California Energy Policy Overview


Why Do I Need To Know?

Learning about energy policy of the state where you belong to is crucial to any businesses because it enables you to identify potential financial opportunities in every energy-related field. Especially in California, there are plenty of interesting policy aspects to observe.


No.1 Green State, California

California has been taking the lead role in response to climate change since the early 2000’s. Sacramento, the capital city of California, has been at the center of climate change policy through the Global Warming Solutions Act of 2006, or AB 32. The bill has encountered some opposition from big oil companies, but still maintaining its popularity. 

The state is also pursuing a cap-and-trade system, the most economical and environmental approach to control greenhouse gas emission, while the U.S. as a whole failed. This adventure is supported by California’s prominent clean-tech sector, which spawned 500,000 jobs—10-times faster than the rest of its economy—in 2012. 


Power Sector: Clean Energy Future

California’s Clean Energy Future initiative covers every aspect related to energy: all the way from energy demand and supply to transmission, distribution and operations. The goal is ambitious: to reduce greenhouse gas emissions to 1990 levels by 2020, to 20 percent of 1990 levels by 2050, and to supply 33 percent of energy from renewables by 2020.

On the demand side, the keywords are demand response, energy storage and distributed generation. Lower energy consumption by higher energy efficiency is the main leverage to achieve the goal. In terms of power supply, the state government is spending a serious amount of funding in research and development on renewable supply resources. Its vision is supported by Clean Energy Future Implementation Plan, which is subject to continuous revision and evaluation.


Renewables: Renewable Portfolio Standard (RPS)

A Renewable Portfolio Standard (RPS) is a regulation that requires the increased production of energy from renewable energy sources, such as windsolarbiomass, and geothermal. The RPS mechanism generally places an obligation on electricity supply companies to produce a specified fraction of their electricity from renewable energy sources.

All electricity retailers in the state including publicly owned utilities (POUs), investor-owned utilities, electricity service providers, and community choice aggregators. All these entities must adopt the new RPS goals of 20 percent of retails sales from renewables by the end of 2013, 25 percent by the end of 2016, and the 33 percent requirement being met by the end of 2020.


Energy Efficiency: Emphasis on Residential Sector

Energy efficiency in the residential sector can be achieved in many ways: the state of California has a variety of programs including regulations/standards on appliances, building standards, and Home Energy Rating System (HERS). Link to each program:

·       HERS:

·       Appliance efficiency:

·       2013 Building energy efficiency standards:

·       Energy standard hotline:

Also, a detailed article about California’s building standards will soon be available on EcoCloud.


Others: Where Can I Learn More?

·       California Energy Commission :

Keep an eye on the “FUNDING” menu! There are not only funding but technical assistance offered, rebates for solar and wind, and special offers for small businesses.

cali energy policy


·       DSIRE  (California):

DSIRE is a database of state incentives for your renewable and efficiency projects. You can find financial incentives, rules/regulations/policies categorized in relevant sectors, and related programs and initiatives.




By  Hoon Yun, EcoCloud Energy Co-Lead, Jun 11 2013