Product Compliance vs Building Code Compliance: Understanding the Critical Difference for Startups

Understanding Product Compliance vs Building Code Compliance

Hardware startups often discover a harsh reality: earning a UL certification mark doesn't guarantee your product can actually be installed.

In 2023, Battery Energy Storage Systems (BESS) projects added significant power capacity—over 7 GW in the U.S. alone—yet many certified battery systems face installation delays because local authorities reject permits despite valid certifications.

The confusion stems from conflating two distinct processes. Product compliance involves third-party certification through Nationally Recognized Testing Laboratories (NRTLs) that test products against specific safety standards. Building code compliance requires separate approval from local Authority Having Jurisdiction (AHJ) entities who determine whether certified products can be installed in specific locations.

As one expert explains: "At the end of the day, 'approved' is defined in the National Electric Code (NEC) under Article 100 as 'acceptable to the authority having jurisdiction'."

Understanding this distinction is critical for hardware founders planning market entry strategies and avoiding costly delays.

‍

Key Points

• Product compliance (NRTL certification) and building code compliance (AHJ approval) are two separate processes - having a UL certification doesn't guarantee installation permits, as local authorities can still reject certified products based on site-specific requirements.
• Authority Having Jurisdiction (AHJ) entities like building officials and fire marshals have broad discretionary power to interpret codes and approve installations, creating potential variations in requirements across different locations even for identical certified products.
• Hardware startups must prepare distinct technical documentation packages for each compliance path - certification requires lab testing data while permitting demands installation-focused information like environmental assessments and fire safety analyses.
• Many local authorities lack experience with emerging technologies like battery storage systems, leading to conservative code interpretations and unexpected installation delays despite valid product certifications.
• Companies should allocate a significant budget for both compliance processes and treat compliance as a strategic competitive advantage rather than just a regulatory burden.

What is Product Compliance and How Third-Party Certification Works

Product compliance centers on independent assessments conducted by Nationally Recognized Testing Laboratories (NRTLs), which are private-sector organizations recognized by OSHA to perform safety testing and certification of workplace equipment using consensus-based standards.

The NRTL certification process involves rigorous testing protocols where independent laboratories evaluate products against established safety standards like UL 2054 for batteries or UL 991 for environmental air cleaners. Each NRTL issues distinct certification marks—UL Listed, Eurofins MET, or CSA Certified—that indicate successful completion of safety testing.

Third-party certification provides credibility through independence from manufacturers and ongoing compliance verification. The process typically includes initial product testing and factory inspections, with ongoing monitoring and fees as required to maintain certification status.

However, certification doesn't guarantee market acceptance. Building product manufacturers face risks including "market acceptance of their product, delays on job completion, and rejection by building officials" without proper certification.

The key limitation: NRTL certification only confirms a product meets safety standards in laboratory conditions. It doesn't address installation requirements, local fire codes, or site-specific conditions that affect real-world deployment. This creates a critical gap between having a certified product and gaining installation approval.

Building Code Compliance and Authority Having Jurisdiction Powers

Building code compliance operates through a completely different system controlled by Authority Having Jurisdiction (AHJ) entities—typically local building officials, fire marshals, or electrical inspectors with statutory authority to approve or deny installations.

AHJs possess broad discretionary authority to interpret and enforce codes within their jurisdictions, creating potential variations in requirements across geographic boundaries even for identical certified products. The final AHJ determines acceptance of products and equipment, regardless of certification status.

This creates significant challenges for hardware companies. Many AHJs frequently lack requisite permitting experience with emerging technologies like battery energy storage systems, leading to "unique hurdles that can delay permitting and efficient project execution."

The permitting process involves multiple review stages by different departments (building, fire, mechanical, electrical, plumbing) that each examine specific aspects of code compliance. For battery systems, this might include land use permitting processes like conditional use permits requiring extensive documentation including environmental assessments and fire safety analyses.

AHJs can reject certified products based on local code interpretations, siting requirements, or integration concerns that weren't addressed during product certification testing.

Understanding Codes and Standards: The Foundation of Both Systems

Understanding codes and standards requires recognizing that standards are voluntary consensus documents that become mandatory when referenced by adopted codes, creating legal enforceability for technical specifications developed through industry collaboration.

Building codes establish minimum installation and construction requirements while referencing specific standards for detailed product specifications. Codes become law when adopted by local jurisdictions, but jurisdictions often modify model codes to address local conditions.

The relationship works hierarchically: consensus standards like NFPA 855 for energy storage systems provide technical requirements, while building codes reference these standards and establish enforcement mechanisms. Standards development involves cyclical revision processes that incorporate evolving technology and field experience.

This creates complexity for hardware companies because different jurisdictions modify model codes, creating significant compliance variations that affect market access strategies. A product certified to UL 9540 standards might face different installation requirements under NFPA 855 depending on how local jurisdictions interpret and enforce those codes.

The key insight: voluntary standards aren't truly voluntary when market success depends on compliance. They represent industry consensus on safety requirements that become legally binding through code adoption, making standards compliance essential for both certification and installation approval.

Technical Information Requirements for Dual Compliance

Hardware startups must prepare distinct technical information packages for certification and permitting processes. Product certification requires comprehensive testing data and technical specifications including electrical schematics, material specifications, manufacturing processes, and quality control documentation that NRTLs use to evaluate safety standard compliance.

For building code compliance, AHJs demand different technical information focused on installation requirements and site-specific performance. This includes environmental assessments, cultural resource studies, and fire safety analyses that complement laboratory testing results by considering real-world deployment conditions.

The documentation burden extends beyond initial approval. Certification involves ongoing compliance obligations including factory inspections, applicable listing fees, and maintenance of quality control systems throughout the product lifecycle. Meanwhile, certificate of occupancy requirements typically involve issuance upon completion of construction or change of use, with some jurisdictions allowing temporary certificates that may require periodic renewal to verify ongoing compliance.

Smart hardware companies develop integrated documentation systems that serve both compliance paths. This includes maintaining detailed change control records, test reports that address both laboratory standards and field conditions, and installation guides that help AHJs understand how certified products meet local code requirements. The key is recognizing that technical information serves different audiences with different concerns about product safety and installation appropriateness.

Industry-Based Schemes and Compliance Demonstration Strategies

Different industries have developed specialized industry-based schemes that address their unique dual compliance challenges. The energy storage sector exemplifies this approach, where BESS projects must navigate both UL 9540 certification and local AHJ approval under NFPA 855 installation requirements.

Electronics manufacturers typically pursue NRTL certification for workplace electrical safety while separately preparing for FCC compliance and ensuring their products meet applicable local electrical codes. This requires coordinating multiple testing protocols and documentation packages that address electromagnetic compatibility, safety standards, and installation requirements across different regulatory frameworks.

Building materials manufacturers benefit from obtaining product certification to avoid "market acceptance risks, delays on job completion, and rejection by building officials." However, they must also demonstrate code compliance through alternative pathways when standard certifications don't address specific installation scenarios.

Successful hardware companies develop strategic compliance demonstration approaches that leverage third-party expertise. Independent compliance advisors often provide more comprehensive guidance than traditional testing laboratories because they understand both certification requirements and AHJ concerns. These advisors help companies navigate the complexity of demonstrating compliance across multiple domains, while some industry practices recommend separating testing and consulting services to minimize potential conflicts of interest.

The most effective industry-based schemes recognize that voluntary standards become mandatory when market success depends on compliance, requiring strategic approaches that treat compliance as a competitive advantage rather than a regulatory burden.

Building Performance and Real-World Installation Challenges

Certified products must still meet building performance requirements that extend far beyond laboratory testing conditions. AHJs evaluate how products integrate with existing building systems, site-specific environmental conditions, and local safety requirements that weren't addressed during initial certification testing.

Many AHJs lack requisite permitting experience with emerging technologies, creating "unique hurdles that can delay permitting and efficient project execution." This knowledge gap means certified products may face unexpected installation challenges when AHJs apply conservative interpretations of building codes.

Real-world installation challenges include thermal management in different climates, structural integration requirements, emergency access considerations, and compatibility with local utility systems. A UL-listed battery system might meet all safety standards yet fail to receive permits if the AHJ determines it doesn't comply with local fire department access requirements or utility interconnection standards.

Building performance evaluation also considers long-term operational requirements. AHJs may require ongoing monitoring systems, maintenance protocols, or operational restrictions that weren't part of the original certification process. For example, energy storage systems might need additional fire suppression integration or specialized emergency response procedures that vary by jurisdiction.

Hardware companies must anticipate these building performance challenges during product development. This includes designing products with installation flexibility, providing comprehensive technical support for AHJ interactions, and developing relationships with local engineering firms who understand regional code interpretations and can facilitate the permitting process.

Conclusion

Product compliance vs building code compliance represents two distinct but interconnected approval processes that hardware startups must navigate strategically. Success requires understanding that certification provides market credibility while permitting determines real-world deployment viability. Companies that treat compliance as a strategic enabler rather than a regulatory burden gain competitive advantages through faster market entry and broader installation acceptance across diverse jurisdictions.