California's Warehouse Indirect Source Rule.
SCAQMD Rule 2305 regulates warehouses as indirect sources of emissions — requiring operators to earn WAIRE Points annually or pay a $1,000-per-point mitigation fee.
Rule 2305 establishes a WAIRE Points obligation for warehouse operators in the South Coast Air Basin. The obligation is calculated based on truck trips, facility size, and a variable annual rate that increases over the phase-in period. Operators must either earn enough WAIRE Points through approved actions (solar, battery, EV charging, and others on the WAIRE Menu) or pay the $1,000 per-point mitigation fee.
- Size threshold: 100,000+ sq ft total space, with at least 50,000 sq ft used for warehousing
- Phase-in timeline: Annual obligation variable ramps from 0.33 to 0.67 to 1.0 over implementation years
- Points obligation: Calculated from truck trips × facility size × annual variable
- Earning options: WAIRE Menu actions — solar, battery, EV charging, and more
- Federal enforceability: The rule is incorporated into the SIP and is federally enforceable
Mitigation fees are pure cost.
The $1,000-per-point mitigation fee is the easy compliance option — and the most expensive one. It creates no asset, no savings, and no hedge against a fee that only goes in one direction.
Many warehouse operators initially assume the mitigation fee is manageable. It may be — in year one. But the annual variable ramps up over the phase-in period, the fee itself may increase, and the obligation is calculated fresh every year based on current truck trips. There's no end date. Paying the fee doesn't build any asset, doesn't reduce your energy bill, and doesn't create any protection against future increases.
- Annual variable ramps from 0.33 → 0.67 → 1.0 over the phase-in period
- Example: A facility with 625 WAIRE Points obligation pays $625,000/yr at full rate
- Recurring: The fee resets every year — it never goes away
- No asset created: Every dollar spent on mitigation is gone — no equipment, no savings
- No hedge: Fees may increase as the program matures
Invest once. Win twice.
Every WAIRE Menu action Reef delivers does two things at once — earns compliance points that eliminate your mitigation fee, and reduces your energy bill by 30–50%. All with zero capital from you.
Reef delivers solar PV and battery storage systems through zero-capital funding structures. Both technologies appear on the WAIRE Menu — meaning every kilowatt of solar installed and every kWh of battery capacity deployed earns WAIRE Points toward your annual obligation. The same project that achieves compliance also reduces your utility bill by 30–50%. You get compliance and savings from a single investment — one you don't have to make upfront.
- Onsite solar PV: Listed on the WAIRE Menu as a qualifying action — earns points based on system size
- Battery storage: Also listed — earns additional points and reduces peak demand charges simultaneously
- Zero capital: Reef and our funders cover 100% of cost — EaaS, lease, or PPA
- Reporting included: We compile and submit your annual WAIRE compliance documentation
- One partner: Reef manages compliance, installation, monitoring, and maintenance under one agreement