On May 24 the California Energy Commission (CEC) adopted Guiding Principles for the California Electric Homes Program (CalEHP). CalEHP was created pursuant to Assembly Bill 137 (Ting, Stats. 2021, Ch. 77), which directed the CEC to implement and administer a statewide program in encourage the construction of new multifamily and single-family market-rate all-electric residential buildings and residential energy storage systems, with a $75 million budget authorized in the Budget Act of 2021.
CalEHP will provide incentives for new multifamily and single-family residential buildings. The focus will be on market-rate buildings, to complement the CEC’s BUILD Program, which provides incentives for low-income rental housing. Following statutory direction, the program will center on supporting all-electric building projects that exceed current state and local building code standards and storage technologies that would not otherwise be included in housing projects. The CEC will conduct a competitive solicitation process and contract with a third-party administrator to implement this program.
The adopted Guiding Principles will provide overarching objectives for program design, implementation and administration:
Market Transformation: The primary goal is to spur significant market adoption of new all-electric residential buildings and installation of residential energy storage systems. Building Greenhouse Gas (GHG) Reduction: California buildings contribute to 25% of the state’s GHG emissions. This program will help California reach its 2030 GHG reduction goals. Energy Equity and Disadvantaged Communities: The program design should reflect state policy supporting environmental improvement and economic advancement for at-risk communities, and reducing the disproportionate environmental effects of pollution in California communities, including tribal communities. Program Eligibility: Incentives will be available for new all-electric residential buildings and energy storage in new market-rate developments. Buildings that qualify for the BUILD program, which targets new low-income all-electric housing, are not eligible under CalEHP. Speed, Program Simplicity, and Quality: Reducing greenhouse gas emissions is a priority. To accelerate market transformation, the program should launch quickly and provide a simple and effective user experience, e.g. fewer documents for payment claims, simpler incentive structures, reasonable participant support, and other streamlined program features. Outreach and Public Engagement: The program design should incorporate best practices for stakeholder engagement and ensure adequate information sharing and collaboration. Program marketing should be signed to reach key stakeholders and potential applicants across the state. Fiscal Responsibility: The program administrator should consider cost efficiencies, ensuring appropriate use of funds, and leveraging efforts to streamline program administration. Oversight mechanisms will ensure that award recipients properly use program funds. Incentive Layering: The program will allow incentive layering to help spur faster market adoption. Incentive funds from multiple sources can be leveraged, but cannot exceed total cost to the builder. Program Reporting: Program development and implementation data will be made available to the public and the CEC. Data will include amount of funding available for potential applicants and project details such as location, incentive amounts and project characteristics. Statewide Availability of Incentives: Simplicity of incentive design and broad market adoption are priorities. As reasonable possible, CalEHP incentives should be offered in localities with different approaches to local building codes.To follow future CalEHP program development, see the CEC’s CalEHP program website.
Contact: Lynn Haug or Chase Maxwell
