What is Aluminum Wiring?
Aluminum wiring was used in approximately 2 million U.S. homes built between 1965 and 1975 as a cheaper alternative to copper during a period of high copper prices. While aluminum is an adequate electrical conductor, it has properties that create fire hazards at connection points: it expands and contracts more than copper when heated, oxidizes (forming a resistive coating), and is softer (connections loosen over time). The CPSC estimates that homes with aluminum wiring are 55 times more likely to have fire-hazard conditions than homes with copper wiring.
Where and how to identify it
Aluminum wiring is most common in homes built 1965-1975. You can identify it by: looking at exposed wiring in the attic or basement (aluminum is silver-colored vs. copper's orange), checking the electrical panel for "AL" markings on wire labels, or having an electrician inspect. Note: aluminum wiring to the panel from the utility (service entrance cable) is normal and not a concern. The issue is aluminum branch circuit wiring to outlets, switches, and fixtures.
Remediation options
Complete rewiring ($10,000-$25,000): Replace all aluminum branch circuits with copper. Most thorough but most expensive solution.
COPALUM crimps ($3,000-$8,000): A licensed electrician attaches short copper "pigtails" to aluminum wires at every connection point using special COPALUM crimp connectors. This is the CPSC-recommended repair and is considered a permanent fix.
AlumiConn connectors ($2,000-$5,000): An alternative to COPALUM using set-screw connectors rated for aluminum-to-copper connections. Less expensive and more widely available than COPALUM.
Insurance and lending
Many insurance companies surcharge or refuse policies on homes with unmitigated aluminum wiring. Lenders may require remediation before funding. These restrictions parallel the issues with knob and tube wiring -- both create fire risk that increases insurance and lending difficulty.
Investor strategy
Properties with aluminum wiring trade at discounts due to insurance difficulty and buyer concern. The remediation cost ($3,000-$8,000 for COPALUM or AlumiConn) is modest relative to the purchase discount you can often negotiate. Include aluminum wiring remediation in your repair budget and verify insurance availability before closing.