[zbrozek]

My baseline electricity rate is $0.29/kWh and my baseline gas rate converts to about $0.06/kWh. Weighted for best-case efficiency that makes the the heat pump water heater 18% more expensive to run than the gas heater. Adding cognitive burden to carefully engineer the water heater's behavior and training my family to change their showering habits to leverage TOU just to maybe-break-even is a bad proposition. Plus, extrapolating the last ten years of rates, I expect electric rates will rise faster than gas rates and make the value proposition worse over time.

Edit: And of course that ignores that I have the condensing gas heater and I don't have the heat pump, so there's capex to cover as well.

[danans]

It all depends on the efficiency of your existing water heater, and your local electric rates.

I pay the same electric rates as you - $.29/kWh (PG&E). For my family of 4 using 1.024MBTU/month of heat for water, the amount of electricity consumed by the heat pump hot water heater is about 100kWh/month, which works out to or $348/year.

Furthermore, in my area, I have access to a municipal utility program that will pay me $60/year to automatically run my heat pump water heater when renewables are in over-supply, thereby functioning as a kind of capacitor for intermittent renewable supply on the grid, and lowering my water heating electricity cost to around $.25/kWh.

With my previous standard gas water heater (efficiency 65%), I was using 20 therms per month for water heating. At my current local natural gas prices of $2/therm, that would have been $480/year for hot water heating if I kept that equipment. With a condensing natural gas unit at 96% efficiency it would cost $250/year, $90/year less than the heat pump - not a huge difference.

Remember that there are a lot of old standard gas water heaters out there that are only 50-65% efficient. A heat pump water heater is very competitive to replace those.

Natural gas prices also aren't going down, and are far more subject to geo-political supply shocks, as we've seen recently, resulting in winter natural gas rates recently going as high as $2.25/therm. That's a far greater jump than electricity rates vs last year. In places like the Pacific Northwest, or Sacramento CA with clean hydro power, electricity rates are $.09 to $.18/kWh haven't budged much at all. Heat pump water heaters are even better in places like that.

Heat pump water heaters also have the ancillary benefit over natural gas of removing a major source of combustion from within your home/garage, which is better for air quality, and also removes a source of depressurization of your house's air if the water heater is contained within conditioned space.

[zbrozek]

Oh for sure there's tons of benefits if it can be made to make sense. I'm going to get one as my solar and battery capacity grow. But right now it's unimaginable to do so in PG&E territory where electricity prices rise 4-5x faster than inflation. I'd rather roll the dice on geopolitics for gas pricing.

See slide 16, which already looks quaint just a year or two later. https://autl.assembly.ca.gov/sites/autl.assembly.ca.gov/file...

[danans]

> See slide 16, which already looks quaint just a year or two later.

That's nothing.

PG&E's natural gas rates have gone up 400% since 2008 (inflation since that time has been about 30%): https://www.pge.com/tariffs/Residential.pdf

The huge jump happened in 2016, and it's stayed high since. The jump reflected increase in natural gas prices and also costs for PG&Es San Bruno pipeline explosion and the resulting higher cost of maintenance of natural gas infrastructure. It was a clear demonstration of the hidden liabilities in old natural gas distribution infrastructure.

It's interesting to note how PG&E's stock price also fared from 2016: https://www.google.com/search?q=pge+stock+price&oq=pge+stock...

which also is when they stopped paying a dividend: https://www.streetinsider.com/dividend_history.php?q=pcg

[zbrozek]

So we've paid the cost of the gas line upgrade but the cost of the electric upgrade to mitigate the fire risk is still incoming. Therefore we should expect a price shock on electricity in PG&E territory above-and-beyond the large-but-steady increases over the last eight years. And so the yawning gap will get even larger. :(

This is a shame because I strongly prefer electric everything, but not enough to make uneconomic decisions.

[danans]

> So we've paid the cost of the gas line upgrade but the cost of the electric upgrade to mitigate the fire risk is still incoming.

I don't believe we've paid anywhere near the full cost of upgrading/maintaining the gas infrastructure yet. It continues to age and will require ongoing and increasing maintenance - and expensive maintenance since lines are buried.

Furthermore as more customers switch away from natural gas, the remaining customers rates will rise to pay for the infrastructure maintenance as this paper from the Haas School of Business describes [1]:

"As Figure 4 shows, this percentage rise in bills is small when only a few customers exit the natural gas sector, but bills rise substantially if many customers exit. To understand why this relationship is non-linear, imagine that all customers but one exit, and that remaining customer must cover all of the utility’s legacy costs."

You're right that we will likely pay higher costs for electric infrastructure upgrades also - or alternatively experience more fire-avoidance PSPS events, or a bit of both.

But electricity as a medium for delivering energy offers more technological opportunities for addressing these issues and the very pressing issue of decarbonization than natural gas does going forward. Batteries and municipal microgrids are some of technologies that can help with this going forward.

1. https://haas.berkeley.edu/wp-content/uploads/WP317.pdf

[zbrozek]

My own plan is to keep growing my solar and battery array until I'm self sufficient. I'll be electrifying as the additional load doesn't generate revenue for PG&E. I expect the last-customer-standing problem you bring up for gas is (to a lesser extent) going to happen for electricity as well.