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New building rules in California – looking for more energy efficiency


In the last few days, news spread around the world about California becoming the first U.S. state to require the installation of solar panels in most new homes, starting January 1, 2020. You can read some news reports here. However, the decision approved by the California Energy Commission is far more comprehensive than that. Actually, the rules involve a revision of the Building Energy Efficiency Standards, process that is undertaken routinely every few years. (You can see the rulemaking process and the press release) These new standard, which still needs the approval of the California Building Standards Commission (it is very likely to get it) had the blessing of representatives of builders, utilities and solar manufacturers, according to press reports.

Let’s see what the residential standard includes, principally:

  • Mandatory installation of smart-system solar panels at homes, unless it is evident the panels are not going to generate energy (because of shade, for example). The panels will provide energy for the house, and in absence of that source, the grid will provide electricity as usual.

  • Strengthening insulation in attics, walls and windows, to avoid energy losses.

  • Use of high efficiency filters to trap hazardous particles, and (I assume) avoid energy losses as well.

  • Encourage the use of batteries and smart appliances, in order to have them working in off-peak periods. This would be coupled with time-of-use electricity price, so there is also an economic punishment for demanding the network for non-necessary tasks at peak periods.

(California Energy Commission)

A few comments about this regulation and its impacts:

  • Evidently, costs of construction are going to increase. The Energy Commission states that increase in investment if offset by savings in monthly energy bills. That is to be seen. Let’s not forget that the Federal Government applied additional tariffs to some Chinese products, among others, solar panels, which is not the best way to promote competition and savings for costumers. Also, the mandatory increase in demands might lead to, at least temporarily, higher prices.

Important to say, to satisfy the need of the California market, which plans to build about 117,000 single family homes and 48,000 multifamily units by estimates of the Energy Commission, there would be an increase of demand in raw materials used to manufacture solar panels (you can see here a list of minerals needed). I am not saying that this rule would create an immediate imbalance in the market, but we need to be aware that a mandatory blanket rule applied in several jurisdictions might increase pressure to mine more, when social conflict is arising around the world.

  • Inevitably, technology will progress and there will be a moment when homes will generate more electricity than needed, and it can either be stored or sold back to the grid. Contracts need to foresee that second possibility and utilities will be forced to receive this supply, in order to avoid energy waste.

  • Turning to utilities, there is the never-ending dilemma: with less users, there is an ever-decreasing customers base to share fixed costs, making the operation for that utility more difficult. The Germany case is well documented in that sense. Also, with autonomy in generation, the finances of transmission operations will be impacted. We all know the consequence of having a flawed or non-existent generation or transmission facilities.

(California Energy Commission)

  • Batteries still lag behind in technical development. In the proposed regulations, they are not a mandatory element. In consequence, the solar panel solution will be limited in reaching energy autonomy for homes. Plausibly, that is not the goal at this stage of technical evolution.

I can’t wait to see how the application of this rule changes (or not) the energy landscape in California. It will bring valuable lessons for policy makers, manufacturers, utilities and regulators all around the world. Energy efficiency is always a worthy goal, and reducing waste of energy is probably the best path for diminishing the carbon impact in the planet. Probably there is where our focus should be in the short and mid term.

(DOI-US).

OIL & GAS, MINING AND ELECTRICITY

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