Energy Efficiency Requirements
The Energy Action Plan (EAP) "loading order" requires optimization of energy efficiency measures first, followed by demand response and renewable energy. Consistent with the EAP loading order, the CEC's 2004 Integrated Energy Policy Report recommends leveraging energy efficiency improvements in new and existing homes prior to installing a solar system. New residential and commercial buildings in California are required to meet standards that ensure that a certain level of energy efficiency is attained. These standards are updated periodically to consider new energy efficient technologies, practices and methods. Typically the investor-owned utilities offer financial incentives to encourage customers to install efficiency measures beyond what is required by the building standards.
Neither the ERP nor the SGIP require energy efficiency improvements as a condition of obtaining an incentive for installing a solar system.6 Projects installed on new structures that exceed energy efficiency standards by 10% or more, should receive an additional 25% rebate. We encourage the Legislature to consider a requirement to make solar installations mandatory on new structures built in fast-growing, high-energy demand regions such as the Central Valley.
Requiring existing commercial and residential buildings to retrofit energy efficiency as a condition for solar rebates is more complex. Residential and commercial buildings vary as to achievable energy efficiency levels, making it more difficult to establish uniform requirements or standards. By October 1, 2005, the CEC is scheduled to report to the Legislature on strategies to reduce energy consumption on existing buildings.7 These strategies will likely include both mandatory and voluntary measures, and may address benchmarking for existing residential and commercial buildings, reasonable expectations for cost-effective efficiency levels, and methods to quantify efficiency improvements.
At this time, we do not propose to mandate energy efficiency retrofits as a condition to receive solar incentives. Instead, we recommend the CSI require an existing building constructed more than three years prior to the reservation date to receive an energy audit and submit the results as part of the reservation process for the system. We anticipate the CEC will incorporate the strategies contained in the legislative report into the IEPR, and that the CPUC will consider them at a later date.
6 The ERP requires affordable housing projects to demonstrate above-standard energy efficiency.
7 The CEC report is required by AB 549.
