A 5-Step Roadmap to Zero-Emissions Buildings in CA

California has laid a strong foundation for energy efficiency in new buildings. Now the state needs to figure out how to help the entire building sector meet a carbon-neutral future by 2045. A new report offers a five-point path forward, addressing barriers that have held back progress toward clean energy homes and businesses.

State lawmakers last year approved a path-breaking “zero net electricity” building energy code and two historic bills aimed at decarbonizing buildings, which account for a quarter of California's overall emissions. While California’s has made remarkable progress in growing clean energy's share of power generation, which has already exceeded the 2020 target of 33 percent set by its renewables portfolio standard, and has set a goal to reach 100 percent carbon-free electricity by 2045, most buildings remain reliant on fossil fuels, particularly for space and water heating. About 90 percent of furnaces and hot water heaters in the state are fueled by gas or propane.

The just-released roadmap from the Building Decarbonization Coalition (BDC), a group that brings together key actors in the public and private sectors, focuses on the market and policy advances needed to take our homes and businesses to the next level and bring buildings in line with the state's ambitious 2030 and 2045 climate goals.

The roadmap first sets out targets that will be critical if we are to decarbonize —i.e., eliminate greenhouse gas emissions from— the production of heat and hot water in buildings over the next 25 years. For new construction, the BDC says, zero-emissions building codes should be adopted for the residential and commercial sectors by 2025 and 2028, respectively. "A third of California’s 2045 building stock will be built between now and then" the authors write.

Emissions from all-electric buildings will progressively drop to zero by 2045 as California achieves its 100-percent carbon-free electricity goal. However, new buildings that rely principally on fossil fuels for heat or hot water will continue to generate climate emissions and air pollution throughout their life as there is no equivalent pathway to 100-percent renewable gas. In fact, renewable gas makes up less than 1 percent of the gas supply currently. Fossil-fuel heated buildings are not “zero-emissions-ready.”

It is much easier to construct new buildings right in the first place than to retrofit them later. And building all-electric actually costs less because it avoids installing gas pipes within the building and digging a trench to connect to the gas main in the street. Zero-emissions-ready buildings also cost less to operate in many scenarios, particularly with rooftop solar. They are an important piece of the solution to California's housing affordability problem.

For existing buildings, the BDC recommends increasing the share of high efficiency electric heat pumps for space heating from 5 percent of sales in 2018 to 50 percent in 2025 and 100 percent in 2030. Water heating also should switch to high efficiency heat pumps, going from 1 percent of sales in 2018 to 50 percent in 2025 and 100 percent in 2030. Unless these targets are reached, the report warns, Californians will still be using carbon-emitting fossil fuels in their homes in 2045.

Meeting these targets would require achieving five goals that form the BDC's roadmap to building decarbonization, each goal matched to a key obstacle that must be overcome.

1. Awareness and demand: The technology for zero-emissions buildings exists and is waiting to be adopted, but too many people either don't know about the options or don't understand why they should care. The very concept of building decarbonization needs a marketing campaign, BDC argues, along with a network of local governments, community-based organizations, and vendor partnerships that can clearly convey the health, safety, and economic benefits.
2. Value for customers: Utility customers don't necessarily see the value proposition of a new, efficient water heater or heat pump. When there are clear incentives put forth through well-designed programs; heat pump-friendly electric rates like electric vehicle (EV) rates; and options such as low-cost financing, more homeowners and building operators will convert when their appliance needs replacing.
3. Value for builders and contractors: The businesses that buy and install this equipment, too, must find value in making zero-emissions choices. BDC recommends incentive programs for commercial and residential builders; a statewide program to voluntarily certify buildings and developments that support decarbonization; and a building electrification professional designation for contractors, among other measures.
4. Robust supply: Building decarbonization solutions are not readily available, and there isn’t yet enough policy support to spur the market. A statewide building upgrade program would address the lack of adequate electrical paneling in many homes and businesses, for example, while an aggressive, national-level campaign among policy makers could emphasize the need for incentive programs to increase heat pump sales.
5. Aligned policy: To address existing policies or codes that are out of step with the state's goals, the focus must evolve to include reduced emissions, as well as saved energy. The state's utility commission is making a promising start in implementing the SB 1477 law, which allots $50 million annually toward fostering industry innovation and leadership toward zero-emissions homes, and giving Californians access to clean and renewable heat. The decarbonization roadmap aims to help proceedings like this to consider a wide range of policies and programs that intersect with building decarbonization goals, making sure they're well integrated.

"These are unabashedly ambitious targets and substantial challenges," the report authors write, "but none of that is new to California, a state which has shown itself willing to tackle big problems over and over again." They point to the California Solar Initiative, which spurred growth of the solar industry, and other programs that have already overcome similar barriers to clean and renewable energy adoption in new and existing homes. The roadmap also calls for Governor Gavin Newsom to establish and lead an interagency task force that could affirm the goals above and coordinate action to achieve them.

Members of the BDC, which include manufacturers, utilities, contractors, workers, and builders, support this transition not just because it will slash planet-warming emissions and lower electric bills for Californians, but because they anticipate the economic boost from a growing market for advanced heating equipment and millions of clean energy retrofits. By following this roadmap, in two decades the state could be well on its way to transforming its building stock from a climate liability to a clean-energy boon.