Carbon is infiltrating the atmosphere, and the built environment is a primary perpetrator. Need proof? Buildings generate nearly 40% of the world’s annual global CO2 emissions.

The effort to reduce these emissions, commonly referred to as decarbonization, centers on halting them from entering the atmosphere before they are ever released. The path to decarbonization yields an intricate labyrinth complete with legislative challenges, cost considerations, political divisiveness, grid overhauls, and more. For full-scale results, decarbonization can't be done a la carte, it must be implemented at every level, from production to consumption, through the power grid, supply chain, end-users, etc.

For the sake of our future, decarbonization is no longer a want; it’s a necessity. Twenty-four states and the District of Columbia have established economy-wide greenhouse gas emissions targets, thus buildings must decarbonize to adhere to the law. And, perhaps more importantly, decarbonization provides a solution to climate change, which was recently quantified in a report issued by the IPCC that states human influence has unequivocally warmed the atmosphere, ocean, and land — and widespread, unprecedented changes have already occurred.

California Love

California, the third-largest state in America, is quite environmentally conscious. While the state boasts 90% gas distribution throughout, and more than 40% of its electric consumers fall in low- and moderate-income brackets, the Golden State's policymakers have not shied away from the challenge. Legislators have set a goal to be carbon-free by 2045, as outlined in the 2022 California Building Energy Efficiency Standards, which will take effect Jan. 1, 2023.  

To meet this goal, the state will need to roughly triple its current electricity grid capacity and build up to 6 gigawatts (GW) of new renewable and storage resources annually.

When it comes to transitioning to a carbon-free electric system, the California Energy Commission (CEC) insists the juice is worth the squeeze. In addition to social benefits, such as less air pollution and improved public health, the state's pending energy evolution is expected to create thousands of jobs manufacturing and installing wind turbines and solar panels, developing new clean energy technologies, and more.

“The threat posed by climate change requires us to think and act boldly today,” said David Hochschild, chair, CEC. “Building a carbon-free grid is foundational to achieving our climate goals and will provide well-paying jobs and cleaner air to those who need it most.”

Load Flexibility

Load flexibility, or the ability to shape the demand curve in real-time and shift energy usage to low-carbon times, is a key component to California — and the nation’s — decarbonized future.

The use of grid-interactive technologies enables end-users to more intelligently consume energy. Load flexibility programs encourage the replacement of furnaces and gas water heaters with heat pumps, the proactive reduction of energy use during peak times, the precooling of buildings prior to peak times, etc. Of course, buildings must implement façade changes, including installing the proper insulation, changing out the lighting, sealing the building envelope, etc., to ensure they are adequately cashing in on such energy savings.  

California has proactively taken numerous steps to prioritize its use of load flexibility. These include:

  1. Implementing a building code that values time-dependent use of energy, technologies that are efficient during the peak period, and low-carbon energy equipment. Compliance credits are available for facilities with on-site storage and load-flexible water heaters/HVAC systems.
  2. Through SB 49, California legislators have regulatory authority to require all future appliance stock comes equipped with load flexibility technologies. These devices include but aren’t limited to, water heaters, pool pumps, smart thermostats, and EV chargers.
  3. The CEC is creating a platform where utilities will be required to post their time-dependent rates in a machine-readable format on the internet/cloud that will support application programming interfaces (APIs). This will allow third parties to create apps that will recognize/utilize rates in real-time. In addition to rate signals, the program, which is in its infancy, will offer a carbon content signal designed to identify grid congestion. Prices and carbon/liability signals can be sent directly to the devices through automated, cloud-based platforms, allowing such equipment to self-police their energy usage.
  4. A four-year, $16 million consortium, including the Berkeley Lab, the Cal Flexible Demand Hub, and the U.S. Department of Energy (DOE), has been created to spawn creative thinking around relevant technology and business models.

The State of the Union

While California is certainly an early adopter, there's plenty of decarbonization bandwidth for all of America. So, what specific steps can be taken locally to facilitate this transition?

  1. Codes organizations must begin to develop guidelines that prioritize all-electric construction. Engineers can and should follow suit through their specifications and designs.
  2. The Biden administration enthusiastically supports electrification and is working on programs designed to bring capital to this space via public-private partnerships. If you’re looking to personally invest in a sector, the heat pump market is looking mighty bullish.
  3. The national building stock only changes approximately 2% per year, so the majority of buildings currently in existence will remain in use in 2045. Therefore, we can’t rely solely on new construction equipped with cutting-edge technologies. Building performance standards that set real, individualized energy usage targets should be strongly considered. Those who retrofit accordingly and meet or exceed such benchmarks should be rewarded. Those who don’t must face a consequence.
  4. Firms and policymakers must figure out ways to bring low-cost capital to this space. Models do exist in the form of renewable energies, like solar, but this approach may not be replicable in all states.
  5. Utilities must give more clout to time-dependent rates, offering value propositions to a marketplace that uses energy more sensibly. Utilities must also be more transparent with their rates. This information is available, so why not make it as visible as possible?


Whether you like it or not, America is pivoting toward electrification. This distributed energy future, driven by automation that reactively operates in real-time, is relevant in all markets — all the way down to individual devices.

There’s an amazing amount of creativity in this space right now. The tools are available, and the technical ability exists — California’s policy offers a living, breathing case study.

Through assertive building codes, future-forward thinking, and a healthy dose of intuitiveness, we can reduce our energy footprint. The competence and ability are readily available. The question is, are we willing to put them to use?