Major changes are coming to California’s construction industry. The California Energy Commission (CEC) has officially adopted the 2025 Building Energy Efficiency Standards (Title 24, Part 6), set to take effect on January 1, 2026. Focused on electrification, decarbonization, and indoor air quality, these updates will significantly impact how new projects are designed, built, and delivered.
For developers, contractors, and project managers working in California’s highly regulated market, early preparation is essential. Here’s what you need to know to stay ahead.
Big Changes Under the 2025 Code
Heat Pumps Front and Center:
The new standards encourage the use of high-efficiency heat pump technology for both space and water heating. This supports California’s broader push away from natural gas and toward an all-electric future.Stronger Ventilation Requirements:
Multifamily buildings must meet enhanced indoor air quality standards, with better ventilation systems aimed at creating healthier living environments.Expanded Solar and Battery Requirements:
High-rise residential and select nonresidential projects will now face updated mandates for solar photovoltaic (PV) systems and onsite battery storage, strengthening California’s grid resiliency.Electric-Ready Commercial Kitchens:
New commercial kitchen spaces must be built to be "electric-ready," laying the groundwork for future electrification.
The Bottom-Line Impact
According to the CEC, the new 2025 standards are projected to:
Save California building owners and tenants approximately $4.8 billion in lifetime energy costs.
Cut greenhouse gas emissions by about 4 million metric tons — equivalent to the annual energy use of more than 500,000 homes.
With California’s ambitious climate goals driving these updates, builders can expect increasingly stringent performance expectations across every sector.
What Construction Leaders Should Do Now
Start Early:
Integrate heat pumps, solar PV, and electric-ready designs during schematic and design development phases.Prioritize Collaboration:
MEP engineers, architects, and contractors must work hand-in-hand earlier than ever to ensure compliance and cost efficiency.Invest in Training:
Project managers and field teams should get up to speed on the 2025 code through CEC and Energy Code Ace workshops to avoid costly mistakes later.Reassess Budgets and Schedules:
Meeting the new standards may affect project timelines and cost structures—especially in high-rise multifamily and large commercial builds.
Looking Ahead
The 2025 Energy Code is not just another regulatory hurdle—it’s a window into the future of California construction. Projects that embrace these standards today will be better positioned to meet future tenant demands, achieve higher asset value, and deliver long-term operational savings.
At Paragon, we believe staying proactive is the key to staying profitable. As California sets the pace nationally for energy efficiency and sustainability, industry leaders must build smarter, faster, and greener.
