The state of California has officially made it compulsory for new buildings to have solar photovoltaic panels and storage batteries under the new building clean energy standards passed by the California Energy Commission (CEC). High-rise multifamily, offices, hotel and motels, clinics and medical offices, grocery and retail stores, restaurants, schools, theaters, auditoriums, and convention centers are going to be affected by this requirement from January next year. The standards need ratification by the state’s Building Standards Commission in December 2021, which virtually “always approves these energy changes,” the co-head of the renewable energy practice at Pillsbury Winthrop Shaw Pittman, Jorge Medina.
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According to the California Energy Commission, 70% of the state’s energy use comes from homes and businesses and incorporates a quarter of California’s greenhouse gas emissions. Over 30 years, the agency estimates that would be equivalent to taking 2.2 million cars off the road for a year. There are also significant tax breaks, both state and federal, for projects that include all the technologies. The upside is good, but some in the industry note that CRE players are being put in the position of bailing out states. Energy savings programs are a type of additional value that can make buildings more attractive to existing and prospective tenants.
Although “it should have a positive impact, it’s hard to say the magnitude. The idea that it has to be built so it’s battery ready is useful,” Medina added. Three years ago, California passed standards for home builders, which were to go into effect in 2020. The pandemic played havoc with the plans and many projects were hindered, so there’s been a lack of data to see financial impacts. Rather than having to retrofit construction, the inclusion of additional wiring at the onset can be significantly less expensive.
