EnergyWise Plan Energy Section Update and Zero Net Energy Neighborhood Study

CEC Local Government Challenge Grant: Integrated Climate Mitigation and Adaptation Case Study



Between January 2018 and October 2019 San Luis Obispo County, funded through a California Energy Commission (CEC) Local Government Challenge grant, determined the technical, financial, and organizational feasibility of converting an existing, low-income neighborhood to zero net energy (ZNE). This included researching existing conditions; assessing energy efficiency and conservation potential; building distributed energy resource (DER) scenarios; determining physical and operational resource requirements; and conducting extensive community outreach and engagement. A small portion of the grant was also used to prepare a protocol compliant greenhouse gas (GHG) emissions inventory update for the county’s EnergyWise Plan.

The goal of this project was to assess the feasibility of designing and implementing a zero net energy neighborhood (ZNEN) in a disadvantaged community and to create a cost effective and replicable model to duplicate elsewhere in San Luis Obispo County and across California. There were four objectives supporting this goal including:Picture of the Oceano Study Area

  • Energy affordability
  • Decarbonization
  • Resiliency and local control
  • Workforce training and economic development

Several state policy goals regarding energy efficiency, renewable energy, and GHG emissions were relevant to this project including, but not limited to:

  • Senate Bill 32 – requires a reduction in GHG emissions by 40 percent below 1990 levels by 2030.
  • Senate Bill 350 – requires the state to double statewide energy efficiency savings in electricity and natural gas end uses by 2030; and increases California’s renewable energy procurement goal from 33 percent by 2020 to 50 percent by 2030.

The study area is a neighborhood within the unincorporated community of Oceano. While not considered a disadvantaged community according to Cal EnviroScreen (CES) 3.0, Oceano is a low-income community. CES does rank Oceano among the higher percentiles when examining poverty, academic education, exposure to pesticides, and several other disadvantages.

This project employed an integrated climate approach as it included mitigation and adaptation strategies ranging from energy efficiency, electrification, and renewable energy to battery storage and microgrids. It also addressed flooding, infrastructure deficiencies, and the need for a resilient critical facility or crisis mediation center.

Key Project Deliverables:

  • Community-Wide GHG Inventory Workbook
  • Community-Wide Energy GHG Reduction Measures Summary Report
  • ZNEN Existing Conditions Report
  • ZNEN Energy Profile and Conservation Tool
  • ZNEN Energy Efficiency and Conservation Potential Report
  • ZNEN Distributed Energy Resource Research Findings
  • ZNEN Final Report

Lead Agency and Partnerships

This was a highly collaborative project led by San Luis Obispo County and involving several other partner organizations. Key stakeholders included:

Local Governments

  • San Luis Obispo County
  • San Luis Obispo County Energy Watch Partnership
  • Tri-County Regional Energy Network (3C-REN)
  • Oceano Community Services District

Community Based Organizations

  • Habitat for Humanity for San Luis Obispo County
  • Promotores Collaborative of San Luis Obispo County
  • Community Action Partnership of San Luis Obispo
  • Boys & Girls Club of San Luis Obispo County
  • Lucia Mar Unified School District
  • Investor Owned Utilities
  • PG&E
  • Southern California Gas Company


Policies adopted by the county of San Luis Obispo’s Conservation and Open Space Element and in county’s climate action plan (referred to as the EnergyWise Plan) mandate the reduction of greenhouse gas emissions through energy efficiency, conservation, and renewable energy. The policy also establishes goals for reducing energy consumption and increasing generation of local renewable energy. State legislation also drove the need for this project, including Senate Bills 32 and 350.

Engagement Process

Project stakeholders included: local residents and community leaders, community-based organizations, local government agencies, investor-owned utilities, energy consultants, and solar developers. Residents and business owners within the neighborhood face increased vulnerability to climate impacts, particularly related to flooding and levee system failures.

Extensive stakeholder engagement was conducted throughout the project to generate awareness, create buy-in, and align recommendations with the community’s needs and expectations. These activities included:

  • Meeting with individual community residents and leadersPicture of a meeting of a group of people sitting at tables and listening to a speaker in a gymnasium
  • Tabling and presenting at community outreach events
  • Facilitating stakeholder meetings
  • Joining monthly community coalition meetings
  • Convening technical advisory committee meetings

The majority of the planned or anticipated outcomes related to engaging community-based organizations and local government agency staff were achieved. This was largely a function of partnering with community-based organizations with deep community ties, delivering public services and holding community meetings in trusted public spaces. Areas where efforts were insufficient were engaging and creating wide-spread awareness and buy-in amongst local residents. This was largely due to challenges building trust between local government and residents, as well as language barriers, and a lack of childcare and transportation.

Climate Impact Area

The primary climate impact this project responds to is historical and anticipated flooding and related levee systems failures. The failures are due to infrastructure deficiencies that are exacerbated by climate-driven extreme weather events. The project’s scope addressed community resilience against these climate impacts by retrofitting and/or erecting buildings that are able to remain habitable in the face of an event or crisis resulting in the loss of energy, and through the creation of resilient critical facilities or crisis mediation centers.

As a ZNE focused project, GHG emissions reduction or mitigation was the primary driver of this project. In addition, the feasibility of converting an existing, low-income neighborhood to ZNE by maximizing energy efficiency and conservation and scaling clean locally owned renewable energy was determined. Along with the many other benefits to a specific low-income neighborhood, deep reduction of GHG emissions were envisioned.


  • $327,142 from CEC Local Government Challenge grant funding
  • $15,000 in match share funding from the San Luis Obispo County

Research and Data

Data tool used:

  • Excel-based energy profile and conservation tool

Key resources (see links below) used for this project included:

  • CalEnviroScreen 3.0
  • SoCalGas
  • PG&E
  • Urban Footprint software
  • Residential Appliance Saturation Survey (RASS)
  • PVWatts calculator
  • PVRAM map
  • United States Department of Agriculture Natural Resources Conservation Services Web Soil Survey
  • California Independent System Operator
  • California Public Utilities Commission (CPUC)
  • California Energy Commission
  • California Department of General Services
  • United States Environmental Protection Agency ERERGY STAR Portfolio Manager
  • California Building Energy Code Compliance Software Residential (CBECC-Res)
  • National Renewable Energy Lab
  • Federal Emergency Management Agency


This project faced major challenges. Some were anticipated and some were either not foreseen or simply underestimated. Key challenges included:

  • Data Access – obtaining complete and high-quality data in a timely manner from investor owned utilities.
  • Community Engagement – generating awareness and developing trust was challenging due to language barriers, lack of childcare and transportation, and mistrust of local government.
  • Project Support – lack of political and financial support from local government.
  • Policy Barriers – key ZNE strategies including community solar and electrification with heat pump technologies face policy barriers.

As detailed in the final report (page 22), Green Tariff Shared Renewables (GTSR) legislation, passed in 2013, requires utilities to provide renewable energy power options for customers. Unfortunately, Investor Owned Utilities GTSR offerings result in more expensive utility bills or are simply not/no longer available. More importantly, a traditional regulatory framework does not currently exist in California for a community scale renewable resource to deliver on-bill economic benefits.

At the time this project was conducted, two policy barriers to electrification existed. The first barrier was Title 24, Part 6 - in the form of a penalty against modeled electrification measures that made it difficult, if not impossible, to achieve compliance in most cases if not using natural gas. This barrier was removed effective January 1, 2020, when the new California Building Energy Efficiency Standards went into effect.

The second barrier was that the CPUC had not yet revised the three-pronged test addressing fuel switching/fuel substitution. Effectively, this test had a bias in favor of natural gas and against electric appliances, thereby limiting the ability of program administrators to utilize rate payer dollars to offer incentives and rebates for electrification measures including heat pumps. This barrier was removed as of August 2019 when the CPUC issued their fuel substitution decision.

Some project challenges were within the ability of the team to influence, while others were outside of the project’s scope or sphere of influence. For example, many community engagement challenges were overcome with persistence, patience, and by developing relationships and partnerships. The community-based organizations assisted by tapping into their deep community ties, delivering public services, and holding community meetings in trusted public spaces. Similarly, challenges with data quantity or quality were overcome with the use of powerful modeling tools and sound assumptions. On the other hand, the lack of political and financial support from local government or the existence of policy barriers that hinder community solar and electrification were not overcome. These latter challenges are critical for the planning and outcomes of future projects.


The primary outcome is the realization that the Oceano community is very well-positioned to implement this project, if so desired. The community now has an accurate and up-to-date understanding of existing conditions, energy efficiency potential, and DER scenarios. They also have a ZNE roadmap with available resources and understanding of the physical, financial, and operational challenges. This positions the project well for further grant funding, detailed site analysis, environmental review, and financing. A secondary outcome of this project is that 3C-REN is well positioned to serve hard to reach residents and building professionals in the community through its Residential Direct Install and Workforce Education and Training Programs.

In addition to sharing the project’s findings and tools for others to leverage elsewhere, viable next steps for this project are mainly focused on energy efficiency, decarbonization, and 3C-REN’s involvement including:

  • Targeting 3C-REN program offerings to the community and neighborhoods
  • Coordinating with any potential community choice aggregators to explore programmatic offerings that combine beneficial electrification with energy load reduction measures


One of the overarching goals of this project and its grant funding was to develop a framework for the replicable conversion of existing, low-income neighborhoods to ZNE in San Luis Obispo County and across California. The project’s overall approach and methodology, case study research, and deliverables (including its Excel-based energy profile and conservation tool and DER findings), are all highly replicable. Perhaps most importantly, many of the foundational and aspirational strategies, as well as the underlying recommendations, can be applied in other communities and regions. The findings, lessons learned, and collaborations are all being used at presentations and two statewide conferences. Deliverables will be shared with stakeholders and professional affiliations. These will also all be used to target 3C-REN program offerings to the Oceano neighborhood and greater community.

Additional Resources

Further Information

Project Manager: Jon Griesser 
(805) 781-5611