XHHW is an alphabetism or initialism which stands for “XLPE (cross-linked polyethylene) High Heat-resistant Water-resistant.” XHHW is a designation for a specific insulation material, temperature rating, and condition of use (suitable for wet locations) for electrical wire and cable.
Wires with XHHW insulation are commonly used in the alternating current (AC) electrical distribution systems of commercial, institutional, and industrial buildings and installations, usually at voltage levels (potential difference or electromotive force) ranging from 110-600 Volts. This type of insulation is used for both copper and aluminum conductors which are either solid or stranded, depending on size.
According to Underwriters Laboratories (UL) Standard 44, XHHW insulation is suitable for use in dry locations up to 90° C (194° F), or wet locations up to 75° C (167° F).
XHHW-2 insulation, which is similar to XHHW, is suitable for use in dry or wet locations up to 90° C (194° F).
XHHW / XHHW-2 electrical conductor insulation is governed by the following Industry Standards:
• UL 44
• CSA c22.2. No38
• NFPA 70 –2008 (NEC code)
• U.S. Federal Specification J-C 30B
• NEMA WC70/ICEA S-95-658
Aluminum wiring, used in some homes from the mid 1960’s to the early 1970’s, is a potential fire hazard. How safe is aluminum wiring? According to the U.S. Consumer Product Safety Commission, fires and even deaths have been reported to have been caused by this hazard. Problems due to expansion, or more likely micro-fretting and arcing at the connectors, can cause overheating at connections between the wire and devices (switches and outlets) or at splices. The connections can become hot enough to start a fire without ever tripping a circuit breaker!
There seems to be less issue with less splicing. They also make “approved” things to join them looking alot like what you were thinking of using. In the end though, replacing it isn’t a terrible recommendation even as many many folks live with it in their homes.