Industry Fights for ‘Zero Net Energy’ Regulations in California

As residential builders in California move toward meeting state energy efficiency standards that will eventually require residential buildings to produce as much energy as they consume, the Western Propane Gas Association (WPGA) is emphasizing the role that propane can play in meeting the goal known as “zero net energy.”

Zero Net Energy (ZNE) is a term meaning that a building structure generates as much energy as it consumes, measured over a one-year period. More specifically, according to the U.S. Department of Energy, a zero net energy building “produces enough renewable energy to meet its own annual energy consumption requirements, thereby reducing the use of non-renewable energy in the building sector.” The California Energy Commission (CEC), through Title 24 of the California Code of Regulations, has set a goal for all new residential construction in the state to be zero net energy by 2020, for a 17% improvement toward ZNE for existing residential homes, and for all new commercial construction to be zero net energy by 2030.

Alex Gallard, in-house counsel for Blue Star Gas (Santa Rosa, Calif.), researched and obtained knowledge on zero net energy policies for WPGA to assist in developing its strategy. Gallard told BPN that the zero net energy goal encourages the use of renewable energy such as solar. How does a building generate energy? “Simple: It’s all about solar,” said Jeff Stewart, president of Blue Star Gas. He explained that Title 24 is part of California’s SB 350, which mandates that the state must generate half of its electricity from renewable sources such as solar and wind by 2030.

To measure a building’s ZNE compliance, CEC uses a measurement it calls the time-dependent value (TDV) of energy, which assigns a value to different energies based on type of utility, location, time of day, and by the type of construction, to show the cost to consumers and the utility system. CEC uses TDV as the basis for setting maximum energy budgets for buildings and valuing the energy performance tradeoffs made in building designs, according to WPGA.

Gallard mentioned news from earlier this year that a bipartisan group of 17 governors signed the Governors’ Accord for a New Energy Future, a joint commitment to take action to promote clean energy, clean transportation choices, a modern electrical grid, and plan for a new energy future. “It’s a common trend for states to update their building codes to make them more efficient,” Gallard noted.

He emphasized that the propane industry should focus on how propane will fit into this new world of energy efficiency. He believes that the promotion of propane heating appliances will be a crucial step in getting propane recognized as a product that can help homes move toward meeting the zero net energy goal. A joint working group of WPGA and the National Propane Gas Association (NPGA) is developing a broader strategy for how propane marketers may preserve gallons in states where ZNE strategies will be deployed.

“If you can show propane is not an exorbitant energy source from a budget perspective, and that it’s also an efficient source, then the likelihood of utilizing solar panels becomes less,” Gallard explained.

The Propane Education & Research Council (PERC) is also involved in the project with WPGA and NPGA in several ways: The council is helping set the strategy to combat the anti-carbon sentiment in ZNE by showing how propane equipment can meet the goals of ZNE in protecting the environment and providing a workable solution economically. It is also helping provide the data useful to NPGA and WPGA to support the strategy and is “continuing to develop equipment and systems that support the industry as we elevate the conversation on ZNE,” said Tucker Perkins, PERC’s chief business development officer. PERC is also providing photographs and case studies to marketers that help them position propane with builders and homeowners with talking points specific to ZNE.

Stewart is a strong believer in PERC’s product commercialization efforts. He noted that PERC has invested substantial resources in combined heat and power units from Yanmar and other companies. The units use a heat exchanger to increase efficiencies and are an example of a product that can help meet zero net energy requirements. “It doesn’t necessarily have to be solar,” Stewart stressed.

Stewart and a group from WPGA met with the CEC on June 1 to explain the limitations of CEC’s TDV calculations, including the fact that the CEC used EIA’s Annual Energy Outlook data, but did not collect PADD 5 data and did not collect data for summer propane pricing. The group also argued that the TDV modeling results for propane price forecasts that CEC proposed are much too high in comparison with WPGA member data. WPGA provided additional data to CEC in hopes to better address errors in the forecast.

What else do propane marketers need to know about zero net energy regulations? “That it’s here, and here to stay,” Gallard stated. “We’re in an ever-changing energy environment where people are looking to conserve and be more efficient. We need to fill that niche, too.” —Daryl Lubinsky