White Papers: Building decarbonization is critical low-cost strategy to reduce GHG emissions, but significant barriers remain
New white papers highlight opportunities and challenges as California’s PUC begins implementing SB 1477
Three new reports identify best practices, barriers and opportunities to support the development of zero-carbon, all-electric buildings -- a critical low-cost strategy that can help California tackle emissions from homes and buildings, the state’s second largest source of climate pollution.
“Taken together, these papers show that by implementing a robust series of actions in California to support building electrification, we can slash emissions at the least cost to consumers,” said Panama Bartholomy, Director of the Building Decarbonization Coalition.
The three reports, California’s Building Decarbonization Opportunity, Rate Design for Building Electrification, and Strategies and Approaches for Building Decarbonization, precede the California Public Utility Commission’s (CPUC) release of a draft Order Instituting Rulemaking (OIR) on the issue of building decarbonization. The PUC will address the OIR at a January 31 meeting, as it prepares to implement SB 1477 - the first legislatively mandated building decarbonization bill in the country, authored by Sen. Henry Stern (D-Canoga Park), that will grow the market for clean, low-emission heating sources in new and existing homes and buildings.
“The passage of SB 1477 and AB 3232 was an important step towards creating 100 percent emission-free communities through clean, all-electric homes and buildings,” said Alejandra Mejia Cunningham, one of the report authors. “As the CPUC develops the policy framework to guide implementation, we hope they’ll incorporate the recommendations of these papers -- adjusting rates to send optimal price signals, investing in market development and workforce readiness and implementing a range of cross-sectoral strategies to support building electrification.”
California's Building Decarbonization Opportunity highlights recent work by the California Energy Commission, showing that a decarbonization strategy that relies on building electrification will save consumers billions of dollars compared to other carbon reduction strategies. Even still, the report identifies significant barriers to electrification for consumers and the workforce -- including upfront costs, workforce readiness and regulatory tools that don’t account for the full suite of benefits of decarbonization.
“To hit our climate goals, 50 percent of new space and water heating in California’s buildings must be electrified by 2030, moving to 100 percent by 2045. We need a long-term strategy across regulatory bodies in California to drive down costs and quickly grow consumer experience with low-emission technologies,” said Bartholomy.
The report recommends that state regulators reconfigure the existing cost-benefit tests that guide programs to appropriately account for the true costs of fossil fuels. Other recommendations to guide the regulatory framework include:
“For most single- and multi-family home construction, electric appliances have lower lifetime costs than fossil fuel appliances, especially considering the avoided costs of gas infrastructure,” said Bartholomy. “These technologies are already on the market - but they won’t reach mass adoption until we align market interests so that everyone benefits from decarbonization.”
Adjusting key rate design levers is another way the PUC can send price signals to customers that will help them integrate zero-emission appliances into their lives in ways that reduce costs for all Californians, according to the second brief, Rate Design for Building Electrification.
“Evolving rates to support GHG reduction goals is a key step to supporting building electrification, encouraging consumers to use electricity in off-peak times, that will benefit their wallets and the grid,” said Bartholomy. “This report provides comprehensive guidance to the PUC on how smart electricity rate design can cut building emissions.”
The report recommends addressing baseline allowances, providing optional time-of-use rates that reward off-peak electricity use, and revisiting high usage charges for residential customers. The third report, Strategies and Approaches for Building Decarbonization, highlights best practices from across the nation that will help guide California's implementation.
“By incorporating best practices to cut building emissions, California can pursue zero-emission buildings in a way that upholds our values - with a focus on affordability and equity, supporting workers, and creating a positive experience for consumers,” added Mejia Cunningham.
These reports are the first in a series of papers and policy guidance from the Building Decarbonization Coalition. The group will release a Policy Roadmap to guide California decision-makers early next month.
DOWNLOAD REPORT DOCUMENTS