The California Energy Commission (CEC) adopted building energy efficiency standards that will make natural gas space and water heaters more expensive to install. The 2025 Building Energy Efficiency Standards apply to newly constructed, renovated buildings, and certain existing buildings. The code is updated every three years, and this update takes effect in 2026 if approved by the California Building Standards Commission (CBSC).
The energy efficiency rules are part of a policy to reduce greenhouse gas (GHGs) emissions and other pollutants, reduce energy costs, and to harden new buildings to better withstand extreme weather. The 2025 Energy Code focuses on:
Encouraging heat pump technology for space and water heating in newly constructed single-family, multifamily, and select nonresidential building types;
Replacing end-of-life rooftop heating, ventilation, and air-conditioning (HVAC) units with high efficiency systems including heat pumps. This applies to existing retail, existing schools, and existing offices and libraries;
Establishing electric-ready requirements for commercial kitchens and some multifamily buildings;
Updating solar and storage standards for assembly buildings;
Strengthening ventilation standards to improve indoor air quality in multifamily buildings.
State and local officials have pursued increased building energy efficiency standards to move new construction away from fossil fuels since the U.S. Court of Appeals for the Ninth Circuit overturned Berkeley’s ban on natural gas in new construction. The court held that the federal Energy Policy and Conservation Act (EPCA) gives the U.S. government sole authority to set energy-efficiency standards for appliances and preempts Berkeley’s ordinance. The EPCA, however, does not regulate the energy efficiency of buildings.