California Energy Commission mandates solar + storage on new commercial buildings

The California Energy Commission (CEC) today approved the California Energy Code 2022, which sets building standards for new construction. In a historic unanimous vote, California became the first state in the country to require builders to install solar power and battery storage on new commercial buildings and high-rise multi-family buildings. The approved energy code also includes requirements for builders to design single-family homes so that battery storage can be easily added to the already existing solar system in the future, as well as incentives to eliminate natural gas from new buildings. The commission’s 2018 building code update sets requirements for roofs or communal solar energy for single-family homes.

This decision puts the spotlight on the California Public Utilities Commission (CPUC), which holds the keys to determining whether these standards ever go into effect. Photovoltaics and energy storage, whether residential or commercial, are directly dependent on net metering, which determines the credit commercial and residential solar customers receive for the energy their panels feed into the grid and protects against discriminatory fees for solar energy consumers by utilities. Utilities like PG&E are urging the CPUC to make drastic changes to grid metering that could subject the new building standards to repeal by making distributed clean energy technologies uncost-effective for consumers.

“With the world’s scientists’ dire warnings about climate change as a backdrop, today’s vote is another historic California first to literally build a cleaner energy future,” said Bernadette Del Chiaro, executive director of the California Solar and Storage Association. (CALSSA), the state’s largest clean energy company. “But we need the cooperation of the entire Newsom administration to deliver solutions to consumers.”

The commercial mandate would accelerate the installation of solar and energy storage in the state. The mandate, which the Energy Commission estimates would add 280 MW of solar energy annually, combined with continuous installations on existing structures, would bring the total amount of commercial solar installed annually to more than 600 MW, which is equivalent to with the power produced by a typical natural gas power plant. The mandate would also add 400 MWh of batteries to commercial buildings, fueling the growth of the nascent energy storage market that is crucial for providing clean power in the evening and at night. Combined, and assuming no radical changes in net metering, today’s decision could expand the California solar market by about 22% and the current behind-the-meter energy storage market many times over.

“As a result of this vote, virtually all new buildings in California will have solar power, and many others may have battery storage upon opening or occupancy. These newly constructed buildings include office, retail and medical buildings, schools, apartment complexes and more. Buildings powered by solar energy and storage will provide Californians with cleaner and greener living and working spaces. The rules will significantly contribute to improved grid reliability and local resilience, which is an important part of our clean energy transformation,” Evelyn Butler, VP of technical services at SEIA, said in a statement.

New features of the building standards for 2022

  • Commercial and high-rise multifamily PV and storage requirement
    • New construction of selected building types (supermarkets, high-rise multi-family homes, offices, financial institutions, retail stores, schools, warehouses, auditoriums, convention centers, hotels, motels, medical offices, restaurants and theaters) are expected to have PV and storage. Multi-tenant buildings in utility areas without VNEM are exempt. Buildings and units smaller than 5,000 square meters are exempt from storage.
    • The PV will be sized to meet a target of 60% of the building loads. The storage will be adjusted to reduce exports to 10%.
    • Overall, the Energy Commission expects the standards to add 280 MW of PV to the grid annually, which will grow the commercial market by about 70 percent. The Commission also expects that the standards will result in an annual storage of 100 MW/400 MWH.
  • New single-family homes must be ‘battery ready’
    • New single-family homes need to be wired so that energy storage systems can be easily added later. To that end, the standards require a busbar of at least 225 amps, four backup circuits (two of which must be the refrigerator and the outlet in the bedroom), and a sub-panel or main panel with a split bus for those circuits.
  • Solar hot water incentives
    • As a result of the report commissioned by CALSSA on the cost effectiveness and GHG reduction benefits of various water heating technologies, the standards have increased the amount of compliance credit for solar hot water.
    • The standards set the new foundation for electrification, requiring homes to electrify water or space heating, or invest heavily in efficiency features. Homes built with solar hot water will receive more compliance credit than homes built with heat pump hot water heaters.
    • Solar hot water is now a normative compliance option for single-family homes.
  • Fixing the Solar Community Program
    • When the committee created the new house PV mandate in the current standards, one path for compliance allowed it to be community sun. However, the community solar compliance option lacked guide rails, and as a result, SMUD created a predatory community solar program, which especially effectively prevented homes participating in the community solar program from installing rooftop solar for 20 years. In the proposed new standards, community solar programs should allow homes to opt out by installing solar on the roof.
    • The proposed new standards bring other adjustments to the Community’s solar compliance option, such as requiring the community’s solar project to be on a distribution circuit, although the Commission stopped making other changes that we had advocated, such as that the energy bill savings should be comparable to that of customer-specific solar energy.

News item from CALSSA

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