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California Energy Code – What Does This Mean For Energy Storage?

After a historic unanimous vote, California was declared the first state in the US to mandate builders to install solar and battery storage.

The approved Energy Code (Building Energy Efficiency Standards) applies to newly constructed buildings, additions, and alterations. They are an essential component of California's climate action plan. The 2022 Energy Code is aimed to benefit the state in meeting its public health, climate, and clean energy goals.

Every three years, the California Energy Commission (CEC) updates the Energy Code. The CEC adopted the 2022 Energy Code on August 11, 2021 and it was approved for inclusion in the California Building Standards Code by the California Building Standards Commission in December. Buildings that apply for permits on or after January 1, 2023, must adhere to the Energy Code of 2022.

This mandate will further increase the solar industry statewide and it's only a matter of time before other states across the USA follow California's lead.

The Mandate

The 2022 California Energy Code encourages the use of energy-efficient electric heat pumps, provides electric-ready requirements for new dwellings, expands solar photovoltaic and battery storage standards, tightens ventilation rules, and more.

It mandates that newly constructed residences and businesses in California use electric appliances instead of natural gas equipment. They are expected to have PV and storage. It expands existing rooftop solar and battery storage standards to make renewable energy more widely available where it is needed. It also increases gas stove ventilation rules to improve indoor air quality.

Photo Credit: California Energy Commission

In newly constructed homes and businesses, the 2022 Energy Code focuses on four main areas:

  1. Encouraging the use of electric heat pumps for space and water heating, as they use less energy and emit fewer pollutants than gas-powered devices.

  2. Creating electric-ready requirements for single-family houses so that owners can choose to use cleaner electric heating, cooking, and electric vehicle (EV) charging choices whenever they want.

  3. Expanding solar photovoltaic (PV) system and battery storage regulations to provide renewable energy on-site and support the state's efforts toward a 100 percent clean electricity grid.

  4. Adding robustness to ventilation standards to improve air quality indoors.

The Significance

The state's energy policy authority voted unanimously to approve rules that will reduce the reliance of buildings on fossil fuels and increase energy efficiency.

The state is looking to add 280 MW of PV to the grid annually and the standards plan to result in 100MW/400MWH of storage. The 2022 Energy Code establishes electric-ready requirements for single-family homes, allowing them to use electricity for cooking, heating, and vehicle charging.

It also promotes the use of electric heat pump technology for space and water heating rather than natural gas. It broadens existing standards for rooftop solar and battery storage systems in order to make clean energy more widely available where it is needed.

Furthermore, it strengthens ventilation standards for gas stoves in order to improve indoor air quality. The rules would apply to newly built homes and businesses and would go into effect on January 1, 2023.

Impact On The Future Of Energy Storage

Climate change is having an increasing influence, necessitating a higher demand for structures that are comfortable, efficient, and robust. Each new code directs building development to better withstand extreme weather, cut energy costs, and reduce climate and air pollution.

Photo Credit: California Energy Commission

The 2022 Energy Code is expected to save $1.5 billion in consumer costs and 10 million metric tonnes of GHGs over the next 30 years, the equivalent of taking approximately 2.2 million cars off the road for a year. New energy-efficient technologies will become more widely used, lowering their prices over time.

How Can RE Royalties Help?

We believe it is vital to invest in sustainable infrastructure to take action on climate change, create a net-zero emissions future, and create energy security for citizens. Likewise, we support operators who are looking for solutions to fight climate change and meet future energy reliability needs in a more sustainable way.

RE Royalties is committed to providing unique financing solutions to companies looking to develop renewable energy systems. As a result, we allow our clients the opportunity to grow their business while reducing greenhouse gas emissions, without worrying about financial restrictions.

If your organization is ready to take a step forward in the fight against climate change, RE Royalties is ready to help you meet your financing needs. Contact us here.

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