New Energy Saving Measures in California for Residential and Non-Residential Buildings to Take Effect July 1, 2014

Starting on July 1, 2014 in California, certain additions and alterations to residential and non-residential buildings will trigger compliance with new stricter energy-saving measures for plumbing, electrical, lighting and heating systems. The new standards are designed to achieve energy efficiency and preserve environmental quality. Although the new measures will likely result in increased construction costs, California officials have stated that net savings should be achieved in 30 years or less due to the significant energy savings that will result from implementation of the new standards.

Background

Following recent laws and executive orders to reduce energy consumption (among them the California Global Warming Solutions Act (AB 32), which set 2020 greenhouse gas emissions reduction goals, and the Huffman Bill (AB 1109), which tasked the California Energy Commission with reducing lighting energy consumption in residential and commercial facilities),  the California Energy Commission mandated increased energy efficiency in a recent update to Title 24, Part 11 of the California Code of Regulation ("new energy standards").

The new energy standards will introduce new efficiency requirements as well as update existing ones, increasing California's already comprehensive energy efficiency standards. California officials estimate that the new energy standards will result in a 25 percent increase in energy efficiency for residential construction and a 30 percent increase for non-residential construction. Building owners, tenants, managers and suppliers of construction materials should take note of how these new measures may affect them.

What You Need to Know

The compliance requirements vary in California's 16 different climate zones. Thus, to properly understand how the new energy standards will affect your property, it is important to first ascertain the climate zone in which your property is located. Below are some general guidelines as to how the new energy standards will affect residential, non-residential, and mixed-use buildings.

Residential

The mandatory provisions for residential buildings apply to additions or alterations of existing residential buildings where the addition or alteration increases the building's conditioned area, volume or size. The new energy standards apply only to and/or within the specific area of the addition or alteration.

Requirements include:

• At least a 250-square-foot solar-ready zone in the roof of the residence to allow homeowners to add solar photovoltaic panels at a future date.
• More efficient windows to allow increased sunlight, while decreasing heat gain.
• Insulation on hot water 3/4-inch pipes and larger to save water and energy and reduce the time it takes to deliver hot water.
• Return duct design or fan power and airflow testing.
• Residential buildings undergoing permitted alterations, additions or improvements will be required to replace noncompliant plumbing fixtures with water-conserving plumbing fixtures. Plumbing fixture replacement will be required prior to issuance of a certificate of final completion, certificate of occupancy, or final permit approval by the local building department.

Nonresidential

The new energy standards apply to newly constructed non-residential buildings, building additions of 1,000 square feet or greater, and/or building alterations with a permit valuation of $200,000 or above.

Requirements include:

• High performance windows, sensors and controls that allow buildings to use "daylighting." These controls will allow precise and non-interruptive adjustment of lighting to match the available light.
• Efficient process equipment in supermarkets, computer data centers, commercial kitchens, laboratories and parking garages.
• Advanced lighting controls to synchronize light levels with building occupancy, and provide demand response capability. Lighting in parking garages and lots, among others, must now have occupancy controls. Areas of buildings that are not occupied 24/7 will no longer be able to leave the lights on. Modest allowances for egress lighting will remain.
• If solar panels are not added at the time of construction, solar-ready zones in the roof will be required to allow businesses to add solar photovoltaic panels at a future date.
• Cool roof technologies.

Mixed Use

In mixed occupancy buildings, each portion of a building must comply with the specific measures noted above applicable to each specific occupancy type.

Recommended Action

Building owners, tenants, managers, and suppliers of construction materials should evaluate how compliance with these new measures will impact them before closing a transaction related to buildings affected by this regulation.

In addition, FaegreBD recommends the following:

• Update contracts to take into account the impact of the new energy standards.
• Specify in new leases the respective obligations and cost sharing of the parties with respect to complying with the new energy standards.
• Review agreed-upon allocation of costs and responsibilities on existing contracts to determine which party will be responsible for complying with the new energy standards.
• Review the full list of measures that affect the climate zone in which your property is located.

Additional information on compliance requirements can be found at http://www.energy.ca.gov. While it appears at this point that these regulations will go into effect on July 1, 2014, delays are possible. FaegreBD will continue to monitor this regulation and issue updates as necessary.