California’s Draft Building Performance Standard Covers Buildings Above 50,000 Square Feet, While Its New Remote-Inspection Right Stops Short of Commercial
California’s draft statewide building performance standard would measure commercial and multifamily buildings larger than 50,000 square feet on site energy use intensity and on onsite greenhouse gas intensity. Neither figure moves when a battery is installed.
Wood Mackenzie recorded 97.7 MW of US commercial and industrial storage installed in the first quarter of 2026, roughly 75 MW of it in California. Whatever rule the state writes for large buildings applies to the majority of the segment by volume.
The document is a draft strategy, not a regulation. The California Energy Commission released its draft building energy performance strategy under Senate Bill 48. Long-term targets would land in 2045, with interim compliance checkpoints every five years. The report sets direction; an enforceable standard would require a later legislative or regulatory vehicle.
Penalty design. Owners would be barred from passing noncompliance penalties through to residential and small commercial tenants, and collected penalties would be routed into performance upgrades for buildings serving low-income communities. The cost of missing a target stays with the party that controls the capital budget.
Site energy use intensity does not see peak demand. It counts delivered energy per square foot per year. A grid-charged battery raises that number slightly, because round-trip losses register on the site meter. Where a battery is paired with on-site solar that would otherwise export, purchased energy can fall instead. Either way the effect is a rounding item against annual building consumption.
Onsite greenhouse gas intensity counts combustion at the building. A battery does not touch it unless it makes removing gas equipment or reducing generator runtime practical.
The alternative the draft flags. The CEC noted possible future demand-management metrics. It did not name one. A metric of that kind would score the behavior storage performs, and would convert an asset that is close to energy-neutral over a year into a compliance instrument. As written, the reference is an open question rather than a proposed metric, and it is the line in the document with the most bearing on whether storage counts under a California building performance standard.
AB 1738 is residential by scope. The legislature passed the remote-inspection bill unanimously in the Assembly following a 29-6 Senate vote, and Governor Newsom has until September 30 to act on it. The bill establishes a statewide right for homeowners to request remote virtual inspections for home solar, home battery storage, heat pump HVAC systems, heat pump water heaters and roofs. Commercial buildings are outside that list.
Per pv magazine’s account of the bill, SPUR analysis found contractors typically wait two to six hours for an inspector to arrive for a review that takes about fifteen minutes, adding $600 to $1,000 per project. At least 19 jurisdictions, including Los Angeles County and San Diego, already offer some form of remote inspection.
The obligation and the relief are sized by different lines. A home battery in a residence is eligible for a video inspection under the bill. A 200 kWh installation in the electrical room of a 60,000-square-foot office building is not, and that same building would sit inside the building performance standard threshold.
Neither policy is inconsistent on its own terms. AB 1738 works through the residential permitting channel; the CEC strategy targets large buildings because that is where SB 48 pointed it. The combined effect is the part that carries consequences: California is preparing to add a performance obligation to commercial buildings, measured on metrics that do not credit load shifting, while writing permitting relief into statute for a project class those buildings cannot qualify for.
Where the evidence leads. California has no statewide building performance standard today, and the commercial storage case there has been carried by tariff savings rather than by mandate. A standard scored only on annual intensity would leave that unchanged, adding a compliance cost to the same owners without recognizing an asset many of them are already buying for demand reasons. A standard that scores peak demand would do something different: it would make an indoor battery a compliance instrument rather than only a bill-savings device.
The rulemaking record is where the demand-management question either acquires specifics or remains an invitation to explore. The 2045 target date means the metric set will be settled long before the first compliance checkpoint tests it, and the parties with an interest in how large California buildings manage peak load have one report cycle in which to say so.
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