California has announced updates to its 2025 Energy Code, part of Title 24 Building Standards Code, aimed at improving energy efficiency in buildings and reducing greenhouse gas emissions. The new code emphasizes the use of energy-efficient heat pumps for both space and water heating and encourages strategies that shift energy consumption away from peak demand periods. Buildings are a significant source of emissions in California, accounting for about 25% of the state’s total greenhouse gases.
According to the California Energy Commission (CEC), these updates are projected to save consumers approximately $4.8 billion in energy costs over the next 30 years and reduce greenhouse gas emissions by about 4 million metric tons. This reduction is comparable to the annual energy usage of more than half a million homes. Builders also have the option to adopt even higher efficiency standards through CALGreen, which was updated alongside the new Energy Code.
The CEC develops and approves new codes every three years to reflect advances in technology and cost savings throughout a building’s life cycle. Public input from builders and other stakeholders is considered during this process.
“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 California’s 2025 Energy Code are expected to be significantly more efficient than those constructed under national standards. Many new homes across the United States do not meet even current national model codes, placing California among the leaders in building efficiency.
Key changes for single-family homes include encouraging heat pumps through established energy budgets, updating HVAC requirements with smart thermostats that can respond to changing electricity rates, and increasing wall and window efficiency for greater comfort.
For multifamily buildings, the code encourages heat pump adoption for both space heating/cooling and water heating (in certain low-rise units), requires electric-ready infrastructure for future appliance upgrades, strengthens ventilation standards for better indoor air quality, expands access to electric vehicle charging stations, and increases insulation measures.
Businesses will see encouragement toward heat pumps in select new buildings; replacement of older rooftop HVAC systems with high-efficiency units including heat pumps during alterations; electric-ready commercial kitchens; improved HVAC controls; as well as enhanced insulation standards for ceilings, walls, and windows.
An executive order temporarily suspends some requirements of the update—including solar installation—for projects rebuilding after substantial wildfire damage in Los Angeles County during 2025. However, these projects must still be prepared for future solar installations.
“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 again ranked first nationwide by the American Council for an Energy-Efficient Economy’s State Energy Efficiency Scorecard—a recognition it has received seven times over sixteen years—demonstrating leadership across all six scoring categories including equitable decarbonization efforts focused on low-income communities.
Over five decades of appliance and building efficiency standards have resulted in more than $200 billion saved by Californians—a figure expected to reach $300 billion by 2030—and substantial reductions in carbon emissions equivalent annually to those produced by dozens of gas power plants.
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About the California Energy Commission
The California Energy Commission is responsible for advancing state energy policy, promoting efficiency measures such as those described above, certifying power plants, investing in innovation within renewable energies as well as transportation transformation initiatives while preparing responses for potential statewide energy emergencies.
