California has announced updates to its Energy Code for 2025, aiming to increase energy efficiency in buildings and reduce greenhouse gas emissions. The new code is part of Title 24 Building Standards and focuses on encouraging the use of heat pumps for heating and water systems, as well as shifting energy consumption away from peak demand periods.
According to the California Energy Commission (CEC), these changes are expected to save consumers about $4.8 billion in energy costs over the next 30 years and cut greenhouse gas emissions by approximately 4 million metric tons. This reduction is equivalent to the annual energy use of more than half a million homes. Builders can also choose to adopt higher standards through CALGreen, which was updated alongside the Energy Code.
The CEC revises building codes every three years, incorporating new technology and considering feedback from the public, builders, and other stakeholders. “Energy efficiency is the quiet workhorse of the clean energy transition. Efficiency reduces Californians’ bills, improves their health and comfort, and reduces strain on the electricity grid,” said CEC Commissioner Andrew McAllister. “When we build and upgrade homes to use less energy, California families save money, and communities get cleaner air and a more reliable electricity system.”
Homes built under the 2025 California Energy Code are projected to be almost twice as efficient as those constructed under current national standards. Many new homes across the United States do not meet even these national model codes.
For single-family homes, the update encourages heat pumps for both air conditioning and water heating by setting specific energy budgets for buildings. It also updates requirements for HVAC systems and controls—such as smart thermostats that automatically adjust usage based on real-time pricing—and increases efficiency standards for exterior walls and windows.
Multifamily buildings will see similar measures, including incentives for heat pump installations in low-rise units with individual water heaters. The code introduces electric-ready requirements so residents can more easily switch to electric appliances in the future. Ventilation standards have been strengthened to improve indoor air quality, while access to electric vehicle charging has been expanded through dedicated circuits and parking spaces with chargers.
For businesses and nonresidential structures, there is an emphasis on heat pumps for space heating in select new buildings. Alterations involving end-of-life rooftop HVAC systems must now replace them with high-efficiency models like heat pumps in stores, schools, offices, and libraries. Electric-ready requirements have been added for commercial kitchens to support future transitions away from fossil fuels.
A temporary exception applies under Executive Order N-29-25: projects repairing or replacing residential structures damaged by the 2025 Los Angeles area wildfires are not required to comply with solar or battery storage mandates but must remain solar-ready.
“We are gratified that builders in California will be designing to the 2025 California Energy Code,” said CEC Building Standards Branch Manager Gypsy Achong. “Compliance with this update is the most affordable way to build a resilient and comfortable building for the future. This update does not mandate specific technologies or fuel types. We continued our long-standing tradition of figuring out what energy budget is pragmatically possible and then asking designers to meet that budget. We are delighted that this approach continues to affordably advance our state’s transition to 100% clean energy in buildings.”
In March 2025, California was ranked first nationwide for its leadership in energy efficiency policy by the American Council for an Energy-Efficient Economy (ACEEE). The state received top scores across all categories measured by ACEEE’s State Energy Efficiency Scorecard—a recognition it has earned seven times over sixteen years—which highlights efforts such as expanding heat pump installations in low-income communities.
Over five decades of appliance and building standards have saved Californians more than $200 billion on utility bills; this figure is projected to reach $300 billion by 2030. In just one year alone, appliance standards resulted in savings exceeding $11 billion—an amount comparable to shutting down sixty gas power plants—with significant reductions coming from lighting ($4.7 billion), televisions ($2 billion), battery chargers ($1.64 billion), computers ($593 million), and monitors ($89 million).
The CEC remains responsible for advancing state energy policy, certifying power plants, investing in innovation, developing renewables, transforming transportation systems, preparing for emergencies, and promoting efficiency throughout California.
