as well as significant capacity as record load growth pushes the grid to its limits.
Rewiring America, a nonprofit that advocates for home electrification, found that six key policy changes could deliver an average of $26,000 in lifetime savings per home.
The policies include:
- Simplifying permitting, inspection, and interconnection processes, the “soft costs” that together account for more than half the price of installing residential solar and storage in the U.S.
- Requiring data centers to fund a portion of their capacity needs through distributed energy resources.
- Enabling utilities to pay for the upfront cost of home energy upgrades and recover them over time through bill savings over time, which expands access to low-cost capital.
- Requiring gas utilities to invest in home electrification and energy efficiency.
“Households have been seen as the end-of-the-line consumer — a passive recipient of all the decisions that are being made upstream — that just have to pay their bills on time,” said Ari Matusiak, co-founder, president and CEO of Rewiring America. “Instead, let’s shift that frame and start thinking about households as energy infrastructure. That opens up a much broader set of solutions that can drive a win-win-win for businesses that need power, utilities, and ratepayers.”
The report, which was shared exclusively with Latitude Media, lands as utilities have requested to spend more than $1.4 trillion through 2030 to expand energy infrastructure to meet record power demand from data centers, manufacturing plants, and electrification. If approved by state regulators, much of those costs will be passed on to ratepayers. Electricity and natural gas prices are already about 5% higher than last year.
Rewiring America presents DERs as an alternative and encourages policymakers to make it more affordable to install solar panels, battery storage, and heat pumps. Those technologies turn households into grid assets that, in some cases, avoid the need to build new distribution lines or substations — and can save customers money over time through lower energy bills.
The hyperscaler variable
Rewiring America published a separate report last year that found household energy upgrades could meet 100% of near-term data center demand growth, or at least 93 gigawatts by 2029. If hyperscalers paid for some of the costs, it could save households $9,400 on average, the group found in its report published today.
In March, seven of the largest tech companies — Amazon, Google, Meta, Microsoft, OpenAI, Oracle, and xAI — signed the White House’s ratepayer protection pledge to pay for their own energy and infrastructure costs. That pledge had no binding mechanism, but certain state legislatures already have or are considering similar requirements, and some are including investments in home energy upgrades as part of the “bring your own” momentum.
Minnesota enacted a law in 2025 requiring data centers to pay annual fees of $2 million to $5 million to support home-efficiency upgrades for low-income households; Illinois and Washington are currently considering similar legislation.
A New York legislator has also introduced a bill that would explicitly require data center companies to fund residential energy upgrades, including rooftop solar, battery storage, and heat pumps.
Getting soft costs down
Beyond making hyperscalers pay, Rewiring America recommended that states address one of the largest hurdles to home electrification: the expensive, time-consuming permitting, inspection, and interconnection processes. By adopting automated permitting for residential solar and storage, capping fees across localities, and allowing third parties rather than government officials to conduct inspections, states could save households an average of $9,300 over the lifetime of their energy assets, the researchers found.
“Traditionally, redder states have led the way in reducing this red tape,” Noah Goldmann, senior policy analyst at Rewiring America, said. “Within the last few years, states like New Jersey, Virginia and Minnesota have hopped on this train to bring down costs.”
Goldmann noted that this policy change is even more crucial now that federal tax credits for home electrification were eliminated by the GOP’s One Big Beautiful Bill.
Rewiring America modeled the upfront and operating costs of whole-home electrification across 68 million “eligible” homes, defined as all single-family households except those with heat pumps already installed or without heating. Heat pump installation is one of the biggest opportunities for savings and load flexibility, the nonprofit said, because space heating and cooling are typically the largest sources of household energy use. Home battery adoption remains relatively limited nationally, and many existing rooftop solar systems don’t support whole-home electrification, so neither meaningfully affected the size of the eligible household pool.
The nonprofit determined whether whole-home electrification was “affordable” by evaluating whether homeowners could replace existing heating, cooling, and cooking appliances with high-efficiency ones at either the same or lower total cost — for example, by installing an electric water heater instead of a gas one.
Rewiring America said that virtually 100% of households would see lower energy bills from electrification combined with solar and storage, but the upfront “soft” costs of those upgrades are often the biggest barrier to making it affordable.
“A major finding of the report is that today’s system does not properly account for the value these resources provide,” the group said. “Rooftop solar and batteries can reduce peak demand, improve reliability, and lower overall system costs, but households currently shoulder most of the investment burden while utilities and the broader grid capture much of the value.”
