There have been several recent developments on the clean energy front in the US, including newly allocated federal funding for energy efficiency upgrades in homes and businesses, the return of solar-use easements in California, and a mandate that all new residential and commercial construction in Marin County, California be all-electric.

The Biden administration recently announced that it will be allocating $250 million in formula funding for energy efficiency upgrades and retrofits of commercial and residential buildings through the Energy Efficiency Revolving Loan Fund Capitalization Grant Program, an initiative of the recent infrastructure legislation.

The funds will be made available to states and territories to establish revolving loan funds for clean energy projects, including energy audits, energy efficiency upgrades and retrofits of residential and commercial buildings. States can also use up to 25 percent of the resources to provide grants and technical assistance to low-income homeowners and small businesses.

The Energy Department will work with states to ensure that revolving loan fund programs prioritize communities that have previously faced underinvestment in energy efficiency deployment. Forty percent of the funds will be allocated to all state energy offices, while the other 60 percent will go to a subset of priority states to foster greater impact in states with higher energy consumption and carbon emissions.

As part of California's annual local government omnibus bill, the California governor recently signed into law SB 1489, re-enacting California Government Code Section 51255.1, which was originally enacted in 2011 but allowed to sunset in 2020. California law provides certain methods to receive reduced property taxes in exchange for an agreement with a city or county to limit use of the land to agricultural or agriculture-compatible activities. There is a substantial cost if a party wishes to cancel such a contract in order to allow it to use the land in other ways. The re-enacted law facilitates development of solar energy facilities on such properties by allowing recission of the contract at half the cost of cancelling in order to enter into a solar-use easement with the local government and use the land for solar energy facilities. The law is intended to encourage and facilitate solar energy development on marginal and impaired farmland.

Marin County, California's supervisors recently approved an ordinance intended to cut greenhouse gas emissions by reducing the use of natural gas and transitioning off of fossil fuels. The highest profile of the new requirements is the mandate that, effective January 1, 2023, all new residential and commercial construction in Marin County must be all-electric. Marin County is the most recent of 60 California jurisdictions requiring all-electric buildings for new construction.

The ordinance also includes stricter energy efficiency requirements for additions, alterations, and remodels, and increased access to electric vehicle charging stations for people living in multifamily housing. The stricter rules for additions, alterations, and remodels apply to single-family homes over 750 square feet. Owners will be allowed to select from a menu of energy efficiency and electrification measures. The county’s ordinance mandates upgrading of electric vehicle charging capability at multifamily housing units when parking lots are modified.

The county is also looking at how to incentivize people to replace existing gas appliances with electric when the appliances reach end of life.

By some estimates, buildings contribute up to 40% of global greenhouse gas (GHG) emissions, a significant contributing factor in climate change. Reducing GHG emissions is a crucial step in meeting the Paris Agreement goals to combat climate change. The developments above are just a few examples of efforts across the nation to increase the use of clean energy and cut greenhouse gas emissions.

For more information about green real estate, see Practice Note, Owning and Leasing Green Real Estate and Article, Green Buildings: Laws and Practices. For more information about recent federal climate change policy, see Biden Administration Energy and Climate Change Policies and Regulations: 2021 Tracker and Biden Administration Energy and Climate Change Policies and Regulations: 2022 Tracker.

Be on the lookout for more resources in this area from Practical Law Real Estate in the near future.