Updated Residential Technology and Fuel Switching Costs

Release date: March 19, 2026

Energy used in the residential sector provides a wide range of services, including heating, cooling, lighting, refrigeration, cooking, and numerous other end uses. The U.S. Energy Information Administration (EIA) conducts a household buildings-sector survey-the Residential Energy Consumption Survey -that provides information on the equipment stock and energy consumption within existing buildings. However, this survey does not directly gather other information that we need to project future energy consumption, such as costs associated with switching equipment between different technologies and fuels.

The Residential Demand Module of the National Energy Modeling System uses equipment cost and performance technology menus that represent competing options for most of the major end uses. The contracted report in Appendix A and an associated Microsoft Excel workbook provide incremental switching costs that include all necessary removal and decommissioning activities (such as sealing fuel lines or ducts) and internal connections required for fuel supply and operational needs when replacing major end-use equipment with a different technology or fuel than previously installed. This installation may involve additional ductwork, plumbing, electrical work, etc. Previous editions of the Annual Energy Outlook (AEO) used similar contracted reports.

Appendix A's report highlights the objective, assumptions, and methodology used to characterize technology and fuel switching costs for major residential space heating, water heating, cooking, and clothes drying equipment in our AEO Counterfactual Baseline case projections.¹ The associated Microsoft Excel workbook contains all national and census division switching costs and computations in 2022 dollars.

When referencing the contracted report in Appendix A or any related workbook data, you should cite it as a report by Jack Faucett Associates, prepared for the U.S. Energy Information Administration.

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Footnotes
¹In addition to the Counterfactual Baseline case, we also develop sensitivities to explore different assumptions for the cost and performance of future technologies. Unless specified otherwise, Counterfactual Baseline case assumptions apply to side cases.