In California, lighting systems in commercial buildings account for an average of 35 to 40 percent of a facility’s total electrical use. That makes lighting systems the greatest target for potential savings as the state aims to achieve zero net energy in commercial buildings by 2030. Here’s what you need to know to get compliant. 

In California, lighting systems in commercial buildings account for an average of 35 to 40 percent of a facility’s total electrical use. That makes lighting systems the greatest target for potential savings as the state aims to achieve zero net energy in commercial buildings by 2030.

On July 1, after a 6-month delay, the California Energy Commission took a critical step toward that goal by updating Title 24 energy efficiency standards. The revised code mandates that lights in commercial buildings use less power and automatically adjust themselves by dimming or shutting off when nobody’s in the space, among other measures. Other systems, including heating, air conditioning, ventilation and water heating, also have new requirements. But as the largest load, lighting changes stand to provide a massive impact.

“That’s the big one everyone’s going to have to get their arms around,” says Chris Schempp, director of project management for real estate services giant CBRE in Sacramento. “Before these changes, if you wanted to reuse the lights, you could. The new standards may require, depending on the age of existing fixtures, that you replace the lights to install controls that old fixtures might not have.”

The rules are many, and a cloud of uncertainty is hanging over a range of industries, from commercial real estate and construction to building management. Schempp has yet to hear any feedback from clients who submitted permits after July 1. There are tons of new forms to fill out, new tests to be done, new questions about compliance and cost-benefits. It’s too early to get exact answers, but if you’re a property owner, you should definitely start asking questions, starting with these:

What are the key changes in the revised lighting requirements?

Title 24 gets periodic updates to keep up with changes in technology. Under the newest standards, the state expects commercial buildings to use 30 percent less energy than they did under the previous standards, which have been in place since 2008.

For property owners, that means higher costs upfront in the areas of design, construction, installation, equipment and testing. It takes green to go green, but the state claims property owners will reap financial rewards later with reduced energy costs.

According to the Energy Commission, critical changes to the standards include:

Commercial building interiors must have advanced, multilevel lighting controls and sensors. The controls now need to have three intermediate levels (instead of one) to dim depending on occupancy and available natural light.

When an owner or tenant changes 10 percent of existing lighting (compared to the previous 50 percent), all the fixtures in the entire space need to be replaced to comply with new standards. This is just one of the potential triggers.

In office buildings, electric circuits that serve plug loads must have automatic shut-off controls.

Warehouse and library aisles plus corridors and stairwells in lodging and multifamily buildings must have occupancy sensors.

Lighting control systems must now be acceptance-tested. State-certified inspectors must verify that lighting systems meet  the state’s Title 24 requirements. Acceptance testing was part of the 2008 standards but was not equally enforced across jurisdictions.

How much will the new energy-efficiency standards cost me?

The new standards will definitely increase construction and building operation costs. But it’s too early to get anything more than estimates, which vary by project. In a May 2014 report, Cushman & Wakefield, the L.A.-based commercial real estate services firm, predicted the following cost increases as a result of the revisions:

• 15 to 20 percent for architecture and engineering administration,
• 5 to 10 percent for new construction, and
• 10 to 15 percent for tenant improvement projects.

The numbers were gathered after surveying various contractors, engineers and architects, but there is no hard and fast rule for the cost increase, says Hank Warner, director of project management for Cushman & Wakefield.

What about property values?

Most contractors agree that new projects should be relatively simple. Designers can include these new requirements in the blueprints. The bigger challenge will come from tenant improvements. Retrofits to existing buildings may raise issues such as who should pay (tenant vs. landlord). This will depend largely on the lease terms and conditions. But what if a single upgrade by one tenant affects the entire building?

“How are we going to practically achieve this without disrupting tenants?” asks Fran McDermott, executive director of the National Electrical Contractors Association’s Greater Sacramento Chapter. “Code changes are always difficult, and the sharp edges need to be sanded off.”

Some stakeholders in the commercial sector feel blindsided by the updates. The new standards devalued all existing real estate, says Carol Cunha, commercial division director for the Sacramento Association of Realtors. The revised building code, she says, lacks clarity, which means every building department throughout California might interpret the code differently. Hence, she has been advising her clients to hold off on upgrades until the dust clears.

“It’s turned the carrot of energy management programs into a hammer,” Cunha says. “How many roadblocks are they going to throw at us to make it more difficult to do business in California?”

When will I see a return on my investment?

For the past 40 years, California has been leading America’s energy efficiency charge. Since then, energy consumption for the rest of the country has doubled. But California has managed to keep energy use per person around the same level it was in the 1970s, when the California Energy Code (Title 24) was created.

“Key to our efforts is reducing electricity consumption through efficiency standards for buildings and appliances,” Gov. Jerry Brown said in his 2013 State of the State Address. “Over the last three decades, these pioneering efforts have saved Californians $65 billion. And we are not through yet.”

Michael Neils of M. Neils Engineering Inc. says the new code measures must be cost effective and are expected to break even in a 15-year economic life cycle or less. That said, the results of the most recent updates remain to be seen.

“This one is a little more disruptive than changes we’ve had in the past, so there’s a lot more noise about it,” says Frank Schetter of Schetter Electric, who’s also on the Contractor State Licensing Board. “But eventually, it’ll sort itself out.”

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