California Dreaming of Net Zero

The rubber starts to meet the road as momentum grows behind Senate Bill 350, calling for California to generate half of its electricity from renewable sources by 2030

By Diane De Felice

The passage of Public Resources Code section 25402 over 40 years ago set in motion efforts to reduce inefficient and costly consumption of energy. For the past decade, the California Energy Commission (CEC) has set energy goals to reduce greenhouse gas (GHG) emissions, establish zero net energy (ZNE) for residential and commercial construction, increase the state’s renewable portfolio standard (RPS), and reduce urban water demand. This was in conjunction with the California Public Utilities Commission adopting an Energy Efficiency Strategic Plan committing all new residential construction to achieve ZNE by 2020 with commercial construction following by 2030.

Now in 2017, the rubber starts to meet the road as momentum grows behind Senate Bill 350, calling for California to generate half of its electricity from renewable sources by 2030, and Senate Bill 32, requiring California to reduce GHG emissions to 40 percent below 1990 levels by 2030. Pushing climate goals even further, recently, Gov. Brown set the state policy goal of reaching 80 percent below 1990 GHG emission levels by 2050. While the state has concentrated on the large utilities to bring emissions reductions through renewable energy development,  now the immediate focus includes building energy-efficiency measures to further progress considering residential buildings account for 32 percent of total state electricity consumption while commercial buildings consume 37 percent.

The 2016 California Green Building Standards Code (CALGreen) defines ZNE as over the course of a year, a new “building” should consume no more energy than it generates from on-site renewable sources. To do so, building design improvements will include enhanced attic and wall insulation, instantaneous (tankless) water heaters and high-efficacy lighting and controls to decrease energy loss and use. The new Title 24 building regulations and ZNE goals become reality in 2020 for residential construction,  and expand in 2025 to all new or renovated state buildings and in 2030 to all new commercial buildings.

Specifically, the 2016 California Green Building Standards Code, CCR, Title 24, Part 11 Residential mandatory measures focus on reducing odorous or irritating air contaminants that harm the comfort and well-being of building workers, occupants, and neighbors. In particular, measures that improve site and indoor air quality include covering duct openings, resilient floor systems, limits, and better management of VOC (volatile organic chemicals) levels in materials and interior moisture control. In comparison, the focus for nonresidential requirements is on design and development that include “environmentally responsible site selection, building density and development to protect and enhance the environmental quality of the site and adjacent properties.”

Several communities have adopted new sustainability or energy policies addressing ZNE building in advance of state deadlines. Santa Monica’s recent update goes into effect in May 2017, requiring high-rise multifamily and nonresidential buildings including hotels to use 10 percent less energy than allowed in the energy budget under the 2016 California Energy Code.

One issue that will likely continue to be a challenge for the multifamily product is how to account for reducing plug-in loads and anticipate building occupancy and behavior that can vary drastically from unit to unit (single occupant versus family of four). Therefore, builders face the conundrum of balancing increasing consumer reliance on computer devices that drive up energy demand and how to account for occupancy variances while cost-effectively complying with regulations.

These new ZNE measures will not come without a price. A $300,000 home could increase by $23,000 after compliance. This may further exacerbate the state’s current deficiencies in affordable housing stock. Critics also argue the aggressive ZNE requirements may necessitate deadline extensions. The CEC indicates the timelines are firm, and apart from climate benefits, counters that occupants will benefit from healthier and more comfortable living conditions, higher home values, and utility bill costs savings over the building’s lifetime.

Diane De Felice’s experience includes both state and federal litigation and being lead counsel on complex groundwater matters, master-planned communities, and other types of development involving specialized environmental and regulatory practices. She may be reached at ddefelice@bhfs.com.

RESOURCES

1. https://newsroom.smgov.net/2016/20/27/santa-monica-city-council-votes-in-the-world-s-first-zero-net-energy-building-requirement-implementation-begins-in-2017

2. On December 16, 2016, the California Energy Commission released draft Renewable Energy Transmission Initiative (RETI) 2.0 report stating, “Transmission development and new renewable energy sources could help the state meet the mandates set by SB 350.

3. KPCC, May 1, 2016, by Julia Cart, Buildings in California must use energy more efficiently to meet state goals, http://www.scpr.org/news/2016/05/01/60147/buildings-in-california-must-use-energy-more-effic/; Market Watch, Oct 13, 2016, by Gabriel Kahn, the Quest for home utility bills of . . . zero. http://www.marketwatch.com/story/the-quest-for-home-utility-bills-ofzero-2016-10-13

4. All new residential – single family and multifamily below 4 stories.

5. Chapt. 5, Section 5.101. CalGreen

6. Single-family homes built with the Energy Commissions 2016 Building Energy Efficiency Standards will use about 28% less energy for lighting, heating, cooling, ventilation and water heating compared to 2013 standards. See http://www.energy.ca.gov/releases/2015_releases/2015-06-10_building_standards_nr.html.