California Makes Big Move on Solarizing Commercial Buildings

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The California Energy Commission has approved first-of-its-kind building standards to spur solar and battery storage — often components in microgrids — in a range of new commercial buildings.

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Approved unanimously August 11, the standards are set to be considered by the California Building Standards Commission in December and, if approved, take effect on Jan. 1, 2023.

The standards build on ones the commission adopted three years ago that incentivize solar panels for most new single-family homes. Those standards took effect at the beginning of last year.

The updated standards incentivize solar and battery storage for high-rise multifamily buildings, hotels, motels, tenant space, offices, medical offices, clinics, retail stores, grocery stores, restaurants, schools and civic spaces like convention centers and auditoriums.

Single-family homes must be “electric ready,” under the standards, in case the home owners have an electric vehicle or want to convert from natural gas to electric heat and cooking. Also, the buildings must have an electrical panel, branch circuits and a transfer switch to accommodate battery storage.

In an effort to reduce natural gas use, the standards include incentives for heat pumps.

Solar, storage markets expected to jump

The commission expects the standards will add about 280 MW of solar a year, bringing annual commercial installations to around 600 MW, according to the California Solar and Storage Association (CALSSA).

The agency estimates the standards will add about 100 MW/400 MWh of battery storage to commercial buildings, the CALSSA said.

CALSSA warned the benefits of the updated standards hinge on a pending California Public Utilities Commission decision on the state’s net metering rules, which determine how much utilities pay for excess power from rooftop solar.

The Solar Energy Industries Association (SEIA) praised the updated standards.

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“Virtually all new buildings in California will have solar, and many others could have battery storage upon opening or occupation,” Evelyn Butler, SEIA vice president of technical services, said. “The rules will significantly contribute to improved grid reliability and local resilience.”

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Standards expected to foster electrification

California’s building standards generally aren’t mandates. Instead, they encourage builders to to take efficiency measures by giving them credits for the steps they take or penalties for ones they don’t adopt. For example, a builder that includes solar and storage on a building may earn enough credits to avoid taking other measures.

“This incentive approach will give builders a strong financial encouragement to transition off fossil fuels, while leaving them implementation flexibility for adjusting their internal processes such as training their workforce and evolving their marketing practices,” Pierre Delforge, a senior scientist with the Natural Resources Defense Council, said.

Delforge expects the standards and financial incentives will lead to the “vast majority” of residential construction in the state to be mostly electric or all-electric starting in 2023.

The updated standards are part of California’s strategy for slashing its greenhouse gas emissions, which includes moving away from fossil fuels in the power, building and transportation sectors to electricity.

Homes and businesses use almost 70% of California’s electricity and are responsible for a quarter of the state’s greenhouse gas emissions, according to the CEC.

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