Aluminum is great for many things in our world. House wiring is not one of them.
I continually remind home buyers and investors to focus on the "not-so-pretty" but important items when making purchase decisions. Those items don't get the same attention as that new custom kitchen or gleaming cedar deck, but they might end up costing you the same amount of money.
The electrical system is one of these important items. Certainly if the system is wired with aluminum, it's something you should pay attention to.
Let's provide a bit of background. Copper, historically being a relatively inexpensive metal with high conductivity, has always been the preferred (and only) metal used for house wiring. Due to commodity inflation and copper's price increase in the late 60s and 70s, builders and the electrical industry turned to using aluminum for house wiring, a much cheaper metal.
This didn't affect all houses, but did make its way into many homes built or renovated between 1965 to 1978 in Canada and the US.
In a nutshell, aluminum is an inferior metal compared to copper when it comes to house wiring. It's a softer metal that's easier to nick and damage, potentially causing overheating, and in some cases even a fire. Manufacturers and regulators knew this at the time, and accounted for it by increasing the thickness of the wiring to reduce overheating.
What they didn't account for was the installation methods. Aluminum wiring was installed using the same components as their copper counterparts (connectors, breakers, outlets, switches, etc.). This resulted in a host of problems throughout North America. Eventually, manufacturers came up with other solutions for components. For example, using outlets marked CO/ALR or AL-CU.
They also didn't account for the poor performance of pure aluminum. So around 1972, they came up with a better version of the aluminum wiring using a special alloy that was less prone to issues
This improved things a whole lot, but the reputation of aluminum had already been tarnished (pardon the pun), so they scrapped it altogether and moved back to copper in the late 70s.
Depending on who you speak to, you'll hear something different. Some might say that aluminum wiring needs to be replaced, or it’s not permitted by the local authority, or you won't be able to get home insurance. These are simply not true, as long as the installation methods are up to date and have been inspected.
We'll discuss what you should do if you own or are considering buying a house with aluminum wiring, but first let's go over how you can find out if the house has it in the first place.
How Do You Know If The House Has Aluminum Wiring?
The age of the house would be the first indication. Again anything built between the mid 60s to the late 70s. Also consider renovations that were completed at this time. There are many houses built with copper wiring in the 50s and 60s, but finished their basements in the 70s that got wired with aluminum. Remember though, not all houses were affected.
Your home inspector should be able to easily determine if there is aluminum simply by pulling a few outlet and light switch cover plates and looking at the ground wired inside the box. And since most inspectors will remove the cover off the main service panel they can easily see the type of wiring being used.
Sometimes, you might see exposed wiring in the basement that clearly states "Aluminum" right on it.
Also the poorer quality aluminum used up until 1972 might show "EC grade" or "AA-1350" on the cable. The better quality version post 1972 might show "AA-8000", which would likely indicate a better quality installation.
Now, regardless, if you know that you have Aluminum wiring, there is some work that needs to be done to ensure that A) It's safe for anyone living there, and B) Your insurance company will give you coverage.
What Do I Do Now?
Obviously you want to make sure that any people (or pets for that matter!) are safe living in the house. So does your insurance company, albeit for less altruistic reasons.
You'll need to hire a licensed electrician to do a check and correction of all accessible connections. You'll also need to get your local authority to come out and do an inspection. In Ontario, that would be the Electrical Safety Authority.
Very roughly, this is going to cost you in the neighborhood of $2000 to $4000 depending on the size of the house, and the amount of updates that need to be done.
What Does This All Mean?
Basically this means that if you add in the cost of $2000 to $4000 to the house, and the property still makes sense financially, you might still want to go for it.
Consider also that there's a stigma associated with aluminum wiring. Even if you're updating everything to be entirely safe, you'll still need to disclose it later when you sell, and who knows what a potential buyer might think. But for the same reason, you might even be able to get a good deal for the property (I know I know....yeah right in this crazy seller's market).
There are many conditions in an older house that I personally don't have issues with, but need to consider what a future buyer might think. And what if regulations change in a few years, when the authority says that it has to be replaced? This definitely needs to be taken into consideration.
In some cases, it might even make sense just to replace it altogether so that you won't have to deal with the issue later on. For example, if you have a bungalow, and you're going to do new wiring for a basement suite anyways, it might be a good time to redo everything. It might not make as much sense if you have a two-storey home with an already finished basement.
Ultimately this might not have answered the question: "Should You Run Away?", since there are so many factors to consider. It's definitely not black and white.
But my goal here was to dispel the myths around aluminum wiring so that you can take everything into consideration and make an educated decision for yourself.
To keep things in perspective, there are hundreds of thousands of houses in Canada, and millions in the US that are wired with aluminum. By itself, aluminum wiring is definitely not the boogeyman that it's made out to be, but you should still be aware of its implications because it can have a real impact on your bottom line.
So pay attention to the boring electrical system next time you go house hunting!