It’s Time for California to Build Cheaper, Faster, Cleaner

The time is now for the state of California to align its building energy policies with its housing affordability, public health, and climate goals. Title 24, its building energy code, will set the rules for energy efficiency levels and whether heating and hot water are powered by fossil or clean energy in new construction beginning in 2023.
new construction in CA
Credit: iStock/Slobo

Dozens of concerned citizens, health and environmental organizations, and building professionals told today's monthly business meeting of the California Energy Commission (CEC) that the time is now for the state of California to align its building energy policies with its housing affordability, public health, and climate goals. The CEC is about to launch a process to update the state’s building energy code, known as Title 24. It will set the rules for energy efficiency levels and whether heating and hot water are powered by fossil or clean energy in new construction beginning in 2023, for buildings that will operate well into the second half of this century.

To get out of the fossil fuel hole, let’s stop digging

If California wants to truly make progress on transitioning to clean energy and avoid the health, economic, and environmental impacts of using fossil fuels, we also need to stop using them to heat our buildings, starting with new construction. The building energy code is critical to success: this code update is expected to be adopted by the middle of next year after an extensive stakeholder process and then go into effect for all new building permits issued after January 1, 2023. The state should align the code with clean energy now, rather than wait until the next code update cycle that wouldn’t become effective until 2026.

Waiting three more years would not only miss an opportunity to unleash a faster, cheaper way to build housing in the Golden State, it would cost Californians $1 billion in unnecessary gas infrastructure, and lock them into 3 million tons additional carbon emissions by 2030.

As of today, 32 California local governments have adopted local codes requiring or strongly encouraging electric new construction, while many more are working through the process and expected to adopt their own local ordinances over the next two years. These local governments are leading, sometimes in the face of fierce opposition from the fossil fuel industry as in San Luis Obispo, because they understand that building new homes and businesses fueled by gas is no longer in their residents’ health and economic interests, and is pushing us toward the edge of a climate cliff.

These local building codes already cover more than 10 percent of California’s population TODAY and rising with every new city moving forward. With 20 to 30 percent of Californians likely to benefit from local codes by 2023, it is the right time for the state to follow suit and establish a single statewide standard.

The local ordinances are sending a clear signal to state leaders that Californians want to live in healthier, more affordable, and climate-safe buildings. The standards are also providing an on-ramp to all-electric construction for California’s builders.

Helping make housing more affordable

What about construction costs? The two major gas-using appliances in most California homes are water heaters and furnaces. Regarding water heating, super-efficient and grid-friendly electric heat pump water heater technology is mature, broadly available, and costs no more to install than the gas tankless heaters required by code today when accounting for avoided gas plumbing and venting costs. The heat pump models are also more resilient as they can continue to deliver hot water from their storage tank through power outages when gas tankless water heaters cannot.

Similarly, it costs no more—and will eventually cost significantly less—to install a heat pump that provides both heating and cooling than to put in a separate furnace and AC system. Builders are already familiar with the technology as there is little difference between heat pumps for space heating and the central air conditioners that are currently being installed in the vast majority of new homes in California.

By avoiding the costs of a gas meter and connection to the gas mains in the street, switching to electric space and water heating can reduce construction costs, not increase them, helping make new homes more affordable in California. Can we still afford to build with gas appliances in a housing crisis?

Electric space and water heating will not preclude gas cooking for people who still prefer cooking with gas in spite of its health impacts and the availability of much better, faster, and safer electric induction alternatives. The code doesn’t regulate gas cooktops so they will remain an option.

Lower utility bills under the updated building regs will be a no-brainer in single-family and low-rise residential, because the current code already requires rooftop solar in new single-family and low-rise apartments. Powering space and water heating with low-cost onsite solar electricity reduces heating and hot water bills by 50 percent or more. There is no equivalent opportunity to reduce gas bills. Instead, gas rates are projected to increase more rapidly than electric rates over the next two decades, and the high-cost of so-called “renewable” gas—even if there were enough of it after industrial needs—would only accelerate that trend.

The economics of electrification can also work in high-rise multifamily buildings but need to be paired with complementary policies to ensure lower costs for residents. The current building code doesn’t require solar in high-rise buildings, which removes one tool that makes the economics of electrification so compelling in new single-family and low-rise residential. The 2022 building code needs to encourage solar on tall apartment buildings, provide compliance credits for high-efficiency clean heating technologies, and continue to advance energy efficiency such as better insulation and windows.

Part of the package

While the building code has an important role to play, it is just one component of a necessary package of policies California needs to make the economics work for electric high-rise multifamily construction. Others include incentives that help developers, particularly those building affordable housing, get over the hump of the first project when they are learning a different construction technique. Programs like BUILD, TECH, and SGIP currently being developed by CEC and the California Public Utilities Commission are key to help the market transition. Affordable housing programs also need to align their eligibility criteria with clean electric construction.

Other necessary policies include:

  • Redesigning electric rates to incentivize rather than penalize electric heating and hot water;
  • Updating the building code so it encourages solar in high-rise multifamily buildings (the California code currently only does that in single-family and low-rise residential); and
  • Removing the remaining compliance hurdles that still penalize some efficient electric equipment types vs. gas alternatives such as variable refrigerant flow (VRF) technology and high-efficiency variable capacity heat pumps.

Similarly, most commercial building types can be built all-electric cost-effectively. The code needs to require all-electric commercial construction to be powered by renewable energy as of 2023 wherever it’s cost-effective.

The CEC must seize this opportunity to unleash the next clean energy revolution in California: build more housing faster, make it more affordable to live in, clean up the air, and mitigate the climate crisis. The time to act is in the 2022, not the 2025, building code update.

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