If you’re considering investing in solar for your next project, you may no longer have a choice. The California Energy Commission (CEC) panel unanimously voted to require solar and battery energy storage systems for new commercial buildings and high-rise residential constructions. As of 2023, California is the first state to require both Photovoltaic (PV) solar systems and energy storage systems on all new and some retrofit commercial buildings, following the updated 2022 Building Energy Efficiency Standards.
A critical component of the new energy code is the requirement for a battery storage system alongside the mandated PV system. This energy storage mandate aims to ensure that commercial buildings can store excess solar energy generated during the day for later use, especially during periods of high energy demand or when the sun is not shining.
Calculating Storage capacity
To ensure adequate storage capacity, the battery storage system must meet specific capacity requirements. The rated energy capacity and the rated power capacity of the storage system are determined using Equation 140.10-B and Equation 140.10-C. These equations take into account the size of the PV system, the building’s estimated energy consumption patterns, and the local climate. By adhering to these requirements, businesses can maintain energy reliability, manage peak demand, and reduce their reliance on the grid.
Financial Benefits of Commercial Solar
Battery storage systems can help lower electricity bills by enabling businesses to use stored solar power during times of high utility rates or demand charges. Furthermore, energy storage may qualify for additional incentives or tax credits, depending on the location and specific programs available.
Backup Power During a Black Out
A battery storage system can provide backup power when the power is out, ensuring an uninterrupted electricity supply. The battery stores excess solar energy generated during the day, and in the event of a power outage, the stored energy can be used to power essential systems.
It is important to note that the system’s design and configuration will determine its ability to provide backup power during an outage. Some battery storage systems are designed explicitly for backup power, while others prioritize consumption management.
Affected Commercial Properties
The solar plus storage mandate impacts a number of commercial properties, including grocery stores, high-rise multifamily buildings, offices, financial institutions, unleased tenant spaces, retail stores, schools, warehouses, auditoriums, convention centers, hotels/motels, libraries, medical offices, clinics, and theaters. This builds on California’s existing legislation that requires new single-family homes and multifamily dwellings up to three stories high to include solar power.
Tax Breaks for Commercial Solar
To encourage businesses to adopt solar energy, the Federal Investment Tax Credit (ITC) offers a tax credit that reduces federal income tax liability based on the cost of a solar system installed during the tax year. The credit is currently 30% for installations between 2022 and 2032. This financial incentive applies to both PV systems and solar storage systems, making solar energy more accessible and cost-effective for businesses, allowing them to invest in clean energy solutions while potentially saving on utility expenses.
California Energy Commission Weighs In
The California Energy Commission highlights the need for buildings to be more energy-efficient. Commissioner J. Andrew McAllister, the lead commissioner on energy efficiency at the CEC, stated:
“Buildings profoundly influence our health, environment, and economy. In the future, they will use less energy and emit less pollution while still being comfortable and healthy. The Energy Code firmly pivots California’s buildings toward the clean, low-carbon technologies that are the bedrock on which our collective path forward will rest. This foundation will help the state meet its critical long-term climate and carbon neutrality goals.”
2023 CEC Energy Code Compliance
Businesses that understand and adhere to the 2023 CEC Energy Code mandates will benefit from energy efficiency, potential cost savings, and tax breaks.
Consult with solar and energy storage experts at DC Solar Electric to determine the best solutions for your specific needs and ensure your project’s CEC Energy Code Compliance.