Governor Signs SB 1477: Delivers Clean Homes to Californians

Governor Jerry Brown today signed a law that will help deliver the next generation of clean and affordable homes. Senate Bill 1477 will deploy $50 million annually to empower Californians to reduce energy costs, improve air quality, and cut climate pollution.

SB 1477, by Senator Henry Stern (D-Canoga Park), was supported by a diverse group of business, building, health, environmental, and affordable housing leaders who want climate-friendly homes and clean heating technologies to be accessible to all Californians. Governor Brown also signed AB 3232, by Assemblymember Laura Friedman (D-Glendale), which requires the state to assess the options to reduce emissions from buildings by 40 percent from 1990 levels by 2030.

Buildings account for about 25 percent of the state’s greenhouse gas emissions, such as from burning fossil fuels like natural gas and propane to keep buildings warm and to provide hot water. SB 1477 provides incentives for innovative near-zero emission homes and will jumpstart the market for early-stage clean technologies, with a focus on providing support for low-income residents who pay a disproportionate share of their income for energy. This new law further bolsters Governor Brown's recent commitment to achieve carbon neutrality by 2045.

SB 1477 allocates $50 million each year until 2023 from utility cap-and-trade auctions revenue to support two programs:

BUILD (Building Initiative for Low-Emissions Development)

BUILD provides incentives that tap into the ingenuity of California’s builders to find innovative and low-cost ways to “build clean from the start” and gain market experience to make clean heating technologies common practice in new construction. SB 1477 is patterned on the successful New Solar Homes Partnership, which helped kickstart the market for rooftop solar in new buildings.

Builders can employ a range of technologies that work together to reduce climate pollution, including high-efficiency heat pumps, solar thermal, energy efficiency, battery storage, and other advanced technologies that reduce emissions from buildings. The program will take any existing incentives into account so that there is no double-dipping, and builders must go above and beyond current practice while also keeping costs down. At least 30 percent of these incentives will go to technologies installed in affordable housing.

TECH (Technology and Equipment for Clean Heating)

TECH spurs market development for low-emissions space and water heating technologies by incentivizing distributors and retailers to make equipment available, and providing customer education and contractor training. This program will focus on technologies that have the greatest potential to reduce climate pollution, and that improve the health and safety of, and energy affordability for, low-income households.

Clean heating technologies can dramatically cut harmful pollution and lower utility bills. For example, modern electric heat pumps are 3 to 5 times more efficient as standard natural gas water heaters and furnaces. But these technologies are not widely used because they often cost more upfront, many customers and contractors are unfamiliar with them, and they can be difficult to find in local stores. Growing the market for clean heating technologies will give consumers new choices when they replace a furnace or water heater.

SB 1477 also will lead to cost savings. As the market grows, costs for clean heating technologies will drop, just as they did for photovoltaic panels as the solar market developed.

The law directs the California Public Utilities Commissions (CPUC), in partnership with the California Energy Commission (CEC), to design these two programs and to select a statewide administrator for each program.

California Leads on Reducing Emissions from Buildings

SB 1477 is one of two historic bills passed by the California legislature that tackle emissions from buildings. By signing SB 1477 – and AB 3232 – Governor Brown reaffirms California’s status as a global climate leader. Climate-friendly buildings and clean heating technologies just got a huge boost toward becoming the norm for the Golden State.