Chicago Puts $15 Million Into Induction Stove & Heat Pump Retrofits

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Chicago is a “woke” city, which means it cares about social justice and the ability of all its citizens to lower the amount of carbon dioxide that results from their daily activities. On July 20, 2023, Mayor Brandon Johnson announced a request for proposals to select providers for the city’s Residential Decarbonization and Retrofit Program.

That program will advance the equitable decarbonization of Chicago’s one- to four-unit residential buildings by providing low and moderate income homeowners with a number of home upgrades including new insulation, heat pumps, induction stoves, heat pump water heaters, heat pump clothes dryers, air sealing around doors and windows, smart thermostats, and other energy saving measures. The program will address Chicago’s critical need for

• Reducing the city’s overall emissions
• Providing immediate benefits to low and moderate income families by improved indoor air quality, increased cost savings, and lower utility bills
• Creating increased demand for local contractors with the skills and experience to install cutting edge, energy efficient equipment while enhancing pathways for Black, Indigenous, and People of Color (BIPOC) workers and business owners to meaningfully participate in the clean energy economy.

Just The Beginning

“This $15 million dollar investment is just the beginning of our commitment to implementing a just energy transition for residents and workers in our City, particularly those hit first and worst by climate change,” said Mayor Johnson. “The Residential Decarbonization and Retrofit Program will catalyze our efforts to provide critical solutions for residents on the front lines of the climate crisis as we take a leadership role citywide in reducing our dependence on fossil fuels.”

The mayor also said in a statement that the $15 million investment by the city of Chicago “is just the beginning of our commitment to implementing a just energy transition for residents and workers in our city, particularly those hit first and worst by climate change.” The program is designed to help the city meet its 2022 Climate Action Plan goal of reducing citywide carbon emissions by 62% by 2040.

“With this RFP, the Johnson administration is showing their priorities are in the right place when it comes to tackling environmental justice and the problems of energy burden,” said Sarah Moskowitz, executive director of the Illinois Citizens Utility Board. “We already had a good feeling about the mayor and everything he’s said about building electrification and the need for healthier and more affordable energy in our homes. This underlines it.”

Up To 350 Chicago Apartments

According to the Energy News Network, the initiative is expected to fund upgrades for 200 to 350 households at no cost to them by 2025, with the funding coming from the Chicago Recovery Plan, a collection of bond funds created to address the economic impact of the Covid pandemic. The work will be carried out by one or more third party providers chosen through the request for proposals, and the initiative will be implemented by the city’s Department of Housing.

The request for proposals notes that investment will be prioritized in South and West side neighborhoods where residents bear the heaviest energy burden, according to an analysis by the organization Greenlink. Those neighborhoods are also disproportionately people of color and facing the highest levels of housing insecurity, exacerbated by the pandemic, the RFP notes.

An ordinance proposed in Chicago would ban gas heating and cooking in new construction, but even without such mandates, new homes are increasingly being built with electrification in the Chicago area. Initiatives like the one outlined in the request for proposals are crucial to helping lower income people electrify since they are less likely to live in new buildings.

“Residents who rent, are older, or have lower incomes are more likely to live in older buildings with poor insulation, high utility costs, and with less control over indoor air quality and temperature,” the RFP says.

“Small multi-unit buildings are traditionally a really tough nut to crack,” said Moskowitz. “Oftentimes the inhabitants aren’t necessarily high-income but they may not qualify for other programs” for low income residents. “This framing of the issue points to a gap. We’re excited to see the potential and what some of the responders come up with.”

Renters in such multi-unit buildings are also more vulnerable to outdated energy sources and poor energy efficiency, since those are the responsibility of landlords. Moskowitz said she hopes the latest initiative and other programs can help address this “split incentive,” where landlords may be unlikely to invest in energy efficiency if they don’t benefit from the energy savings.

Gas Customers Face Major Price Hike

Advocates say residential electrification is especially important in Chicago now since Peoples Gas, the local methane gas supplier, has requested record rate increases to fund upgrades in its system. It is requesting a $402 million increase in a proposal currently before the Illinois Commerce Commission. If granted, the burden of the rate increase would fall disproportionately on lower income families. As part of the rate case, advocates are demanding investment in energy efficiency and electrification in part to help mitigate racial disparity in the utility’s record of utility disconnections.

Moskowitz said that if wealthier people can afford to invest in heat pumps and electric stoves, there’s a danger lower income people will be “left behind” in the gas system and end up paying an even larger portion of gas infrastructure costs.

“We need to do this across the board lest we end up in a situation with a small number of gas customers shouldering the cost for the entire system,” she said. “That’s a piece a lot of folks don’t get. This transition is happening, and it’s happening in an uncontrolled way that can leave swaths of the population behind.”

Retrofits Based On NREL Study

The new decarbonization initiative was modeled on responses to a February 2023 request for information from organizations including the National Renewable Energy Laboratory and the Midwest Energy Efficiency Alliance. Last year, former mayor Lori Lightfoot convened a building decarbonization working group that released recommendations incorporated into the new initiative. The working group’s report described the recommendations as “aggressive and actionable in a time where the funding and resources are coming online at the federal, state, and local levels to drive real change in communities.”

The working group’s 2022 recommendations include banning gas hookups in new construction and major renovations, as the proposed ordinance demands, and charging a “fossil fuel mitigation fee” for new construction built during a phase-in period for the ban. The recommendations also call for a pilot project promoting heat pumps, and targeting underserved communities with electrification and energy efficiency projects.

Community outreach will also be crucial to make sure people are aware of opportunities that exist and to overcome any reluctance about changing to new technologies. “There’s definitely a big education piece that’s required,” Moskovitz said.

The Tide Is Turning

A spokesperson for the Citizens Utility Board said, “We’ve been surprised at the level of interest we’re hearing from the public about going all electric. The discourse has shifted much more quickly on that than I was expecting. We’re getting inquiries on a regular basis to our office from people who are curious about what their first steps would be if they want to get fossil gas out of their home.”