California might mandate solar + storage for new multifamily, commercial buildings

California solar bills

The California Energy Commission (CEC) sent the 2022 California Energy Code to the California Building Standards Commission with a requirement that new California buildings be equipped with solar and storage. The state already passed this rule in 2019 for new housing (we wrote a giant 6-part series on its implications), but now we’re talking multifamily and nonresidential buildings, such as office buildings, schools, restaurants, apartments, and more. In addition to these requirements, the 2022 ruling calls for newly built homes in California to be made ready for energy storage.

“As a result of this vote, virtually all new buildings in California will have solar, and many others could have battery storage upon opening or occupation,” says Evelyn Butler, vice president of technical services at the Solar Energy Industries Association (SEIA). “These newly constructed buildings include office, retail and medical buildings, schools, apartment complexes, and more. Buildings with solar 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 a key part of our clean energy transformation.”

If the California Building Standards Commission affirms the CEC vote in December, the new requirements would go into effect January 1, 2023. SEIA’s Codes and Standards experts contributed to the proceedings and provided guidance and technical input on the expanded photovoltaic and energy storage system requirements needed to make this possible.

Potential impact

The mandate, which would add 280 MW of solar annually according to the Energy Commission’s estimates, combined with continued installations on existing structures would bring the total amount of commercial solar installed annually to over 600 MW – equivalent to the power produced by a typical natural gas power plant. The mandate also would add 400 MWh of batteries to commercial buildings, spurring the growth of the nascent energy storage market that is crucial for providing clean power in the evening and overnight. Combined, and assuming no radical changes to net metering, this decision could increase California’s solar market by roughly 22% and behind-the-meter energy storage market by an insane amount.

But don’t forget about net metering

The California Solar & Storage Association says this decision intensifies the spotlight on the California Public Utilities Commission (CPUC), which holds the keys to whether these standards ever go into effect. Utilities like PG&E are pushing the CPUC to make drastic changes to net metering which could subject the new building standards to revocation by making distributed clean energy technologies not cost effective for consumers.

“With the dire warnings by the world’s scientists about climate change as background, today’s vote is another historic first-in-the-nation move by California 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 business. “But we need the cooperation of the entire Newsom Administration to deliver solutions to consumers.”

2022 building standards rundown 

  1. Commercial and high-rise multifamily PV and storage requirement
    • New construction of select building types (grocery stores, high-rise multifamily buildings, offices, financial institutions, retail stores, schools, warehouses, auditoriums, conventions centers, hotels, motels, medical offices, restaurants, and theaters) are expected to have PV and storage. Multi-tenant buildings in utility service territories without VNEM will be exempt. Buildings and units <5,000 square feet will be exempt from storage.
    • The PV will be sized to meet a target of 60% of the building’s loads. The storage will be sized 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 approximately 70 percent. The Commission also expects the standards to result in 100MW/400MWH of storage annually.
  2. New single-family homes must be “battery-ready”
    • New single-family homes must be wired so energy storage systems can easily be added later. To that end, the standards require a minimum 225-amp busbar, four backed-up circuit (two of which must be the refrigerator and bedroom receptacle outlet), and either a subpanel or split-bus main panel for those circuits.
  3. Incentives for solar hot water
    • As a result of the report commissioned by CALSSA on the cost-effectiveness and GHG reduction benefits of different water heating technologies, the standards have increased the amount of compliance credit for solar hot water.
    • The standards put in place the new electrification baseline, requiring homes to electrify the water heating 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 water heaters.
    • Solar hot water is now a prescriptive compliance option for single-family homes.
  4. Fixing the community solar program
    • When the Commission created the new home PV mandate in the current standards, they allowed one path for compliance to be community solar. However, the community solar compliance option lacked guiderails, and as a result, SMUD created a predatory community solar program, that mostly notably effectively prevented homes enrolled in the community solar program from installing rooftop solar for 20 years. In the proposed new standards, community solar programs must allow homes to unenroll by installing rooftop solar.
    • The proposed new standards make other adjustments to the community solar compliance option such as that the community solar project must be on a distribution circuit, though the Commission stopped short of making other changes we advocated for such as that the energy bill savings should be comparable to that of customer-sited solar.

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