First, the aluminum wire
In the 1960s, owing to a copper shortage, they rushed to market aluminum wire made from transmission line alloys, for 15-30A branch circuits. Electricians used it with common receptacles and switches listed for Cu-only, and in the rush, nothing was properly tested. On top of that, the work was often badly performed because housing booms tend to draw from the bottom of the barrel skillwise. I hardly need to tell you how that went: the things you saw were indeed your house almost burning down, and they were due to arcing. There are two good fixes:
- Tear it all out -- kill it with fire before it kills you with fire.
- Feed it from AFCI breakers, which will detect and trip on arc faults before they melt insulation. Then at leisure move through the house, and either tear it out, or clean up all the terminations of every wire, using CO-ALR rated receptacles/switches and Alumiconns instead of wire nuts.
As a backgrounder, copper has been commercially viable since 9000 BC, aluminum since 1950 thanks to smelting processes which use electricity. Obviously Al arrived in an electrical system long built-out and with pre-existing stock of gear made for Cu-only. The AA-1350 alloy, developed for steel-core transmission lines not small-wire terminations, was also a problem. All done in a rush.
Regardless, it can be argued that Cu is the bad actor because it doesn't have a good elasticity range and likes to work-harden. Al wire on Cu lugs doesn't work, but Cu wire on Al lugs works fine - as seen on Alumiconns, CO/ALR receptacles, and the lugs on your panel. You need to get the torques right because of dissimilar metal expansion/contraction rates. The right torque lets the Al flex and spring back as Cu changes size.
The new AA-8000 alloys are safe for 15-30A branch circuit wiring, but I won't use it because the inspector hates it, the buyer hates it, there's no cost savings, and it's too oddball. Like a lot of people, I start looking at Al for 60A+ (#4-), the larger, the more likely.
Needed service
As I look at your numbers, first, on-demand water heat, awesome. Even better if it's several units near point of use, because then you're not paying or waiting for hot water to cross the house. It's common for all-electric houses in the snowbelt to have 400A service.
I don't understand 4x50A for air conditioning. This seems like both too little and too much for a heat pump, the pump proper doesn't need 50 and the emergency heat usually needs more than 50. Critical issue is which will be used at the same time. If you need to run 4x50A at once, you're gonna need a second service.
Subpanel
I think a subpanel is a great idea and I would go 200 or 225A. Stay with QO if you like, great commercial-tier panel type. I would confer with the power company about where to locate this if it's to be the future main panel for a second service (keeping in mind one option is to put the main breaker outside as part of the meter pan, and feed this as a subpanel). Set it up so you can do both:
- For now, feed it with as you plan, a 100A or 125A breaker and correct size wire.
- later, make it the "main" panel of the second service.
Spaces: You say nine 2-pole breakers (seems low, but alright, 18 spaces) plus you say 15 singles (but I count 18 singles in your panel already with the double-stuff's).
Using double-stuff breakers is bad news, especially on a panel with 3/4" wide breakers. Most circuits are or will require AFCI or GFCI (and you want AFCI on any AL branch circuits). Those don't come in double-stuff, not even on 1" breakers.
Now we're at 36 spaces optimistically, you have 30 now. I would recommend at least a 30 space subpanel but given the small cost delta, I'd go 40 or 42. 40 is not unreasonable for a 200A service.
Existing panel
As far as the existing fat 200A aluminum wires, The lugs are aluminum. I would call the power company, have them pull the meter, inspect them at all ends for deterioration, clean 'em up, use the No-Ox.
Change the meter-panel run to Cu if it's really going to bother you. Copper on an aluminum lug will work if you get the torques right.
What am I overlooking? See the two large wires landed on the neutral lug and dissimilar metals to boot? That is illegal, a recipe for disaster, and a lost neutral can do far more damage than a lost hot. If the stranded Cu cable is your wire to your grounding electrode, that should go to your ground bus. If you absolutely need both wires to land there, then get the correct lug for this, which has voids for 2 wires.
Nope. Try
Src GALCO
It sounds like you prefer running 6 AWG wire. Paralleling is absolutely not allowed, you cannot run two #6's for 100A instead of one #1Al or #3Cu. If you want to keep your heavy-wire runs to a minimum, don't be bashful about putting the subpanel right next to the main panel. That is completely kosher.
For a short run, I'd be inclined to use copper (damn the dissimilar metals) because it will flex easier and be less likely to unclip the breaker.
What does the citation mean?
The facts are that you need to apply the new codes inside the scope of new work, and the remodel qualifies as new work. The areas of the house you are not touching should be grandfathered. The section of the code you are citing did not mention that fact. This is a common problem with citing random bits of code.
The code says you need AFCI protection in all those places. However this is overridden by the fact that the other locations are grandfathered. The area you are doing new work is not grandfathered and the requirement applies there.
New panel
You can replace your existing panel if you really want to. Or if it is a dangerous FPE. Or if it is an obsolete panel like Pushmatic where you won't be able to get AFCI breakers.
However, you can also install a subpanel. You would need to move a number of circuits over from your existing panel to the new subpanel - enough to make space for a large double breaker, which will power the subpanel.
Now if you need 2 extra circuits and need to move 4 to make the space, you can get a 6 space panel. However that means you'll be right back here again next time you add anything. You could add a 12 space panel but again you are just kicking the can down the road. This is where my colleagues recommend a 20 and I recommend a 40 space panel. The cost is trivial compared to the cost of having this problem. My first motive is to never have to deal with this again, ever, and my second motivation is to plan ahead so the subpanel can later become the new main panel, after you move circuits over, one at a time at your leisure.
Also beware of panels which say "50 circuit 30 space", those are only good for 30, because the double-density breakers are not available in the GFCI or AFCI that almost every circuit requires these days.
The subpanel can be next to the main panel (a good idea for a future switchover). Or, if the kitchen is fairly far away from the main panel, it can be near (not in) the kitchen. That will make all your circuit runs much shorter.
Everything related to the new panel work will lose grandfathering and need to meet current code. This is one reason to do the subpanel instead of replacing the main panel; it avoids having to upgrade every circuit to new standard, almost all both AFCI and GFCI.
While we're on the subject of overbuilding...
Also, what sort of activities do you expect in the kitchen? Any chance someone might be, I don't know, just spitballing here... cooking? Because these days, a lot of kitchens see not much, while others see quite a lot. Those can be populated with coffeemakers, toasters, skillets, grills, sous vide, wafflers, you name it. These heat-making appliances are typically sized at 1500W and cannot share a 20A circuit. And your chef will probably want to use several at once when busy. S/he will mightily appreciate it if your kitchen is populated with as many kitchen countertop circuits as you can bear to install. One circuit per receptacle is not excessive. Crazies like me even go for one circuit per socket. This is where a subpanel near the kitchen will be particularly useful, and that's the easy way to do it.
Best Answer
MWBC's and double-stuff
The worst danger to double-stuffing breakers is encountering a multi-wire branch circuit. In that case, double-stuffing can overload the shared neutral. However, I don't see any markings on your wires, so it appears they are installed in cable, and all your single-pole circuits are installed with their own /2 cable. If that's so, then you have two multi-wire branch circuits in the box, already on 2-pole breakers where they belong, and I trust you'll keep them either on 2-pole or the inner 2-pole breaker of a quadplex. These are
Alien breakers
You have a Siemens panel, but you have Eaton "BR" breakers in the panel (the ones you consider candidates for replacement). Those are alien breakers and should be removed immediately. They may seem to snap in, but if you compare them to how a proper Siemens breaker snaps in, they feel different; that difference is the breaker not engaging properly to the bus stabs, which could cause arcing under load. That will destroy the bus stab, and now you'll have an 18 space panel. So those BR breakers disappear - today. And the guy who installed them isn't invited back.
What might've confused that guy is that Eaton does make a "CL" breaker line, specifically UL-classified to replace your Siemens Q115/Q120 breakers. However BR is not that line, note CL breakers are not classified for BR panels. CL costs more and is much harder to find, so there's no earthly reason to go that way unless you have a high volume commercial account with an Eaton dealer (or want Eaton-only exotica like CLR "remote control" breakers).
This panel...
You are correct, AFCI breakers are not available in double-stuff. The most you could do is combine 2 circuits onto one AFCI, but it appears your existing AFCI breakers are heavily oversubscribed already, serving more than one room each. Somebody really, really chintzed out on this panel, and is putting you to considerable inconvenience. Well, I hope they really, really, really enjoyed that pizza (the one they bought with the savings on not getting a properly sized panel).
At your very first opportunity, you will want to install at least a 20 space subpanel, either here, or somewhere more convenient to your loads. A proper house, especially one with 200A service, needs 40+ spaces. There's always another load, and "I'm out of space, help" is a top question here.
Best plan going forward: option 1
I see a couple options. The first one is simpler/cheaper, but the second one prevents future problems.
Replace the three alien BR breakers with a Siemens QT type ("Q" Twin) Q2020 duplex breaker, and a Siemens Q115 one-pole. That frees up one space, and gets you home for about $14.
Option 2
You know the problem where someone replaces a multi-wire branch circuit 2-pole with a duplex, and overloads the neutral? This option has a big advantage: it heads that off. This overstuff problem isn't going to go away, and somebody's going to come along and want to compress those big 2-pole breakers. So we're pre-emptively double-stuffing the MWBCs so the next guy can't screw them up.
We'll use quadplex (Siemens calls them Triplex) breakers. And by the way, MWBCs require common maintenance shutoff, so they must be on the inner 2-pole on a quadplex. The outer 2-pole won't do, even if they're handle-tied, because the handle-tie is too flimsy to assure common maintenance shutoff (and the labeling says so).
We replace the 15A 2-pole MWBC (Disposal/Dishwasher) with with a Q21515CT quadplex. (15A singles and 15A inner 2-pole). We are stuck doing this because this is the only quadplex readily available with 15A in the center. That is where the MWBC goes. The two outer 15A's are independent 1-poles. Your panel has two singleton 15A circuits -- "Furnace" (which must be a separate breaker) and "Garage/GFCI". Those move to the outer terminals of this quadplex.
Then, let's kill two birds with one stone. Pre-emptively replace the "Kitchen#1/Micro-hood" MWBC 2-pole, in similar fashion, with a Q22020CT 20A-all-around breaker. Then, likewise, move two 20A single circuits to the outer positions. I would say go with what wires will reach. This does one other useful thing -- frees up two real Siemens 20A breakers. Those replace the alien BR breakers, which go on Craigslist unless you need them to fill empty holes.
This scenario will cost you about $40 plus some 12 AWG pigtails, because Mr. Snippy didn't do you any favors by nipping off the wires to barely what's needed to reach the breakers now. Future note: Every circuit should have its hot and neutral both long enough to reach every breaker space in the panel. Neutral for GFCI or AFCI.
This option will create some empty holes in your panel. Slap any handy breaker in there, and don't connect it to anything, just put a sticker with a red X on the breaker. If it's a BR breaker, spray-paint the whole breaker red to deter people from using it.