Preparing for the 2025 Energy Code Switch - Gilleran Energy Management

What California Project Teams Need to Know

As California moves toward its ambitious clean energy goals, the 2025 Energy Code Switch marks another significant milestone. Beginning January 1, 2026, all projects applying for permits must comply with the updated Title 24, Part 6 Building Energy Efficiency Standards. The updates are designed to reduce greenhouse gas emissions, expand electrification, and enhance resilience across residential, multifamily, and nonresidential buildings.

At Gilleran Energy Management, Inc., we help architects, developers, engineers, affordable housing providers, and high-end custom home builders navigate these changes with confidence.

As such, in our latest article, we break down what these updates mean for your projects—and how our expertise ensures compliance without unnecessary delays or costs.

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Why the 2025 Energy Code Matters

The Energy Code has always been about more than compliance. It’s about saving energy, reducing costs, and building a healthier California. Since its inception, efficiency standards have saved Californians more than $100 billion in avoided energy costs while helping the state maintain some of the lowest per-capita energy use in the nation.

The 2025 update alone is expected to save $4.8 billion in statewide energy costs over 30 years. By expanding the use of heat pumps, strengthening ventilation standards, and requiring solar and battery storage in more building types, the Code continues to drive decarbonization in line with the state’s climate goals.

Key Updates for 2025

Single-Family Residences

Heat Pumps become the baseline for both space and water heating in new homes.
Homes must now be electric-ready, designed for future installation of clean appliances like induction cooktops and battery storage systems.
Accessory Dwelling Units (ADUs), duplexes, and townhomes are all classified as single-family and subject to the same rules.
A new Peak Cooling Energy metric has been introduced, ensuring homes are designed to avoid overburdening the electrical grid during hot summer afternoons.

Multifamily Buildings

Heat Pump Water Heaters are required as the baseline in low-rise multifamily units.
Solar PV and battery storage systems remain required for high-rise multifamily construction.
Updated ventilation standards improve indoor air quality in shared residential environments, a critical step in protecting the health of tenants.
Changes in compliance metrics now better reflect long-term costs, allowing developers to evaluate building performance over a 30-year span.

Nonresidential & Commercial Buildings

Expanded solar and battery requirements now apply to a broader range of occupancy types, including assembly spaces, offices, and hotels.
More stringent envelope and HVAC standards improve efficiency across all climate zones.
Commercial kitchens must now be electric-ready, setting the stage for a transition away from natural gas appliances.
Existing nonresidential buildings undergoing major renovations will see requirements for high-efficiency rooftop HVAC replacements, ensuring upgrades align with California’s broader decarbonization strategy.

Shifting Metrics: From TDV to LSC

Another major shift is how compliance is measured. Instead of Time Dependent Valuation (TDV), the 2025 Code introduces Long-Term System Cost (LSC) metrics.

Source Energy (Source): Measures the long-term fossil fuel impact of a building’s operations.
Efficiency LSC (LSCe): Tracks long-term system costs tied specifically to energy efficiency measures.
Total LSC (LSCt): Combines efficiency measures, solar generation, batteries, and load flexibility for a holistic view of performance.

This change reflects California’s focus on decarbonization and grid resilience, giving owners and developers a clearer picture of how today’s design choices will impact costs and carbon emissions over the next three decades.

Water and Air Quality Improvements

The 2025 Energy Code doesn’t stop at energy efficiency—it also supports water conservation and healthier indoor environments. Updates include reduced plumbing pipe sizes to match modern low-flow fixtures and more efficient cooling systems that conserve water in commercial facilities. Multifamily and single-family ventilation standards have been strengthened to improve indoor air quality, reducing risks from pollutants and allergens.

These improvements not only benefit occupants but also increase the long-term value of buildings by reducing operating costs and creating healthier spaces.

The Big Picture: Benefits Beyond Compliance

The 2025 Energy Code isn’t just a regulatory hurdle—it’s a pathway to:

Lower operating costs for building owners and residents.
Cleaner indoor air quality through better ventilation.
Resilient energy systems with solar and battery storage.
Future-ready design that anticipates California’s all-electric future.
Stronger property values, as efficient buildings are more attractive to both buyers and tenants.

For developers, affordable housing providers, and high-end builders, these updates present both challenges and opportunities. Projects that align early with these standards will move more smoothly through permitting and construction, avoiding costly redesigns and delays.

Partner With Gilleran Energy Management, Inc.

At Gilleran Energy Management, Inc., we bring dirt-to-doorknob expertise to every project. From affordable housing to high-end custom homes and large-scale commercial developments, we guide teams through the evolving energy landscape with precision, responsiveness, and professionalism.

The 2025 Energy Code Switch is complex, but it doesn’t have to be overwhelming. With our support, you can be confident your project will meet the latest requirements while achieving your vision. Ready to get started? Contact Gilleran Energy Management, Inc. today to discuss how the 2025 Energy Code will impact your next project.