Step 2: Electric Water Heating and Energy Efficient Appliances

By Mark Adams


This is the second blog in the series on the stairway to Net Zero housing. Net Zero houses produce more energy than they consume. Most homes, regardless of their age, can be upgraded to become Net Zero. But even taking just a few of these steps will enable homeowners to reduce their carbon output as well as save on their monthly utility bills.




This blog focuses on the available technologies for hot water heating and major appliances that are both powered by electricity and energy efficient. By replacing hot water heaters and appliances that rely on burning fossil fuels, you can make an immediate impact. 46% of the electricity from Marblehead Light that powers electric water heaters and appliances comes from non-carbon sources (wind, solar and nuclear). And the Marblehead grid is getting greener every year.



Hot water options

  1. Electric resistance water heaters are the most conventional solution to heating water without directly burning fossil fuels and their installation cost is typically lower than the other options. However, they require more electricity to keep the water in the tank at an optimal temperature which results in a high operating cost. Their life expectancy is about 8 to 12 years.

  2. On-demand water heaters are 20 to 30% more efficient than tank-based water heaters. They only operate when needed to provide hot water. They utilize electric resistance as their heat source and can last 15 to 20 years. Since their capacity is limited, high-demand households may need a second unit or a backup water heater to service multiple showers and dishwasher running simultaneously.

  3. Heat pump water heaters are by far the most energy-efficient systems. They collect heat from the surrounding air which is then transferred into a water tank to heat the water. Electricity powers the transfer but is not needed to generate the heat. In extreme demand situations, there is a backup of electric resistance heated water. They typically last 13 to 15 years.

Replacing a hot water heater must be done by a plumber that specializes in their installation. When choosing a plumber, be sure that they are capable of installing the hot water heating option that you prefer.


Energy efficient electric appliances

Replacing stoves and clothes driers that burn fossil fuels with electric versions will also reduce the carbon output from your home. In addition to the standard electric appliances that are widely available, there are options that are more energy efficient.


Induction stove tops work with magnetism between the cookware and the stove. They're safe. Temperature control is accurate. And they're easy to clean. An induction stove is 5 to 10 percent more efficient than conventional electric stoves and about three times more efficient than gas stoves. And they’re better for indoor air quality than gas burning stoves.


Heat pump clothing driers use less than half the energy per load as compared to conventional driers. They work by using hot air to absorb moisture from your clothes in order to get them dry after a wash. After this air passes through the drum, it goes through an evaporator which removes the moisture and is then collected as condensation to be stored in a tank. The remaining air is re-heated and sent back to the drum to start the cycle again and continue drying.


Financial rebates and tax credits


There are incentives offered by the federal government and local utilities to help homeowners offset the cost of new hot water heaters and appliances. Make sure you discuss these available incentives when you get your free in-house energy audit.

Federal programs

The Inflation Reduction Act introduced two incentives for hot water heater and electric appliance upgrades that are installed on or after Jan 1, 2023. Note, however, that the rules for implementing the first program, the HOMES rebates, are not expected from the Department of Energy until the spring of 2023. Therefore, these contractor rebates will not be available until that time.


The HOMES rebate program provides upfront discounts of up to $1750 for a heat pump water heater, $840 for an induction stove, and $840 for a heat pump clothes dryer. Lower income taxpayers who earn less than 80% of their Area Median Income can get a rebate of 100% of the price of the appliance up to the limits for the appliance that is stated above. Moderate income taxpayers who earn between 80% and 150% of their Area Median Income can get a rebate of 50% of appliance price up to the same limits. The HOMES rebates will be given to consumers at the point of sale.


The current Area Media Income for Marblehead can be found in the following table*:

*The table above is for the 2022 tax year. This table will be updated in 2023.


The High-Efficiency Electric Home Rebate Act (HEEHRA) provides for a tax credit equal to 30% of a water heater heat pump with a limit of $2000. There are no HEEHRA tax credits for induction stoves or heat pump clothes dryers. The HEERA credit has no income limits so homeowners who fail to qualify for the HOMES rebate may be eligible for this tax credit. Also, low- and middle-income taxpayers who qualify for the HOMES rebate, can still get the HEEHRA 30% tax credit for the remainder of their payment balance.


Consult your tax advisor about how you can take advantage of these program to offset the cost of electric water heaters and appliances.


Utility programs

The NextZero program from the Marblehead Light Dept provides the following additional incentives:

  • $50 for an Energy Star clothes washer

  • $50 for Energy Star clothes driers

  • $500 for heat pump hot water heaters

  • $500 for heat pump clothes driers

  • $500 for induction stoves (when replacing natural gas or propane stoves)

  • $100 for induction stoves (when replacing electric stoves)

These rebates require the completion of a Home Energy Audit prior to installation. You can schedule your audit by calling 888-333-7525. The Home Energy Efficiency Rebate Form can be found here: https://marbleheadelectric.com/rebates-incentives.html.


Homeowners who are customers of National Grid for natural gas deliveries can apply for the following rebates through the Mass Save program:

  • $750 for heat pump hot water heaters

  • $50 for Energy Star clothes driers

  • $500 for induction stoves

The online site to apply for a MassSave rebate is found here: https://frontdoor.portal.poweredbyefi.org/initiative/marebates.


Mass Save also offers 0% interest loans of up to $25,000 for the out-of-pocket costs of qualified energy efficient home improvements.


Additional info and applications for the Mass Save rebates can be found here: https://www.masssave.com/en/saving/residential-rebates.