Existing law authorizes the State Energy Resources Conservation and Development Commission to prescribe, by regulation, lighting, insulation, climate control system, and other building design and construction standards that increase efficiency in the use of energy and water for new residential and new nonresidential buildings, and energy and water conservation design standards for new residential and new nonresidential buildings. Pursuant to this authority, the commission has established regulations requiring solar-ready buildings and for the installation of photovoltaic systems meeting certain requirements for low-rise residential buildings built on or after January 1, 2020.

This bill, until January 1, 2027, would require residential construction intended to repair, restore, or replace a residential building damaged or destroyed as a result of a disaster in an area in which a state of emergency has been proclaimed by the Governor to comply only with requirements regarding photovoltaic systems pursuant to the regulations, if any, that were in effect at the time the damaged or destroyed residential building was originally constructed and would not require that construction to comply with any additional or conflicting photovoltaic system requirements in effect at the time of repair, restoration, or replacement. This provision would apply only if one or more of certain conditions are met with respect to the building owners income, insurance coverage, or and the location or and square footage of the construction. Until January 1, 2027, the bill would also require the commission to collect data on the use and application of the exemption from local permitting agencies and, on or before March 1, 2025, and again on or before March 1, 2026, to prepare and submit a report to the relevant policy committees of the Legislature concerning the exemption, as provided.

Because a local agency would be required to determine whether any older applicable photovoltaic requirements are met, this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Existing law authorizes the State Energy Resources Conservation and Development Commission to prescribe, by regulation, lighting, insulation, climate control system, and other building design and construction standards that increase efficiency in the use of energy and water for new residential and new nonresidential buildings, and energy and water conservation design standards for new residential and new nonresidential buildings. Pursuant to this authority, the commission has established regulations requiring solar-ready buildings and for the installation of photovoltaic systems meeting certain requirements for low-rise residential buildings built on or after January 1, 2020.

This bill, until January 1, 2027, would require residential construction intended to repair, restore, or replace a residential building damaged or destroyed as a result of a disaster in an area in which a state of emergency has been proclaimed by the Governor to comply only with requirements regarding photovoltaic systems pursuant to the regulations, if any, that were in effect at the time the damaged or destroyed residential building was originally constructed and would not require that construction to comply with any additional or conflicting photovoltaic system requirements in effect at the time of repair, restoration, or replacement. This provision would apply only if one or more of certain conditions are met with respect to the building owners income, insurance coverage, or the location or square footage of the construction. Until January 1, 2027, the bill would also require the commission to collect data on the use and application of the exemption from local permitting agencies and, on or before March 1, 2025, and again on or before March 1, 2026, to prepare and submit a report to the relevant policy committees of the Legislature concerning the exemption, as provided.

Because a local agency would be required to determine whether any older applicable photovoltaic requirements are met, this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Date of Hearing: April 19, 2023

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Chris Holden, Chair

ABPCA Bill Id:AB 704

Author:(Jim Patterson) – As Amended Ver:April 6, 2023

Urgency: No State Mandated Local Program: Yes Reimbursable: No

SUMMARY:

This bill requires any residential construction intended to repair, restore, or replace a residential building that was damaged or destroyed as a result of a disaster in an area in which the Governor has declared a state of emergency to comply with the state’s requirement for photovoltaic (PV) systems that were in effect at the time the building was originally constructed.

Specifically, this bill:

1. Requires residential construction intended to repair, restore, or replace a residential building damaged or destroyed as the result of a disaster in an area in which a state of emergency has been proclaimed by the Governor to comply with requirements regarding PV systems that were in effect when the building was originally constructed and not with any additional or conflicting PV system requirements in effect at the time of repair, restoration, or replacement.
2. Specifies that this bill applies only when all of the following conditions are met:
   • 1. The income of the owner of the building is at or below the median income for the county in which the residential building is located, as determined by the Department of Housing and Community Development state income limits.
     2. The construction does not exceed the square footage of the property at the time it was damaged.
     3. The new construction is located on the site of the home that was damaged.
     4. The owner of the residential building did not have code upgrade insurance at the time the property was damaged.
3. Sunsets the above provisions on January 1, 2027.
4. Requires the California Energy Commission (CEC) to (a) collect data, to the extent feasible, from local permitting agencies on the use and application of the above provision and (b) on or before March 1, 2025, and on or before March 1, 2026, report to the Legislature on the use and application of the above provision.

FISCAL EFFECT:

CEC estimates costs of approximately $191,000 for one limited-term position for three years to track and report findings to the Legislature (General Fund).

COMMENTS:

1) Purpose. According to the author, “AB 704 is an appropriate, fair, and limited measure to help ease the burden of rebuilding one’s life after all was destroyed by a wildfire.”

2) Background. In 2019, AB 178 (B. Dahle), Chapter 259, Statutes of 2019, provided, until January 1, 2023, a similar exemption to the one proposed in this bill. Subsequently, AB 1078 (Patterson), of the 2021-2022 Legislative Session, which would have extended the exemption established by AB 178 for one year, was vetoed by the Governor. In his veto message for AB 1078, the Governor stated:

The solar requirement is an innovative and forward leaning policy that requires new residential buildings to install a minimum amount of cost-effective solar photovoltaic capacity to reduce homeowner energy costs, improve energy resiliency and reduce greenhouse gas emissions. Extending this exemption would nullify these positive outcomes and instead would increase homeowner energy costs at a time when many homeowners are facing rising electric rates and bills. This exemption also undermines the energy resiliency of homes, especially those in high-fire risk areas, and increases greenhouse gas emissions. Further, this exemption is overly broad and fails to assist those disaster victims who are the most disadvantaged.

One notable difference between this bill and its predecessors is that this bill applies only when all the specified conditions are met. AB 178 and AB 1078 allowed for the exemption if one or more of the specified conditions were met.

3) Solar Standards. The 2019 Building Energy Efficiency Standards went into effect on January 1, 2020. The standards were the first in the nation to, among other things, require PV systems for most newly constructed low-rise residential buildings. CEC established a few exemptions to the solar requirement. Primarily, homes that are shaded by trees, hills, and adjacent structures, are not required to install solar. This may exclude a number of homes impacted by fires in wooded areas. According to the CEC, once rooftop solar electricity generation is factored in, homes built under the 2019 standards will use about 53% less energy than those under the 2016 standards, thereby reducing greenhouse gas emissions by 700,000 metric tons over three years.

CEC analyzed the effect of removing the solar requirement using an average home in California Climate Zone 11, which includes the city of Paradise (which was devastated by the deadly Camp Fire in 2018), and in areas with very hot summers and cold winters. The solar requirement, like all building energy efficiency standards, is required by law to be cost effective. According to CEC, by rebuilding without solar, a homeowner could realize an initial savings of $7,206. Yet, over 30 years, the homeowner could pay $28,589 more in energy costs than a comparable solar-equipped home. CEC contends a homeowner can reduce their upfront costs by leasing a solar system, instead of purchasing one outright, with little or no out-of-pocket cost, and that such a homeowner will save up to 20% on their electric bills. CEC notes its analysis accounts for the California Public Utilities Commission’s recently revised net metering tariff, which reduces compensation rates for new solar customers.

4) Support and Opposition. The Rural County Representatives of California writes in support of this bill:

As these communities begin rebuilding, many insured homeowners are finding themselves underinsured. Rebuilding is even more difficult for uninsured homeowners. This is becoming an even larger problem because many insurers are canceling policies for those who live in high-fire risk areas and homeowners are finding that they cannot afford replacement policies. While it is admittedly less expensive to install solar panels on a newly-constructed home, even those reduced costs add up and make rebuilding harder and more expensive for those who have already lost everything and may not have the resources necessary to rebuild the life they once had.

The California Solar and Storage Association writes in opposition to this bill:

While AB 704 is purported to be relief to families needing to rebuild their homes, the reality of the bill is an attack on solar. Homes rebuilt after fires still need to follow the rest of the building standards – including today’s requirements for attic insulation, double-paned windows, and energy efficient appliances – many of which carry high price tags. Singling out rooftop solar as a burden to rebuilding homes while continuing to require new energy efficiency features for rebuilt homes is unjustified. In reality, rooftop solar makes housing more affordable by allowing the homeowner or tenant to buy less electricity from the utility, thus lowering their energy bills.

Analysis Prepared by: Nikita Koraddi / APPR. / (916) 319-2081

Date of Hearing: March 27, 2023

ASSEMBLY COMMITTEE ON NATURAL RESOURCES

Luz Rivas, Chair

ABPCA Bill Id:AB 704 (

Author:Jim Patterson) – As Introduced Ver:February 13, 2023

SUBJECT: Energy: building standards: photovoltaic requirements

SUMMARY: Specifies that any residential construction intended to “repair, restore, or replace” a residential building that was damaged or destroyed as a result of a disaster in an area in which the Governor has declared a state of emergency to comply with the state’s requirement for photovoltaic (PV) systems that were in effect at the time the building was originally constructed.

EXISTING LAW:

1. Requires the Air Resources Board (ARB), pursuant to California Global Warming Solutions Act of 2006 [AB 32 (Núñez), Chapter 488, Statutes of 2006], to adopt a statewide greenhouse gas (GHG) emissions limit equivalent to 1990 levels by 2020 and adopt regulations to achieve maximum technologically feasible and cost-effective GHG emission reductions. AB 32 authorizes ARB to permit the use of market-based compliance mechanisms to comply with GHG reduction regulations once specified conditions are met. Requires ARB to approve a statewide GHG emissions limit equivalent to 85% below the 1990 level by 2045. (Health and Safety Code § 38500-38599.11)
2. Requires the California Energy Commission (CEC) to establish energy efficiency standards for new residential and new nonresidential buildings. (Public Resources Code § 25402 et seq.)
   
3. Pursuant to the California Residential Building Code, specifies that any work, addition to, remodel, repair, renovation, or alteration of any building or structure may be defined as “new construction” when 50% or more of the exterior weight bearing walls are removed or demolished. (Part 2.5 of Title 24 of the California Code of Regulations)
   
4. Requires CEC to establish regulations to develop and implement a comprehensive program to achieve greater energy savings in California's existing residential and nonresidential building stock. The program is targeted at buildings that "fall significantly below" the current Title 24 energy efficiency standards. Requires the program to minimize the overall costs of establishing and implementing the energy efficiency program requirements. For residential buildings, specifies that the regulations ensure that the energy efficiency assessments, ratings, or improvements do not unreasonably or unnecessarily affect the home purchasing process or the ability of individuals to rent housing. (Public Resources Code § 25943)
   
5. Requires CEC to establish annual targets for statewide energy efficiency savings and demand reduction that will achieve a cumulative doubling of statewide energy efficiency savings in electricity and natural gas final end uses by January 1, 2030. (Public Resources Code § 25310)
   
6. Exempted, until January 1, 2023, residential construction intended to “repair, restore, or replace” a residential building that was damaged or destroyed as a result of a disaster in an area in which the Governor has declared a state of emergency before 2020 from the state’s requirement for PV systems, if:
   
   1. The income of the owner of the residential building is at or below the median income for the county in which the building is located;
      
   2. The construction does not exceed the square footage of the property at the time it was damaged;
      
   3. The new construction is located at the site of the home that was damaged; or,
      
   4. The owner of the residential building did not have code upgrade insurance at the time the property was damaged. (Public Resources Code § 25402.13)
      

THIS BILL:

1. Requires that residential construction intended to repair, restore, or replace a residential building damaged or destroyed as the result of a disaster in an area in which a state of emergency has been proclaimed to comply with requirements regarding PV systems that were in effect when the building was originally constructed.
   1. Specifies that this provision applies when following conditions are met:
      1. The income of the owner is at or below the median income for the county in which the residential building is located, as determined by the Department of Housing and Community Development state income limits;
      2. The construction does not exceed the square footage of the property at the time that it was damaged;
      3. The new construction is located on the site of the home that was damaged; and,
      4. The owner of the residential building did not have code upgrade insurance at the time the property was damaged.
   2. Sunsets this provision on January 1, 2027.
2. Requires CEC to collect data, to the extent feasible, from local permitting agencies on the use and application of the above provision. Requires CEC to report to the relevant policy committees on or before March 1, 2025 and March 1, 2026. Sunsets this provision on January 1, 2027.
3. Specifies that no reimbursement is required by this bill pursuant to Section 6 of Article XIII B of the California Constitution because a local agency or school district has the authority to levy service charges, fees, or assessments sufficient to pay for the program or level of service mandated by the bill, as specified.

FISCAL EFFECT: Unknown

COMMENTS:

1. Author’s statement: “AB 704 is an appropriate, fair, and limited measure to help ease the burden of rebuilding one’s life after all was destroyed by a wildfire.”
2. California’s solar standards. The 2019 Building Energy Efficiency Standards went into effect on January 1, 2020. The new standards are the first in the nation to require PV systems for new construction. The standards also include improved thermal building envelope standards (i.e., insulating the interior), residential and nonresidential ventilation requirements, and nonresidential lighting requirements. For residential buildings, the standards are expected to result in about 53% less energy use than under the 2016 standards. The CEC further estimates that the new standards will reduce GHG emissions by 700,000 metric tons over three years.

Statute requires that CEC’s standards must be “cost-effective.” Moreover, unlike other building standards, solar earns money for homeowners as their homes generate electricity. CEC estimates that based on a 30-year mortgage, the new standards will add about $40 per month in costs and result in about $80 per month in reduced energy costs. On average, a solar system adds about $9,500 to the cost of a new home and will result in a savings of $19,000 in energy costs over 30 years. The up-front costs for solar are expected to continue to decrease.

CEC established a few exemptions to the new solar requirement. Primarily, homes that are shaded by trees, hills, other structures, etc. are not required to install solar. This may exclude a number of homes impacted by fires in wooded areas. Homeowners in areas with community solar programs are also exempt from the requirement. Additionally, reduced system size is permitted for low-rise residential with two stories and for low-rise multifamily or single-family homes with three or more stories.

1. Emergency declarations. Unfortunately, California has had a large number of emergency declarations over the last several years, primarily due to fires. This bill would apply to any home damaged or destroyed in a disaster in an area in which the Governor has declared a state of emergency. On March 2^nd, the Governor declared a state of emergency in 13 counties due to severe winter storms. In July 2022, the Governor declared a state of emergency in Siskiyou County due to fires.
2. Suggested amendment. This bill reinstates a list of criteria to qualify for an exemption from the state’s PV requirement. Currently, the bill states that “one or more” of the criteria must be met. The committee may wish to amend the bill to clarify that all of the criteria must be met in order to qualify for an exemption.
3. Previous legislation:
   1. AB 178 (Dahle, Chapter 259, Statutes of 2019) exempted, until January 1, 2023, residential construction from complying with the solar requirements in the recently adopted building standards when the construction is in response to a disaster in an area in which a state of emergency has been proclaimed by the Governor.
   2. AB 1078 (Patterson, 2022) would have extended the exemption established by AB 178 for one year, until January 1, 2024. This bill was vetoed by the Governor.

REGISTERED SUPPORT / OPPOSITION:

Support

Rural County Representatives of California

Opposition

None on file

Analysis Prepared by: Elizabeth MacMillan / NAT. RES. /