Dive Brief:

• The California Energy Commission (CEC) on Wednesday adopted energy efficiency standards for newly constructed and renovated buildings that stakeholders say are the country's first statewide building code that strongly incentivizes all-electric construction.
• The 2022 Energy Code approved by the commission includes elements that encourage electric heat pump technology for space and water heating, expands solar and battery storage standards, and adopts electric-ready requirements for single-family homes.
• "California's new building energy code takes a major step toward a future where we have healthy fossil-free homes and buildings for all," Denise Grab, a manager with RMI's Carbon-Free Building team, said. While the code doesn't go as far as some clean energy groups had pushed for, "it's a big step in the right direction," Grab added.

Dive Insight:

The CEC's 2022 code update is part of a three-year cycle in which the commission adopts standards to increase the energy efficiency and lower the emissions produced by buildings in California. The code is now headed to the California Building Standards Commission and, if approved by that agency, will come into effect at the beginning of 2023. 

The 2022 Energy Code is the product of multiple stakeholder meetings, workshops and more than 300 public comments, according to the CEC. The "star" of the 2022 Energy Code, said Will Vicent, a manager at the CEC's Building Standards Office, is heat pumps. 

"Used in the right applications, electric heat pumps provide substantial increases in energy efficiency, drastic reductions in greenhouse gas emissions and provide opportunities for load flexibility — all while being cost comparable to other prevalent systems in the market," Vicent said. 

The update adopted by the CEC would include heat pumps as a performance standard baseline for water or space heating in single-family homes, and space heating in multi-family homes, as well as certain commercial buildings, Vicent said. In addition, it would adopt "electric-ready" requirements for single-family homes, meaning they would need to have dedicated circuits and other infrastructure that would easily enable electric appliances to be installed in the future.

The CEC estimates that the 2022 Energy Code will result in $1.5 billion in consumer benefits over the next three decades, as well as reducing 10 million metric tons of greenhouse gas emissions. 

RMI and other stakeholders have been urging the CEC to set energy standards that would effectively require all new buildings in the state to be built with electric appliances, Grab said. While the CEC didn't end up going that far, its approved code update is still a significant development, she added — as the first statewide building code that incentivizes all-electric construction to this extent, it sets the bar for other states' ambitions, and "it can really set off an avalanche," she explained.

Other stakeholders agreed. In putting together the 2022 Energy Code, the commission managed to thread the needle of legal authority, market readiness and customer choice "and come out the other end with what will be, if adopted, the strongest state decarbonization code in the country," said Panama Bartholomy, executive director of the Building Decarbonization Coalition, at the CEC's meeting on Wednesday. 

The move was also welcomed by state utilities, including Southern California Edison, which filed a letter with the commission this week voicing its support for the standards. In addition, SCE urged regulators to consider a 2025 code update that will "fully electrify new construction in order to accelerate efforts needed to be on a path to achieve California's 2030 decarbonization target."

"We welcome the opportunity to support the California Energy Commission's efforts to advanced efficient, all-electric new construction when it is feasible and cost-effective," Pacific Gas & Electric (PG&E) spokesperson Lynsey Paulo said in an emailed statement.

In terms of the impact of additional electrification on the grid, Paulo said PG&E continuously forecasts load in its service area and implements upgrades to the distribution grid to meet demand.

"PG&E fully expects to meet the needs that all-electric buildings will require," Paulo added. 

"Fighting climate change requires the widespread adoption of multiple strategies and technologies to reduce greenhouse gas emissions – everything from stronger building codes and transportation electrification to energy storage and hydrogen innovations," San Diego Gas & Electric (SDG&E) said in a statement.