New Legislation Enhances Energy Efficiency and Consumer Protection Standards for HVAC Systems

Bill mandates further consumer protection and energy efficiency accounting

Co-author: Hanna Grene

California is a national leader in establishing building energy efficiency standards. In the area of heating, ventilation and air conditioning (HVAC), the state maintains aggressive performance codes and standards for equipment, including the permitting and inspection of all installations.

These appliance and installation standards are codified in Title 20 (Appliance Efficiency Standards) and Title 24, Part 6 (Building Energy Efficiency Standards) of the California Code of Regulations. However, lack of compliance is a huge issue, leading to newly approved legislation, drawing on home performance expertise at the Center for Sustainable Energy.

Residential HVAC systems deserve special attention because they account for 31% of California home energy consumptionnearly as much as home appliances, electronics and lighting combined. Despite the clear requirements, almost 90 percent of residential HVAC replacements and repairs go unpermitted, and therefore uninspected by local building departments. Further, the California Energy Commission estimates up to 50 percent are not properly installed.

Why does it matter?

  • The Energy Commission estimates that a 90% HVAC permit compliance rate would achieve approximately 130 megawatts of annual peak demand energy savings.
  • Pulling a permit, and thereby triggering the verification process, ensures homeowners are receiving the full energy- and cost-savings from their new, safely installed HVAC systems.

A CSE survey of home performance contractors and building department staff found that projects go unpermitted largely because homeowners do not understand or are unaware that permits are required. In some cases, unethical contractors may discourage homeowners from pulling permits to reduce project costs, contributing to an “underground economy.” Similarly, many permits are pulled but never closed, in which case the homeowner pays for an inspection that is never provided, leaving the systems essentially unpermitted. 

Senator Wolk takes action

To tackle this issue head-on, the California legislature passed Senate Bill (SB) 1414 on August 25, 2016, with a final, unanimous vote of 39-0. Longtime energy efficiency and solar champion Senator Lois Wolk (Senate District 3) authored the bill.

SB 1414 puts two policies in place to increase the rate of HVAC permit compliance:

  1. Mandates utility ratepayer-funded HVAC rebate programs to require proof of permit closure before funds can be issued to customers or applicants.
  2. By January 1, 2019, the Energy Commission, in collaboration with local building officials and other key stakeholders, is required to approve a plan that promotes greater permit compliance with associated HVAC sales and installations. The bill also authorizes the commission to adopt regulations consistent with the findings of that plan.

“Ratepayer-funded energy efficiency programs are critical to the state’s energy and environmental policies,” Wolk said in a press release. “SB 1414 will help the state meet its energy efficiency goals and ensure customers receive the full benefits of the energy efficiency upgrades they purchase.”

We salute Senator Wolk for tackling these issues with SB 1414 and for her leadership throughout her tenure in the senate. The unanimous vote to pass SB 1414 demonstrates the widespread support of her colleagues for improving energy efficiency and the effectiveness of energy codes and standards.

CSE also thanks the bill's supporters

  • Air-conditioning and Refrigeration Contractors Association
  • Air-conditioning Sheet Metal Association
  • Building Owners & Managers Association of California
  • California Apartment Association
  • California Building Industry Association
  • California Building Officials
  • California Business Properties Association
  • California Chapters of the National Electrical Contractors Association
  • California Legislative Council of the Plumbing, Heating & Piping Industry
  • California Retailers Association
  • California State Pipe Trades Council
  • Environmental Defense Fund
  • International Council of Shopping Centers
  • NAIOP of California, Commercial Real Estate Association
  • Retail Industry Leaders Association
  • Sierra Club California
  • The Utility Reform Network
  • U.S. Green Building Council, California
  • Western States Council of Sheet Metal Workers

Read more about CSE’s efforts to streamline HVAC permit processes.

Homeowners considering a HVAC replacement — look to the Contractors State Licensing Board HVAC Ambassador Program for helpful tips on the financial and energy-saving benefits of proper HVAC installation and inspection.

About Marissa Spata

Marissa is a building performance expert who assists local governments with California's Building Energy Efficiency Standards, CALGreen and zero net energy compliance.