Illustration of beneficial electrification for the home

Beneficial Electrification: What Utility Customers Need to Know

Beneficial electrification has become a popular marketing theme among energy utilities and cooperatives in the last year, but the concept is still unfamiliar to many customers. Don’t let that get in the way of communicating this powerful message. The term may be a mouthful, but beneficial electrification can improve customers’ lives in a variety of ways.

What is beneficial electrification?

Beneficial electrification is the process of replacing the direct use of fossil fuels with electricity to reduce overall emissions and energy costs. When consumers switch to electricity — such as replacing a heating oil furnace with an electric heat pump or switching from a gasoline-powered car to an electric vehicle — they benefit through cost savings, convenience and a cleaner environment.

Beneficial electrification is more than fuel switching, however. Fuel switching is a short-term solution, where beneficial electrification (BEL) is a long-term approach to replacing fossil fuels. To do so, BEL must satisfy at least one of the following conditions without adversely affecting the others:

  1. Reduce energy costs
  2. Benefit the environment
  3. Improve consumer quality of life
  4. Increase grid resilience

BEL is most commonly applied to transportation, space heating, cooking and water heating. For utilities and co-ops, this is seen in marketing campaigns and programs around electric vehicles, electric lawnmowers, heat pumps, induction stovetops and other residential appliances, and commercial facility electrification such as process technologies, electric forklifts and other equipment.

How does beneficial electrification save money?

Beneficial electrification can help energy utility customers lower their energy bills. While BEL will typically result in higher electric bills, significant savings can be achieved elsewhere, such as customers’ vehicle fuel bills. “Reducing energy spend” may be a more accurate phrase to describe the overall financial benefits of BEL.

However, the cost of electricity itself is a barrier. For example, potential EV purchasers may have the perception that gas is cheaper, which is true in some cases. They need to get past the cost of gallon of gas (or a kilowatt hour) to see how electric vehicles are much more efficient than internal combustion engines overall, not to mention come with lower maintenance costs. EV owners will save about $1,000 per year on fuel, with total cost-of-ownership savings of up to $10,000 over the life of an EV.

Electrification improves the environment

Electricity gets cleaner every day, with more of the nation’s supply being generated from renewable sources. For example, carbon dioxide emissions per megawatt hour from electric power generation decreased 28% from 2005 to 2018. By driving the transition away from fossil fuels, beneficial electrification is having a major impact on the environment.

EVs are a great example of BEL. Electric vehicles have zero tailpipe emissions and reduce well-to-wheels emissions by at least 20%. Electric power generated by renewables adds to that advantage — ultimately up to 100% reduction in carbon emissions.

Customers may ask, does BEL require that 100% of their electricity come from clean energy sources? Not necessarily. New electric-powered equipment and appliances are much more energy-efficient than the devices they replace. Heat pump efficiency has risen from 10 SEER to close to 20 SEER (500% efficient!) for cooling and from 6 HSPF to 10 FSPF (250% efficient!) for heating in a couple of decades. Natural gas furnaces are 92% efficient. In the short term, the consumer is reducing their overall energy use by upgrading to a new electric appliance; in the long term, that electricity will come from increasingly green sources.

Barriers to electrification

There are a few barriers to beneficial electrification for residential and business customers, including:

  • The low cost of natural gas
  • Range anxiety for electric vehicles
  • Increased capital cost for electric equipment
  • Lack of customer awareness of alternative electric technologies
  • Lack of trained installers and repair technicians for advanced technologies like variable-refrigerant flow HVAC and heat pump water heaters
  • Misconceptions that electric forklifts are underpowered and batteries cannot last a full shift
  • Safety concerns for electric lift trucks in wet weather conditions

Despite these hurdles, beneficial electrification can save customers money, reduce emissions and improve quality of life, all without negatively impacting the grid. With these major benefits in mind, it’s clear that customers are going to become more interested in BEL options and will look to their utility as a resource in better managing their energy use.

How do you communicate the benefits of electrification to customers? Learn how to power your campaigns with a Content Marketing Strategy from Questline Digital.