California took another pioneering step in tackling carbon emissions from millions of homes and commercial buildings across the state today. The California Energy Commission's latest policy report puts reducing the climate and air pollution from buildings front and center for the first time, representing a bold—and necessary—shift in energy priorities. It could also save Californians hundreds of dollars annually on their utility bills and create 3.3 million local jobs by 2050.
The commission's Integrated Energy Policy Report (IEPR), released biennially and updated in the off-years, guides California's energy policy agenda, and responds to the direction set by the Governor and legislature. The 2018 update was drafted in a year punctuated by grim, climate-change-driven milestones: The hottest month ever recorded in the state was followed by its deadliest wildfire.
While California has some of the country's most aggressive policies aimed at cutting planet-warming greenhouse gas emissions, its buildings have been quietly contributing a quarter of those emissions. In the push to boost energy efficiency, electricity from renewable resources like wind and solar, and electrification of transportation, emissions from fossil fuels burnt in buildings haven’t received as much attention, until recently.
The California Energy Commission already took the groundbreaking step of requiring all new single-family homes and low-rise apartment buildings to achieve Zero-Net-Electricity starting in 2020, meaning that through a combination of energy efficiency and solar panels, they use no more electricity than the panels generate over a year. However, emissions from burning gas for heat and hot water, which represent more than half of the emissions from homes, were not included.
Then a pair of laws finalized last fall, SB 1477 and AB 3232, paved the way for low-emissions new construction and heating equipment. They also directed the energy commission to assess how to reduce emissions from California buildings, including those from space heating and water heating, by 40 percent by 2030, below 1990 levels.
From Zero-Net-Energy to Zero-Emissions Buildings
With the adoption of the 2018 IEPR Update, the commission rightly identifies the need to pivot from Zero-Net-Energy to Zero-Emissions buildings. "California must make sharp shifts in building energy use to achieve the greenhouse gas (GHG) emissions reductions necessary to meet the state’s long-term climate goals," the report says. “Decarbonizing Buildings” is the leading chapter in the report, which also lays out plans for doubling energy efficiency savings, integrating more renewable energy on the grid, and increasing access to clean energy from pollution-free resources like wind and solar.
Though electricity and gas savings from energy efficiency programs will help reduce building emissions, the commission notes, the state needs to take additional action, and much of that centers on efficient electrification of space and water heating. We use as much gas in our homes and businesses, primarily to produce heat and hot water, than in all the state’s power plants. If a third of California’s buildings switched to clean electric space and water heating technology by 2030, heating emissions would fall by 7 million metric tons per year, the equivalent of zeroing out emissions from four 500-megawatt gas power plants running around the clock, according to an NRDC-commissioned report released last year.
Heat pumps are key to the transition
Heat pumps, a new heating technology that functions like air conditioners in reverse, are central to this transition, the report affirms, noting they use three to five times less energy than gas furnaces and conventional electric resistance heaters. And running them on clean electricity reduces emissions even more. A recent NRDC analysis found heat pump water heaters could slash emissions up to 70 percent per household annually in the Golden State. The California Public Utilities Commission (CPUC) is currently working on plans to advance these and other low-emissions technologies, including solar thermal heating and batteries for solar energy storage, as part of implementing SB 1477.
The effects of switching to efficient electric heating technologies reverberate far beyond lower greenhouse gas emissions: households also stand to save hundreds of dollars annually on utility bills, and the IEPR calls out economy-wide benefits, noting that while 90 percent of California's gas is imported, most renewable electricity is generated in-state, and the work needed to transition to a low-carbon energy infrastructure will create 3.3 million California jobs by 2050.
More ways to decarbonize buildings
The IEPR calls out other levers that can further building decarbonization: reducing emissions from refrigerants, for example; designing utility rates that don’t penalize electrification and reward shifting electricity loads when needed; and replacing fossil gas with renewable gas derived from organic waste. However, there is a very limited supply of renewable gas and it is unclear whether there would be enough available to supply even 10 percent to 20 percent of the state’s current gas use, let alone 100 percent. In fact, today’s share of renewable supply in gas pipelines is less than 1 percent. The IEPR concludes that “renewable gas could likely play a more significant role in reducing GHG emissions in other energy sectors, such as transportation,” and that "there is a growing consensus that building electrification is the most viable and predictable path to zero-emissions buildings."
The IEPR builds on the just-released roadmap from the Building Decarbonization Coalition (BDC), a group that brings together key actors in the public and private sectors. It 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.
California is now recognizing that the heating technology choices that builders and property owners make over the coming years today may lock in decades of emissions. To achieve the goal of carbon neutrality by 2045, the state must ensure those choices include clean, energy-efficient, and affordable technologies. By adopting this 2018 IEPR update, the energy commission sets California on a path to achieve its climate goals and to give Californians access to cleaner, more affordable energy options in their homes and businesses.