Renovating for ROI: Electrical Systems

Electrical service

Electrical service can be a very dense and complicated topic, so in this chapter we are going to keep it as simple as we can to avoid confusion. Either your electrical service is functional, or it isn’t. That includes the service panel, the service line, the meter base, and the service mast. This section begins by listing the circumstances that disqualify service immediately and without exception.

When you must replace service entrance equipment:

• Homes with electrical service rated under 100 amps typically need upgrading. While not automatically unsafe, lower capacity service can limit modern electrical usage and may reduce resale value. The meter head, service conductors, and main disconnect must all match the rated amperage to ensure proper function and safety.

• If your service panel is a fuse box, it should be updated to a modern breaker panel. Breaker panels provide easier reset of tripped circuits, improved safety, and better capacity for today’s electrical demands.

• If your panel is a Federal Pacific Stab‑Lok, Zinsco, Challenger, or Pushmatic, it is likely unsafe and may cause problems with appraisals, inspections, or insurance. Replacement is strongly recommended.

Otherwise, you will just need to inspect your electrical service for a few things to be sure there are no safety concerns or problems on inspection:

• Verify that the service entrance cable and meter base are properly sealed and weatherproof to prevent water intrusion. I once had a service panel in the basement that leaked inside the panel when it rained, due to the meter base allowing rain water to penetrate. 

• Check that the proper breakers are installed in the panel. The label inside the panel lists the breakers approved for that specific model. Using non approved breakers may not always cause immediate issues, but it can create a serious hazard. I once encountered a situation while installing a tile backsplash where I was unaware the hot wire in an outlet box had been nicked during the initial rough in. The wires were sticking out and capped, moving them to one side caused the exposed copper to contact the metal box, resulting in a small explosion. When I checked the panel, I realized the main breaker had tripped instead of the breaker for that circuit. The breaker in question had failed to trip, and was also not approved for that panel. I ended up replacing all similar breakers with the manufacturer's approved breakers to ensure safety, and it's something I always pay attention to now.

• While you are in the panel, make sure that the wire sizes match the breaker ampacity. 15 amp breakers should use no smaller than 14 gauge wire, and 20 amp breakers should use no smaller than 12 gauge wire, and so on. A quick internet search will lay out a chart and help you identify wire sizes. The more you do this, the faster you will get at identifying them.

Electrical devices

This section addresses electrical devices, including outlets, lighting, and switches, as well as key branch wiring characteristics that can impact a home’s value. While I have extensive experience with residential electrical systems, particularly in older homes, I am not a licensed electrician. Always consult your local building authority for code and safety requirements before making any changes or repairs to branch wiring or electrical devices.

Branch wiring

  Branch wiring refers to the portion of an electrical system that runs from the breaker or fuse to outlets, switches, and lighting fixtures. A quick look around the service panel can provide an initial indication of the wiring’s age. In older homes, you’ll often see a mix of wiring types, from modern color coded cables to older cloth wrapped wiring. However, the inspection shouldn’t stop there, check around the basement and attic areas for a more complete picture of the branch wiring type and condition. While older or ungrounded wiring does not automatically require a full rewire, there are important factors to be aware of.

• Knob and tube wiring: Knob and tube is an early form of electrical wiring used in homes from the late 1800s through the 1930s. It consists of single insulated conductors run separately along ceramic knobs, with ceramic tubes protecting wires that pass through framing members. Many insurance companies refuse coverage or require an upgrade when knob and tube wiring is present. If it is visible, it will be called out on an inspection. Sometimes it is spliced into and only present in the hidden areas of the wall cavities. Insulation often deteriorates with age, increasing the risk of shorts or fires. I have encountered multiple instances of knob and tube wiring stripped completely to bare copper by rodents.

• Aluminum branch wiring: Aluminum branch wiring was widely used in residential construction from the 1960s through the early 1970s as a lower cost alternative to copper. It consists of aluminum conductors for outlets, switches, and lighting circuits. Aluminum is generally only a concern in small gauge branch wiring (14–12 AWG) in older homes. Aluminum expands and contracts more than copper, which can loosen connections over time and increase the risk of arcing or fires. Homes with aluminum wiring may be difficult to insure and may require special mitigation or replacement. You can identify aluminum branch wiring in the service panel, you will see it attached to 15 or 20 amp breakers. Do not confuse aluminum wire with tin clad copper, which is older and will be rubber and cloth wrapped.

• Cloth wrapped wiring: Cloth wrapped wiring does not automatically need to be replaced. Cloth wrapped wiring was commonly used in homes built before the 1950s. The copper conductors are often tin clad, and the wire itself typically has multiple layers of insulation that remain durable even to modern times. The insulation can become brittle or worn inside outlet and switch boxes, or areas where there is a lot of thermal cycling, so care should be taken when working with it. Cloth wrapped wiring usually lacks a grounding conductor, meaning that GFCI protection is required to meet modern code requirements.

Outlets

There is a pretty simple baseline for when outlets need to be addressed. Although some of this is standardized, some of it is discretionary and based on my own experiences for what matters to a home's value, as well as marketability, especially when dealing with older homes.

• Loose connections: If a plug sits loosely in a receptacle, it has become a hazard and it needs to be replaced.

• Burn marks: If burn marks are present, the wiring needs to be inspected and the device replaced.

• Ungrounded outlets: Ungrounded outlets to be updated to have GFCI protection. This usually requires placing a sticker on the device that states it as such.

• GFCI requirements: Outlets within six feet of a plumbing fixture, serving the countertop, or any outlets outside of finished spaces should be GFCI protected, this will come up on inspection every time. The only reasonable exception is for outlets surviving sump pumps.

• Adding outlets: Rooms should have at least one outlet per wall. This is not a strict requirement. While modern code requires more, older homes in lower value markets should meet this guideline to ensure the space functions as a fully usable living area. A good rule of thumb for adding outlets in general is to add no more than 10 outlets per 20 amp circuit.

• Dedicated circuits: When adding outlets, especially in kitchens, always follow code requirements for dedicated circuits. This typically includes separate circuits for the refrigerator, microwave, and dishwasher and garbage disposal, as well as at least two circuits serving the countertops. Requirements can vary by jurisdiction, so always consult your local building codes. I have been accused of “over circuiting” my kitchen plans by electricians I’ve worked with, but it’s better to be safe than sorry.

Lighting

Lighting is pretty straight forward and simple: 

1. If a room lacks lighting, add it. 

2. If a room has old lighting, replace it.

Anything beyond this is extra credit, and will completely depend on your market. There are some key factors to be aware of when planning for lighting:

• Never install a ceiling fan on a non rated box. You will either need to install a fan rated box, or fasten the fan directly to the joist.

• LED wafer lights add only a modest cost while providing a clean, modern look. I typically use them when installation is convenient, particularly in situations where fishing the wiring is straightforward and minimally invasive.

• Perform load calculations for each circuit to ensure it can safely handle all connected lights and devices. Determine the breaker size and voltage, then multiply amps by voltage and 0.8 to account for continuous load. Add the wattage of all fixtures and devices on the circuit, and make sure the total does not exceed this limit. If it does, redistribute fixtures or add circuits to maintain safe operation. For example, a 15 A, 120 V circuit has a maximum continuous load of 15 × 120 × 0.8 = 1,440 W. If you plan to install ten 12 W LED wafer lights on this circuit, the total load is 10 × 12 = 120 W, well below the 1,440 W limit. This shows the circuit can safely handle the lights without risk of tripping or overheating.