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    Heat Pumps Are The New Solar Panels: California to Help Spur Development and Market Growth of High Efficiency Building Heating Technology

    By Jennifer Tung

    Last week, Governor Brown signed two bills into law intended to change the way Californians heat both new and existing buildings: AB 3232 and SB 1477.

    AB 3232 requires the Energy Commission to assess, by January 1, 2021, the potential for reducing greenhouse gas (GHG) emissions from California’s residential and commercial buildings to 40% below 1990 levels by 2030. The assessment will include the cost-effectiveness of reducing GHG emissions from space and water heating technologies.

    SB 1477 creates two new programs focused on growing the market for clean and efficient heating technologies: TECH and BUILD. $50 million dollars from utility cap-and-trade revenue will be allocated annually to these two programs through 2023.

    Through the TECH (Technology and Equipment for Clean Heating) Initiative, the Public Utilities Commission (PUC) will identify and target early-stage space and water heating technologies that would assist California in meeting its GHG reduction goals. The PUC, in coordination with the Energy Commission, will then develop guidelines and evaluation metrics, provide job training and employment opportunities, and implement outreach strategies for hard-to-reach consumers.

    The BUILD (Building Initiative for Low-Emissions Development) program, patterned after the New Solar Homes Partnership (NSHP) program, incentivizes the use of low-emissions heating technologies like high-efficiency heat pumps and solar thermal systems. Backers of this law hope that BUILD will help decrease the cost of clean heating options (and dramatically increase their market share) the way the NSHP and the California Solar Initiative did for rooftop solar panels.

    Contractors and developers alike should stay apprised of the state’s efforts to increase consumer access to high efficiency heating technology, as these efforts will shape future regulations and directly influence consumer demand. Stay tuned to future HuntLaw Updates, as Hunt Ortmann continues to monitor these developments to keep you informed and up to date.

    Jennifer Tung is an associate attorney at Hunt Ortmann, and focuses her practice on a broad array of matters, including breach of contract claims and construction defect litigation. Ms. Tung has represented a diverse client base including, owners, contractors, transportation companies, insurers, universities, and health care providers. If you would like additional information about the subject matter of this bulletin, please contact Ms. Tung at