Switching Older Homes to Natural Gas

Home buyers are well aware that energy prices are likely to rise in the long term. So real estate licensees who can talk about home energy use have an important tool in their toolkit. Space and water heating account for up to 60 percent of an average Northwest home�s energy usage and helping clients make informed decisions about how they use energy can translate into significantly lower utility bills. A home that offers a smart economical choice in the long term may be far more appealing.

When putting a home on the market, one choice a seller can make to increase the home value and appeal is to upgrade to natural gas, if the option is available. Likewise, buyers who may pass on a property because it has electric heating may reconsider if they understand their options for upgrading the home after it's purchased. Real estate licensees who have a good understanding of the options  which homes are good candidates for upgrading to natural gas, what the benefits are, who to talk to in order to make it happen and the financial resources that are available will be better positioned to help their clients sell a home, or make a home buying decision, especially in a slow economy.

Lower energy costs  the price of natural gas has continued to drop while other energy prices have gone up and new resources to help cover conversion and equipment costs are now available

Comfort Natural gas heating equipment makes for a more comfortable home. Natural gas furnaces deliver warmer air and heat up a home quickly. Natural gas water heaters can heat twice as fast as electric models.

Versatility  In addition to home heating, natural gas can be used for water heating, cooking, clothes drying, stand-by generators, barbecues, etc.

Better for the environment  Natural gas is more efficient than electricity and burns cleaner than any other fossil fuels.

Reliability Many natural gas appliances will operate during a power outage so homeowners can stay warm, have hot water and enjoy a hot meal

Your Power Company  A Surprise Resource for Home Energy Efficiency
Many utility companies now have conservation programs to encourage better use of resources. Local electric and natural gas provider Puget Sound Energy offers a wealth of services and rebate programs to help both its nearly 750,000 natural gas and 1 million electric customers power their homes more efficiently. The utility has become more conservation-minded than ever because by reducing the overall demand on its electric systems, it can avoid building expensive new power plants in the future (plants that would be paid for by ratepayers). Encouraging the use of natural gas over electricity from PSE helps the utility reduce demand for electricity by offering the more cost-effective, environmentally friendly and plentiful alternative in natural gas.

HOW DOES THE CONVERSION PROCESS WORK?
The easiest conversions are for water heaters, dryers, stoves and other electrical appliances in a home that already has natural gas heat.

If there's no current natural gas connection to the home, calling the local energy provider is the quickest, most reliable way to determine if natural gas service is available to an address, and the homeowner, potential buyer or agent can request that information. Using maps to find the nearest gas main and county records to make sure there are no easement issues or whether the placement of the house on the lot impacts the type of meter needed, PSE can provide a free availability and concrete check to estimate conversion costs. As a general rule, the more natural gas appliances that will be installed in the home, the lower the conversion costs.

Once availability is determined, PSE can guide customers through the process of getting a meter installed, selecting a contractor and equipment, and activating service.

FINANCIAL RESOURCES FOR CONVERSION COSTS
This is where a real estate licensee can be of real help to their clients. Generous-sized rebates for equipment and labor are available that can help greatly in the decision-making process. Many rebates go unclaimed simply because people don�t know about them.

• Utility rebates: Up to $3,950 is currently available in potential rebates from PSE for electric�to-gas conversion, and up to $450 for additional equipment (ENERGY STAR-rated natural gas furnace, water heater, tankless water heater).
• Tax credits: On top of that, homeowners may be able to claim up to $1,500 in tax credits through Federal stimulus funds. That adds up to nearly $6,000 potentially available to customers for equipment and labor.
• Monthly savings: Natural gas is cheaper, and efficient equipment uses less of it, lowering utility bills substantially.
• Financing: Low-interest loans are also available to cover any remaining balance.

With all these resources combined, some homeowners can expect a payback time of as little as 4 years for a more comfortable, appealing home.

WHAT ABOUT OIL-HEATED HOMES?
Since these homes are not currently being serviced by PSE, they will not be eligible specifically for the conversion rebate, but are eligible for up to $450 in equipment rebates.

The Seattle area has the highest number of homes using heating oil in the region. The top reasons for homeowners of an oil-heated home to consider switching to natural gas include:

• The cost of heating oil on an energy equivalent basis is about three times more than natural gas.
• Homes can reduce CO2 emissions by 41 percent if they switch from heating oil to natural gas.
• Environmentally, 40-year-old tanks have an 80 percent chance of leaking and could result in groundwater or soil contamination � leaving the homeowner with potential cleanup costs (Seattle requires underground heating oil tanks that are inactive for one year to be decommissioned).

WHAT DOES A TYPICAL CONVERSION COST?

Converting from Electricity to Natural Gas 2,000 square foot home
*Assumes converting central furnace and hot water heater

Converting from Oil to Natural Gas  2,000 square foot home
*Assumes converting central furnace and hot water heater

Helpful Resources
A key part of advising your customers on energy efficiency is being able to direct them to resources already in place for homeowners. Below is a recap of the resources noted in this article:

Puget Sound Energy  Converting to Natural Gas:
http://www.pse.com/solutions/foryourhome/Pages/
rebatesOnConvertingtoNaturalGas.aspx

PSE Customer Construction Services  call for natural gas availability check
1-888-321-7779, Monday - Friday, 7 a.m. - 5 p.m.

PSE Energy Advisors  call for rebate information and referrals to pre-qualified contractors
1-800-562-1482, Monday - Friday. 8 a.m. � 5 p.m.

Puget Sound Energy Energy Efficiency Rebates:
http://www.pse.com/solutions/foryourhome/Pages/
rebatesOnAllRebates.aspx

Energy Star  Federal Tax Credits for Energy Efficiency:
http://www.energystar.gov/index.cfm?c=tax_credits.tx_index

Internal Revenue Service  Overview of Energy Incentives for Homeowners via the American Recovery and Reinvestment Act:
http://www.irs.gov/newsroom/article/0,,id=206875,00.html

Liz Norton is the manager of Natural Gas Marketing and Development for Puget Sound Energy.