Decarbonizing Affordable Housing in California: Incentive Programs for a Sustainable Future

Affordable housing in California plays a pivotal role in the state’s commitment to decarbonization; to support developers and project owners in their efforts to create energy-efficient and all-electric housing solutions, the state has developed two new incentive programs. These programs not only promote greenhouse gas reduction but also help keep energy bills affordable for tenants to ensure a sustainable and equitable transition to a greener future.

The Building Initiative for Low-Emissions Development (BUILD) Program

The BUILD Program is a comprehensive residential building decarbonization program designed to incentivize and support the adoption of advanced building design and all-electric technologies in new low-income homes and multifamily buildings. This program offers robust incentives and technical assistance based on a project’s anticipated model greenhouse gas (GHG) emission reduction in comparison to the mixed-fuel 2019 Energy Code prescriptive standards. 

By participating in BUILD, applicants can receive significant financial incentives of up to $2,000,000 to:

  • Offset construction costs
  • Reduce long-term utility expenses for both residents and property owners
  • Eliminate the need for gas infrastructure
  • Layer funds with other programs and BUILD incentives

The program also provides:

  • Free technical assistance services, including educational resources
  • Support throughout all development phases 
  • Assistance with the application process
  • Guidance on local building permits. 

Eligible participants include building owners or developers with at least five years of development experience and one completed low-income project. To be eligible, projects must be: 

  • Single and multifamily low-income residential housing
  • All-electric with no gas hookups
  • Able to demonstrate modeled resident utility cost savings
  • Located in Southern California Gas, Pacific Gas & Electric, San Diego Gas & Electric, or Southwest Gas Corporation service territories

Projects receiving BUILD incentives must ensure that occupants don’t experience higher utility bills. To assist applicants, the program provides a BUILD Calculator that can be utilized during the early design reservation phase. This tool allows applicants to estimate the available incentive amounts and verify that their project designs meet the requirements for modeled resident bill savings.

California Utility Allowance Calculator (CUAC) for Affordable Housing

Being able to accurately estimate tenant utility costs in affordable housing is essential; the California Utility Allowance Calculator (CUAC) is an energy use model specifically designed for this purpose. It typically offers a more accurate assessment compared to the utility allowance schedules provided by public housing authorities and is particularly valuable when combined with the installation of solar photovoltaic (PV) systems.

An essential tool for affordable housing developers, the CUAC allows you to accurately determine tenant utility costs while also providing the flexibility to reallocate utility expenses towards rent. The use of the CUAC is governed by specific regulations and must be prepared by qualified energy analysts. 

The use of the CUAC is also limited to specific categories of projects, subject to approval by the California Tax Credit Allocation Committee (CTCAC). These categories include:

  • New construction projects
  • Rehabilitation projects applying for tax credits in 2018 (or later) if the rehabilitation improves energy efficiency by at least 20%, or if the rehabilitation installs solar generation that offsets 50% of tenant loads
  • Existing tax credit projects with newly installed Solar PV through the Multifamily Affordable Solar Housing (MASH) program or a solar program administered by a municipal utility or joint powers authority

By utilizing the CUAC, affordable housing developers can ensure more accurate estimates for tenant utility costs and improve the overall affordability and sustainability of their projects. 

Get Expert Assistance with Your Project

With our expertise and in-depth knowledge of the BUILD program and CUAC, Gilleran Energy Management can help you leverage incentive programs for your project. Through our comprehensive consulting services, we’ll work closely with your team to identify and implement the necessary energy performance features and green technologies, as well as facilitate compliance with national and local certification programs. Contact GEM today at (707) 528-7318 to schedule a consultation.

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