Electrification

Overview

Electrification is the replacement of fossil fuels with electricity to power appliances, equipment, and vehicles. Electric technologies are more efficient than their fossil fuel counterparts. For example, electric heat pumps are three to five times more energy efficient than natural gas boilers. Switching to heat pumps for heating and air conditioning would save the median household $300–$650 in annual energy costs.

About 40% of U.S. electricity is already generated from low- or no-carbon sources like renewables and nuclear energy. As more renewable energy comes on line, electricity generation will release fewer greenhouse gas emissions, making electrification increasingly better for the environment. The full electrification of the U.S. transportation, commercial, and residential sectors would double electricity sales by 2050, but reduce greenhouse gas emissions by 74% below 2005 levels.

Clickable Table of Contents:

Transportation Electrification

Globally, almost a quarter of new light-duty vehicles sold in the first half of 2025 were electric vehicles (EVs). In the United States, carmakers sold 1.5 million EVs in 2025, representing about 9% of total new vehicles sold that year. More automakers are entering the EV market with each passing year. Heavy-duty vehicles are also being electrified, as are specialized agricultural and industrial vehicles. The One Big Beautiful Bill Act (P.L. 119-21) repealed the EV tax incentives from the Inflation Reduction Act (P.L. 117-169) and the battery charger grants from the Infrastructure Investment and Jobs Act (P.L. 117-58). These repeals have caused EV sales to fall in the United States.

EVs are quiet, smooth to drive, and half as expensive to run as an internal combustion engine car. Electric engines also have fewer moving parts, which results in operations and maintenance savings that reduce vehicle downtime and help lower the total cost of ownership. An all-electric vehicle releases 4.9 times fewer greenhouse gas emissions than a gasoline car, on average. EVs require a robust charging network, which the United States is still in the process of building out. While EVs have many benefits, their battery manufacturing requires critical minerals, which, depending on their sources, can present supply chain issues, human rights concerns, and environmental risks.

Read more: Transportation | Critical Minerals

Residential Building Electrification

More than half of the energy used in a typical home goes toward space conditioning. About 70 million households in the United States are using natural gas, propane, or wood as their main source of space heating. Another 25 million are using inefficient electric resistance to heat their homes. About 88% of U.S. homes use air conditioning, which represents 9% of home energy use. Switching these households to high-efficiency electric heat pumps, which can both heat and cool homes, would reduce energy costs, avoid the indoor air pollution associated with burning fuels, and lower greenhouse gas emissions. Heat pump technology can also be used for water heating, which consumes about 18% of the energy used by an average home. Heat pump water heaters can be two to three times more efficient than conventional electric water heaters.

Heat pumps use a small amount of electricity to transfer thermal energy from outdoors to indoors (or vice-versa), making them highly energy-efficient when compared to electric resistance heaters and gas furnaces. Because thermal energy is being transferred, heat pumps can be used to both heat and cool a home. This means that one heat pump can effectively do the work of two systems.

Heat pump technology has advanced significantly, with 2023 minimum-standard heat pumps (14 SEER) being at least 30% more energy efficient than minimum-standard 2005 pumps (10 SEER). Later in 2023, the minimum standard was upgraded to 14.3 SEER2 (equivalent to the old 15 SEER), which is even more efficient. Some heat pumps no longer require ducts, giving homeowners more flexibility when making installations.

Geothermal ground-source heat pumps transfer heat to and from the earth instead of the outside air. Underground temperatures, even at shallow depths, are very constant and so perfect for year-round heat transfers. In addition to providing cost benefits, geothermal heat pumps also have a longer lifespan than gas furnaces (24 years versus 15 years).

The electric stove was invented in 1892 but new induction technology surpasses both gas and old electric technologies as the best way to cook. Induction ranges use coils of copper wire to generate electromagnetic waves that directly heat magnetized cookware. By directly transferring energy, induction reduces thermal loss, cooks food faster, and adjusts pan temperatures quickly compared to gas or older electric technologies. In addition, induction and other electric heating methods also avoid harmful emissions that occur when cooking with gas, which can lead to various health problems, including exacerbating respiratory diseases and asthma.

Read more: Heat Pumps | Induction Cooking

Commercial Building Electrification

Modern electrification technologies provide cost-effective alternatives for upgrading and replacing boilers, direct water heating systems, and central chillers in a wide range of commercial settings. A 2020 report found that replacing fossil-fuel-powered equipment with electric equipment can lead to reductions in greenhouse gas emissions from commercial buildings of up to 44%. With currently available technologies, the electrification of commercial space heating alone would reduce greenhouse gas emissions by 36 million metric tons of CO2, equivalent to removing 8.4 million cars from the road for a year.

An electric heating and cooling technology that holds particular promise for commercial facilities is the variable refrigerant flow (VRF) heat pump. Such heat pumps can serve more rooms with a single system, making them an ideal fit for many commercial customers. The temperature in each zone can be adjusted independently, to take into account preferences, usage, and occupancy. Ductless VRF heat pumps are suitable for retrofits in buildings that do not have ducting, such as historic properties.

Industrial Electrification

Industrial operations accounted for 33% of total U.S. energy consumption in 2025. Approximately 78% of the energy used in the United States for industrial processes (such as mining, food processing, and making plastics, cars, paper, iron, steel, and cement) is derived from burning fossil fuels directly to generate energy. Only 9% comes from renewable energy generated exclusively for industrial facilities, and 13% comes from grid electricity (which also largely comes from fossil fuels).

Industrial processes often require extreme temperatures, both hot and cold, which necessitate high energy consumption. Though high temperatures are often achieved with fossil-fuel-based technology, about half of industrial fuel consumption could be replaced by electricity.

Manufacturing steel, for example, is traditionally done using a gas- or coke-fired blast furnace to achieve the rapid high heat necessary to harden steel, and this process produces substantial carbon emissions. New manufacturing methods, such as using molten oxide electrolysis to reduce and melt iron ore with electricity, could be viable solutions.

Induction heating—using the same principles as induction cooking —is used in several automobile manufacturing processes, including annealing steel sheets, gear and camshaft hardening, and brazing operations. Induction heating is also used in the production of electric motors, particularly to wind the copper coils that generate motion from electricity. The use of induction heating reduces the cost and time required for assembly and can improve the manufacturer’s precision.

Switching to industrial electric vehicles is a relatively easy way to electrify, and would immediately have health benefits. In many industries, diesel engines are commonly used to power vehicles like forklifts, gantries, drills, and excavators. But they release carbon and other particles that are harmful to the planet and the workers operating them. Electric alternatives would eliminate on-site emissions completely, greatly improving worker health. Electric forklifts, in particular, have many benefits compared to their diesel counterparts, including lower total cost of ownership, reduced air and noise pollution, and less time lost to maintenance. Additionally, electric motors produce far less waste heat energy than internal combustion engines, reducing the sweltering temperatures of pit mines and other enclosed sites.

Agricultural Electrification

Electric technologies can be applied to nearly all aspects of modern farming and ranching, including transportation, irrigation systems, crop drying, space and water heating, milking, and pasteurization. Tractors account for the greatest share of potential electrification opportunities on farms. Options for smaller electric tractors (up to 70 horsepower) are growing each year as companies like Solectrac, John Deere and Monarch Tractor bring new electric models to market. Even though the upfront costs of electric tractors are higher than for similarly-sized diesel models, electric tractors have fewer maintenance costs and lower annual fuel costs, especially in areas with high diesel fuel costs. Switching tractor operations from liquid fossil fuels to electricity can save farms more than $7,000 annually in fuel costs per tractor.

Electric irrigation is a cost-effective, waste-reducing, and reliable method to bring water to crops. Electric pumps are quieter, more efficient, and can be powered with on-site solar energy—avoiding the need to get diesel to the fields. Electric irrigation can also be operated with smarter control systems like variable rate irrigation, which uses advanced software and satellite positioning to plan and manage irrigation efficiently. In addition, electric pumps can be controlled remotely, which makes it easier for farmers to monitor and manage their irrigation systems. Replacing diesel irrigation pumps with electric ones can lighten maintenance schedules, reducing operating costs.

Electrifying space conditioning and water heating technologies for greenhouses, broiler chicken operations, and dairy, poultry and swine farms can lead to significant energy savings, increased worker safety, and reduced carbon emissions. For example, using in-floor electric hydronic heating to eliminate combustion inside poultry and swine barns can significantly reduce the risk of carbon monoxide poisoning associated with traditional propane heaters, which is a win for poultry workers and chickens. Electric water heaters are a cost-effective choice for many dairy operations, which rely on consistent hot water to ensure hygienic operations and milk pasteurization. Electric heaters have lower operating costs than fossil-fuel-fired heaters and can be installed directly where heat is required, eliminating the need for extra steam or hot oil pipes.

The dairy industry is also beginning to electrify its pasteurization process. Instead of the traditional method of heating the product (typically with fossil fuels) to kill harmful bacteria, dairy processors are increasingly using ultraviolet light to pasteurize without the use of heat. This process consumes 90% less energy than other types of pasteurization while still eliminating the same number of pathogens. UV pasteurization can also be used for juices, beers, wines, and other opaque liquids.

Climate Solution: Beneficial Electrification

Beneficial electrification is electrification that saves consumers money, reduces emissions, improves quality of life, or fosters a more resilient grid—without being detrimental to any of those four goals. The goal of beneficial electrification is to strategically target the most practical and valuable fuel-switching opportunities given current technology, electricity fuel mixes, and energy costs. Beneficial electrification can open doors for more measures, like combining distributed energy resources (such as rooftop solar and battery storage) with electric appliances and equipment (such as induction stoves and heat pumps). This can lead to increased building and grid resilience by making buildings less vulnerable to power outages due to extreme weather events.

Conventional wisdom suggests that on-site fossil fuel use is more efficient than electricity use, because so much energy is lost during the generation, conversion and transmission of electricity. However, several changes are converging to make the increased electrification of various sectors an increasingly appealing option from both a cost-reduction and environmental perspective. These changes include: