Neighborhood-Scale Building Decarbonization

Neighborhood-scale building decarbonization (“neighborhood decarbonization”) is an emerging strategy that focuses on transitioning street segments, developments, or even entire neighborhoods to decarbonized energy sources and electric appliances with the end goal of managing the transition off of the gas system.

The current market approach to building decarbonization—an “appliance-by-appliance” or “house-by-house” approach—primarily relies on a mosaic of individual consumers, incentives, technologies, codes, contractors, utilities, and uneven access to capital.

The image below represents this unmanaged transition off of the gas system and names only a fraction of the people and resources involved in even a single home’s electrification. In reality, this list is 10 times as long with an even longer list of potential pain points. With approximately 110 million buildings in the U.S. (90% of which are residential), this unmanaged transition quickly becomes unmanageable.

• Is not scalable
• Does not offer a clear path forward for gas utilities and their workers
• Perpetuates inequity: only homeowners with financial means can afford to electrify all of their appliances without assistance, and renters cannot make decisions about their home’s appliances
• Creates a negative feedback loop in which those left on the gas system the longest are the least able to pay the increasing rates

Neighborhood decarbonization coordinates these actors and resources to reduce the total cost of the transition, create savings for ratepayers, ensure continued energy reliability and safety, and encourage equitable distribution of clean energy benefits.

Decarbonizing the built environment block by block, neighborhood by neighborhood, and town by town makes possible a more comprehensive and equitable strategy for meeting our climate goals. 

There are two primary pathways for achieving neighborhood decarbonization: the Electric Network and the Thermal Energy Network.

These pathways can apply to both new construction and existing buildings and should be paired with weatherization and energy efficiency measures to reduce energy needs and costs.

Pathway 1: The Electric Network

This pathway pairs electric appliances with the existing electric grid and utilizes four major appliances: heat pump water heater, air-, ground-, or water- source heat pump for space heating and cooling, induction or electric resistance range for cooking, and heat pump or electric clothes dryer. As states achieve increasingly ambitious renewable energy targets, electricity becomes less carbon-intensive and more renewable.

Pathway 2: The Thermal Energy Network (TEN)

This pathway distributes thermal energy across linked buildings via pipes filled with water, or other liquid solution. Buildings connect to the pipes through ground-source heat pumps for space heating and cooling, water heating, and clothes drying and an induction or electric resistance range for cooking. 

There are many different configurations of thermal energy networks, including district energy systems and networked geothermal. These networks have been in use for years at college campuses, housing developments, and other private or single-owner properties. Thermal energy networks can also be owned and operated by an existing regulated utility or a municipal government.

This approach to neighborhood decarbonization has the added benefit of reducing demands on the electric grid due to its increased efficiency. It also offers an opportunity to continue employing the existing gas workforce, which has many of the skills needed to construct and maintain thermal energy networks. 

Within these two primary pathways, there are many variations on how energy is stored, distributed, and used that we designate as “Networked Innovations.” These innovations may include microgrids, on-site renewable energy, backup storage, etc., and would pair with the existing electric grid and/or thermal energy networks.