Politics
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June 6, 2022
California Title 24 Solar Requirements - Why It’s Important for Real Estate Developers
Austin Young

The state of California has set a goal of running on 100% renewable energy by 2045. In order to achieve that goal, they have enacted many policies to incentivize and mandate individuals and businesses to do their part in shifting to clean energy. These policies and codes will bring about a change in the way of working and living for residents, but also change the economics of real estate in many ways. Title 24 is one of the many solutions established by the state to move new and existing properties in the direction of renewable energy. In this blog post, we’ll cover the California Title 24 solar requirements, especially what you need to know for multifamily housing.

What is Title 24?

Title 24 is part of California’s building standard code, and it sets the Building Energy Efficiency Standards. It applies to both new construction and alteration of existing properties. The California Energy Commission (CEC) updates the standards every three years, with the last update happening in 2019 and the next one scheduled for 2022. These regular Title 24 updates are essential to keep in time with rapidly evolving developments in efficiency technology. The 2022 Title 24 requirements have been created and approved for the California Building Standards Code, meaning they will go into effect on January 1, 2023.

While the CEC is the leading energy policy and planning agency in California, they collaborate with stakeholders through a public and transparent process to update energy policies. In addition to meeting the state’s long-term renewable energy goals, their goal with these policies is to reduce energy costs, cut greenhouse gas emissions, and ensure a reliable power supply. Additionally, Title 24 is intended to bring those who own, manage, and live in the buildings together to create more energy efficiency. There are different mandates for commercial and residential buildings, with the latter warranting attention to how some building functions like lighting and ventilation are designed and operated.

What Are the Requirements for Title 24?

The state continues to increase strict mandates about energy efficiency as characterized in the new 2019 Title 24 code. Before this change, the 2016 Title 24 solar requirements gave multifamily property owners little to no incentive to adopt onsite renewable energy. Understandably, multifamily real estate developers couldn’t carry the cost of transitioning to solar power, and there was not an efficient and fair way to monetize their investment through their residents’ consumption. But, with new technology in Ivy’s Virtual Grid software, multifamily housing can now benefit from an additional net operating income and contribute to the state’s clean energy goals.

The timing of technology advancements is key because these solar requirements will only continue to get stricter as we approach the 2045 California state goal. Most developers and apartment owners view this as a problem, but some are seeing the opportunity to add a new revenue stream to their properties by producing energy through shared solar assets and distributing that energy to their residents.

Title 24 Requirements for Multifamily Housing Structures

Here are some of the changes that are required by the latest Title 24 update that came into effect in January 2020, as well as new requirements for January 2023:

  • The 2019 Title 24 solar requirements had segregated regulations for single-family and multifamily structures. Although the new regulations for both categories seem similar now, multifamily properties will eventually have a unique set of Title 24 requirements and will be in a category of their own.
  • Solar zones whose area is not less than 15% of the total roof area of a building (without the skylight area) to be installed. These solar zones can be located either on the roof, the overhang of the building, or the overhang of any other structure that is within a distance of 250 feet. This applies to low-rise multifamily buildings and is inclusive of structures with mixed occupancy.
  • Low-rise multifamily buildings that have interior common areas within a single structure require up to 20% of the floor area to be controlled by an occupant sensor.
  • The lighting requirements as per the latest update call for permanent labels displaying maximum rate wattage, independent manual control (separate controls for each room), provisions for multi-level lighting control, improved shutoff controls (including occupant sensors, automatic time switches, and other similar controls), and daylighting controls among the others.
  • Multifamily properties are required to provide onsite renewable energy. This new mandate can require a developer to offset roughly 50-60% of the total community energy consumption.
  • The 2022 Title 24 solar requirements will expand to high-rise multifamily apartments and condos, hotels, commercial tenant spaces, offices, retail and grocery stores, restaurants, schools, and civic buildings. Also, the 2022 standards will apply to more existing homes and businesses, especially the 60% of California’s apartments that were built before the state’s first energy standards.

Some of the upgrades called for by the latest updates can be a game-changer in the long run when it comes to creating improved building functionality. When you incorporate the right system, adding solar panels can be cost-effective, easy to manage, and actually generate a new revenue stream for your multifamily property.

What is the California Solar Mandate?

Section 6 of Title 24 is the very first solar mandate in the US. This California solar mandate calls for solar energy provisions for all newly built residential structures. Starting in 2023, this mandate will apply to more residential and commercial structures, including an expansion to existing buildings. Alternatively, the 2019 Title 24 solar requirements that are currently in effect focused on new construction.

The solar mandate includes installing solar panels for electricity and water heating needs to create more energy efficiency and savings on utility bills. The mandate is an encouraging factor for the rise of practices of shared solar distribution systems in multifamily dwellings. However, understanding and achieving compliance with section 6 of Title 24 requires a depth of knowledge that comes with years of experience. Our team at Ivy Energy can provide expert guidance and support as you bring your multifamily property into compliance with California Title 24 solar requirements.

Is it Mandatory to Have Solar Panels in California?

The CEC states, “The word ‘mandate’ does not precisely describe the 2019 Standards PV requirement, as it implies a rigid and inflexible set of requirements.” While Title 24 is pushing single-family and multifamily residential to be more energy-efficient and rely on renewable energy, there are exceptions to the solar requirements. For example, a property with insufficient solar availability due to roof size or shading could not meet the Title 24 solar requirements due to reasons out of their control. The CEC maintains builder and homeowner choice as an essential part of their approach to building energy efficiency standards.

What is the California Net Metering Policy?

Net Metering is an important incentive supporting the installation of solar panels. Net Energy Metering (NEM) is the policy enabling homeowners to export their excess solar power to the grid in exchange for credits on their utility bills. California also has a Virtual Net Energy Metering (VNEM) policy that allows multifamily housing to do the same. Under the VNEM policy, multifamily property owners can use Ivy’s Virtual Grid software to equitably distribute the benefits of onsite solar according to real-time resident energy consumption, solar availability, and avoided utility costs. This is a must for real estate developers because it provides a fair and efficient solution to monetizing their solar panel investment.

Building and Home Requirements

As of 2020, California’s Title 24 solar requirements mandate that all newly constructed single-family homes and low-rise (under three stories) multifamily install solar panels. The size of the required solar system varies depending on floor area and climate zone. But, the solar panel system must at least generate enough solar power to cover the annual energy usage of the home. Title 24 also includes other requirements to make properties more energy-efficient, which helps reduce the amount of required solar panels.

Conclusion

This article only touches on a couple of key changes that came with the 2019 Title 24 update, and more changes are coming with the 2022 update. The complexity of the requirements and exceptions depend on very specific details about your property, so it’s hard to provide a one-size-fits-all summary of the Title 24 policy.

If you are the owner of a multifamily housing facility, Ivy Energy can help you meet these compliance requirements in a hassle-free and beneficial manner. We provide turnkey solutions for ensuring that property owners can get the most out of their solar assets. Ivy helps residents of multifamily structures get easy access to solar energy. Moreover, the solutions provided by Ivy make it easier for its users to understand their energy consumption and expenses through a straightforward and transparent process. Ivy brings the best of technology in the area of solar energy and related solutions to the table to make it simpler for all to comply with Title 24. Call us today to run a revenue forecast for your multifamily property and see how much you could save with solar. https://www.ivy-energy.com/

Did you know?

CA has passed laws like AB802 and Title 24, mandating renewable energy on certain multi-family properties?

Click Here to learn more about how you can comply while turning a profit with Ivy’s Virtual Grid alternative to traditional Sub Metering.

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