California’s building sector generates roughly 25% of the state’s annual greenhouse gas emissions from onsite fossil fuel consumption and electricity demand. The California Energy Commission's 2021 Building Decarbonization Assessment identifies building end-use electrification as a central strategy for cutting building sector emissions by at least 40% below 1990 levels by 2030, with the 2022 Scoping Plan setting a path to carbon neutrality by 2045. The commercial sector, encompassing offices, restaurants, hotels, healthcare facilities, schools, colleges, retail, grocery stores, and warehouses, represents roughly 7,400 million square feet of built space statewide, consuming more than 105,000 GWh of electricity and 2,130 million therms of natural gas annually. Despite this scale, no commercial-sector-specific electrification target has been formally established by the state.

Comprehensively electrifying California's existing commercial building stock will require enormous investment. No commercial-sector-specific cost estimate currently exists in the published literature, an important gap this brief flags as a prerequisite for effective program design. However, the commercial sector appears to be moving in the wrong direction: between 2006 and 2022, electricity's share of total commercial energy consumption fell from 37% to 31% as gas use increased. While some businesses will act voluntarily, financial incentives are essential to achieving near-universal commercial electrification, particularly for lower- and moderate-income businesses. Without intentional equity design, this transition will continue and entrench existing inequitable patterns of technology adoption, deepening challenges for commercial buildings in disadvantaged communities.

This policy brief examines the equity implications of building electrification, including current and anticipated costs, barriers to adoption, and the specific concerns of commercial tenants and owners, drawing on a multi-year interdisciplinary analysis by UCLA's California Center for Sustainable Communities.