Electrification in New York: Get the Facts
New York is Electrifying the Empire State. What Every Consumer Needs to Know.
The commitment New York has made to reduce greenhouse gas emissions takes great strides toward protecting our environment. But there are questions that many residents have about how these proposals will affect them as renters, homeowners, and often, as small business owners. The cost and feasibility of some of the recommendations made by New York Climate Action Council remain unknown.
Maintain safe, reliable, and resilient energy infrastructure.
Communicate impacts on energy consumers and businesses.
Reduce emissions from all sectors, including transportation and heating.
History
On February 1, 2023, Governor Kathy Hochul released her Executive Budget proposal which included legislation to prohibit the installation of fossil fuel equipment and systems in new and existing homes and buildings throughout New York State, among other requirements.
The final State Budget was approved in early May 2023 with an electrification mandate for new construction only.
New Statewide All-Electric Construction Law
The final State Budget directs New York State’s Fire Prevention and Building Code Council to prohibit the installation of fossil fuel equipment and building systems in any new building 7 stories or less by December 31, 2025 (commercial and industrial buildings greater than 100,000 square feet would be exempt until December 31, 2028).
The prohibition on fossil fuel equipment and building systems would apply to all new buildings beginning December 31, 2028.
To read the full text of the new law (Part RR of A.3006-C/S.4006-C), click here.
Background on New York State’s Climate Plan
In July 2019, New York State passed the Climate Leadership and Community Protection Act—a landmark piece of legislation that will require the state to reduce economy-wide greenhouse gas emissions 40% by 2030 and no less than 85% by 2050 from 1990 levels. The Climate Action Council was also created under this law with an important task: creating recommendations for how New York State will achieve these goals.
The Climate Action Council approved its final plan on December 19, 2022. Now many of the recommended actions must be approved by the State Legislature and various regulatory agencies (i.e. – Department of Environmental Conservation, Public Service Commission, etc.)
To learn more about New York State’s climate plan and the Climate Leadership & Community Protection Act, click on the links below:
Climate Proposals
Taking a closer look at the costs to comply with these proposals is essential as they will vary depending on if changes are made through retrofitting existing properties or in new construction:
- In single family homes, owners may expect to pay anywhere from $17,400 to $31,700 to retrofit a typical, existing gas-powered dwelling in New York. This estimate includes an air source heat pump, water heater, cooktop range, clothes dryer, and electrical modifications.
- When considering new construction of homes, the total costs for electrification in this state are estimated to range from $12,000 to $23,000—this total accounts for an air source heat pump, full range of appliances, labor, and infrastructure necessities.
The owners of multi-family properties and commercial spaces will also be affected by the New York Climate Council’s proposals:
- Small multi-family buildings may be retrofitted with an air or water source heat pump at costs ranging from $13,000 to $30,100 per unit. Retrofit costs for a ground source heat pump range from $29,600 to $42,900 per unit.
- For large multi-family buildings—such as apartment and condominium buildings in Downstate New York, overall costs to retrofit range from $19,400 to $42,900 per unit with an air or water source heat pump, and from $40,800 to $56,000 per unit with a ground source heat pump.
- Costs to retrofit commercial spaces are calculated by the square foot. A typical gas-powered office building would range from $12 to $21 per square foot for buildings with air source heat pumps whereas the overall cost to retrofit using a ground source heat pump is much more expensive—ranging $17 to $24 per square foot.
There are also ongoing financial considerations that should be examined. For example, the upfront costs of upgrading through electrification must be weighed against the savings that property owners may realize over time.
- In single family homes, owners may expect to see average annual energy bills increase by $570. Although research is limited, it is possible that electrification could generate a cost savings for single family homes that use fuels other than gas, such as heating oil or propane.
- While office spaces and multi-family buildings will face significant up-front costs to pursue electrification efforts, there is evidence that they may experience an overall savings in annual energy bills.
Costs
New York State is leading the way with some of the most progressive environmental proposals in the country. The real question is: What will they mean in terms of costs to homeowners, renters, co-ops, and businesses?
Some Measures Recommended by the Climate Action Council:
- Beginning January 1, 2025, any new residential construction in New York State having three stories or less, will be required to be “all electric” with limited exceptions. A similar requirement for all buildings, residential and commercial, 4 stories or more will begin January 1, 2028.
- Proposals call for transitioning existing homes and businesses from natural gas and oil heating systems to electric or geothermal heating systems, starting in the year 2030.
- Starting in 2030, homeowners will only be permitted replace a gas furnace, water heater, or oil furnace with an electric one. This change would take effect for larger residential and commercial buildings starting in 2035.
- A proposal that will ban new natural gas hookups or oil service for single family homes and residential buildings beginning in 2025.
- Both residential and commercial buildings will be required to replace their existing natural gas appliances with electric appliances when they stop working, starting in 2035.
- The sale of gas appliances in New York State, such as gas stove tops, ovens, and clothes dryers will be eliminated by the 2035.
- Ban the sale of gasoline vehicles in New York in 2035.
- Require single and multifamily property owners to obtain and disclose prior year energy consumption and energy performance ratings in real estate listings.
Click here to access the full New York Building Electrification Cost Report from June 22, 2022
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The New York State Association of REALTORS® is a not-for-profit trade organization representing more than 59,000 of New York State’s real estate professionals. The term REALTOR® is a registered trademark, which identifies real estate professionals who subscribe to a strict code of ethics as members of the National Association of REALTORS®. These REALTORS® are also members of the New York State Association of REALTORS® as well as their local board or association of REALTORS®.