On September 11, the California Energy Commission (CEC) approved stricter energy efficiency standards for buildings, as the state continues its push against natural gas appliances.
The state’s new energy code, set to take effect in 2026, stops short of mandating zero-emission technologies like electric heat pumps in new construction but will make it more challenging and expensive to install gas space and water heaters.
The decision to regulate gas appliance use through energy efficiency rules — rather than a mandate — comes after the city of Berkeley dropped its ban on gas lines in new buildings in March, following a 9th Circuit Court of Appeals ruling that the ban violated federal law. More than 70 California cities had enacted so-called REACH codes that restricted or banned natural gas appliances or piping in new construction, but the federal court’s Berkeley decision put those ordinances on hold.
The commission voted 4-0 to adopt the energy code, which sets high-efficiency standards designed to incentivize developers to use heat pumps for space and water heating. If a builder opts to install a gas heater for either purpose, they will need to invest in additional efficiency upgrades such as thicker windows, more insulation, or improved plumbing.
The code also includes standards encouraging the use of heat pumps in new schools and office buildings, and requiring existing office buildings to replace rooftop gas units with more efficient alternatives when they burn out.
The CEC’s approach does not dictate the efficiency of appliances but instead sets standards for the overall energy efficiency of a building.
The California Air Resources Board (CARB) and air quality management districts in the Bay Area and Southern California have separately passed pollution standards banning the sale of new gas water heaters and furnaces locally within the next few years, with a statewide ban starting in 2030.
Additionally, the California Public Utilities Commission (CPUC) in 2022 made California the first state to eliminate subsidies for gas and electric lines to new buildings equipped for gas.
The new standards are widely supported by public utilities, environmental groups, and major heat pump manufacturers like Mitsubishi and LG. However, they face opposition from groups like the Western Propane Gas Association and Heating and Refrigeration Distributors International, which argued that the Energy Policy and Conservation Act (EPCA) still preempts the standards and that they will raise construction costs.
CPSA is currently considering a legal challenge to the new rule by the South Coast Air Quality Management District that bans natural gas pool heaters starting in 2028.
CPSA is also involved in a proceeding initiated by CARB on the same issue. Notably, the Bay Area and San Joaquin Valley Air Quality Management Districts have exempted pool heaters from their respective regulations.
