A new law requiring that new single-family and low-rise buildings use all-electric heating systems and appliances starting next year serves as a long-awaited win for environmental advocates, who say each step from the state towards cleaner energy will lower costs for ratepayers.
But turning to the electric grid for more power may put added strain – and costs for New Yorkers – on an already-aging power grid, warns the state energy agency as well as construction associations and fossil fuel companies.
The state Building Code Council voted to approve implementation of the All-Electric Buildings Act last week. The new building code will go into effect in January 2026 with some exceptions, and then expand to nearly all buildings in 2029.
The policy essentially requires new buildings to not be hooked up to a gas line but instead built in a way that comes with alternative systems, such as an air or ground source heat pump.
Assemblymember Emily Gallagher, a Brooklyn Democrat who co-sponsored the original legislation with state Sen. Brian Kavanagh, D-Manhattan, said the measure brings the state closer towards its climate goals.
“It’s a huge milestone for New York, which is leading the nation by officially moving to implement this paradigm-shifting law,” Gallagher said.
On top of savings of up to at least $3,000 annually for some households, advocates say, the electrification of new construction is a significant step in reducing carbon emissions. They point to the building sector as the largest greenhouse-gas-emitting sector in the state.
The electrification requirement comes at an inflection point for the state: The state’s energy grid has been struggling to catch up with rising demands from residential ratepayers, and from data centers, housing developers and large manufacturers setting up shop in the state.
“The infrastructure is simply not ready for all-electric mandates,” said Mike Fazio, executive director of the New York State Builders Association in a statement.
Fazio estimated that thousands of home projects could stand to be delayed because of the new electrification requirement, and that presenting the rule without a “functional grid and resilient supply chain” would exacerbate an ongoing housing shortage.
“I think it comes at an inopportune time because the talk of the last few months ... is about affordability, and the governor is talking about affordability,” he said in an interview. “This mandate puts us further down the road of having new homes less affordable in New York State and it's going to add to the statewide housing crisis that we have of affordability and availability of housing.”
Gov. Kathy Hochul and state energy officials, meanwhile, have said the state will not be able to meet its ambitious climate energy goals. Environmental groups have sued, claiming the state is slow-walking implementation of the climate law, called the Climate Leadership and Community Protection Act. Last week, a judge in the case seemed to agree, saying he felt “almost compel(ed)” to side with the plaintiffs.
Fazio said the electrification rule presents new costs to developers for getting energy to homes reliably.
“To power a site from a hybrid situation of natural gas or propane and electric, to all-electric, requires additional transformers. It needs to bulk up and add capacity to electric substations in the area,” Fazio said. “It probably can take 18 months to two years to get that capacity to a site.”
But advocates argue the regulations would reduce costs.
“It's going to lead to more comfortable homes and homes that are cheaper to build and for people to live in than buildings that rely on fossil fuels,” said Liz Moran, New York policy advocate for Earthjustice.
There are some exceptions for some industries, such as restaurants. And buildings that were constructed before 2026 but are now being renovated are not required to follow the all-electric rule.
The state Builders Association, the National Association of Home Builders, and natural gas companies were among the stakeholders that tried to block the electrification requirement. But the U.S. District Court of the Northern District of New York ultimately blocked that attempt, affirming that the state has the power to mandate the electrification of new construction.
“This is an important moment,” Moran said. “Why would we continue to lock ourselves into the gas system, especially when that doesn't help people, that doesn't save people money, that doesn't help us reduce climate pollution?”
Fazio said that his association and the other plaintiffs in the case are in the process of appealing the decision.
While the state needs more renewable energy and climate emissions reductions, fossil fuels will have to be part of the state’s arsenal to power homes and businesses, the state’s energy policy arm wrote in its 15-year draft energy plan. That will require continued investment, the plan states, while warning that the shift away from fossil fuels could increase costs for those still dependent on older gas- and oil-fired systems.
“Across the US and New York, although low- and moderate-income households on average use less energy and spend less on energy than higher income households, their combined energy burdens are still often many times greater,” the report states.
