HomeMy WebLinkAboutStaff Report 2507-5020CITY OF PALO ALTO
CITY COUNCIL
Monday, September 08, 2025
Council Chambers & Hybrid
5:30 PM
Agenda Item
19.Adoption of an Emergency Ordinance Amending Palo Alto Municipal Code (PAMC)
Chapter 16.04 to Add Local Administrative Amendments Related to Certificates of
Occupancy and Definitions to the 2022 California Building Code, and an Emergency
Ordinance Amending PAMC Chapter 16.17 to Adopt the 2025 California Energy Code
and Local Amendments Thereto. CEQA Status – Exempt Under CEQA Guidelines Section
15061(b)(3) and 15308. Public Comment, Presentation
City Council
Staff Report
From: City Manager
Report Type: ACTION ITEMS
Lead Department: Planning and Development Services
Meeting Date: September 8, 2025
Report #:2507-5020
TITLE
Adoption of an Emergency Ordinance Amending Palo Alto Municipal Code (PAMC) Chapter
16.04 to Add Local Administrative Amendments Related to Certificates of Occupancy and
Definitions to the 2022 California Building Code, and an Emergency Ordinance Amending PAMC
Chapter 16.17 to Adopt the 2025 California Energy Code and Local Amendments Thereto. CEQA
Status – Exempt Under CEQA Guidelines Section 15061(b)(3) and 15308.
RECOMMENDATION
Staff recommends that the City Council:
1. Adopt, by a four-fifths majority, the attached emergency ordinance (Attachment E)
to incorporate administrative amendments into Palo Alto Municipal Code 16.04,
which implements the California Building Code, and
2. Adopt, by a four-fifths majority, the attached emergency ordinance (Attachment F)
amending PAMC Chapter 16.17 to incorporate the 2025 Edition of the California
Energy Code with local amendments related to energy efficiency.
EXECUTIVE SUMMARY
Staff requests Council consideration of two emergency amendments to the California Building
Standards Code (CBSC) in response to new state law, ahead of the scheduled October triennial
update. The first amendment addresses definitions and certificate of occupancy requirements,
while the second introduces new energy reach codes for single-family homes, focusing on air
conditioning unit replacement and FlexPath requirements for major remodels.
The CBSC (CCR, Title 24) is updated every three years, and local jurisdictions may adopt it as
published or with more stringent amendments. The City has historically adopted stronger
Energy and Green Building standards to promote sustainable, low-emissions construction.
AB 130 (2025) restricts local amendments to residential building standards after October 1,
2025, unless certain exemptions apply. The proposed administrative amendments to the City’s
2022 building code must be adopted before September 30 to remain eligible for renewal, while
early adoption of energy reach codes is recommended to strengthen climate resilience.
Additional climate-related amendments will be brought forward in October when model code
language becomes available, and other amendments related to new construction will be
considered in 2026 following completion of statewide cost-effectiveness studies.
BACKGROUND
Every three years, California updates its Building Standards Code, known as Title 24, to
incorporate the latest technology, best practices, and policy goals for safe, efficient, and
sustainable buildings. Title 24 includes requirements for building safety, energy efficiency, and
green building practices. The California Green Building Standards Code (CALGreen) sets the
statewide baseline for sustainable design, such as water efficiency and waste reduction, while
the California Energy Code establishes minimum energy efficiency standards for insulation,
heating and cooling systems, lighting, and solar. The Energy Code increasingly uses metrics such
as “source energy” to account for the total fossil fuels and other resources consumed in
supplying energy to a building.
State law requires that local amendments to the Energy Code be both energy-saving and cost-
effective relative to the base codes. To make these findings, the City relies on cost-effectiveness
studies, generally performed by the California Energy Codes and Standards Statewide Utility
Program working group, which provide the technical basis to justify higher standards. Using
these studies, local governments may adopt “reach codes,” ordinances that exceed the state’s
minimum requirements, to meet community-specific sustainability and energy goals.
The City of Palo Alto updates its building codes every three years in alignment with the state’s
code cycle and often adopts local amendments that go beyond state minimum requirements. In
2008, Palo Alto established its first Energy Reach Code, and since then has regularly expanded
its local green building and energy reach codes to advance climate action priorities, including
those in the Sustainability and Climate Action Plan (S/CAP). The proposed amendments for the
2026–2028 Building Standards Code Cycle continue this approach and are detailed later in this
report.
Timing Considerations
In most code cycles, local amendments to the Energy Code for single-family, multi-family, and
non-residential building types are adopted together and take effect on January 1 of the first
year of the cycle. For the upcoming 2026–2028 cycle, however, two factors will alter the timing
and sequencing of some amendments.
First, the California Legislature passed AB 130 in June 2025, limiting the ability of local
jurisdictions to adopt most new local amendments to Title 24 building standards affecting
residential units after October 1, 2025. To ensure these proposals can be considered by the City
Council before that deadline, staff is advancing the single-family Energy Reach Code
recommendations now.
Second, reach codes for all residential building types cannot yet be proposed because Energy
Code amendments depend on the completion of cost-effectiveness studies. These studies,
typically completed by June of the year before the code cycle, are essential for justifying
standards that exceed the state minimum. This year, the studies for multi-family residential and
non-residential new construction have been delayed until late 2025 or early 2026, preventing
staff from developing multi-family reach code proposals in time for the AB 130 deadline.
As a result, any new reach codes for multi-family residential new construction will likely need to
be adopted after October 1, 2025, using one of AB 130’s exemptions. The non-residential
provisions are not subject to AB 130’s moratorium. This staged approach is intended to keep
Palo Alto aligned with the state’s triennial code updates while advancing local amendments
that reflect the City’s sustainability priorities and climate action goals.
Phased Implementation Strategy
To address both the timing constraints created by AB 130 and the City’s long-term sustainability
objectives, staff recommends the following phased approach for adopting California Building
Standards and local code amendments:
September 2025: Adopt select local amendments to the 2022 California Building Code,
effective immediately, and 2025 California Energy Code, effective January 1, 2026.
October 2025: Propose adoption of the remaining parts of the 2025 California Building
Standards Code, including re-adoption of currently active reach code amendments, also
effective January 1, 2026.
Spring 2026: Propose additional local amendments to the new construction Energy
Code for all building types, with an effective date of July 1, 2026, pending completion of
cost-effectiveness studies to support potential changes.
Proposed September 2025 Urgency Ordinance Amendments
This item includes adoption of two separate emergency ordinances:
1.Administrative Amendments to PAMC Chapter 16.04: These targeted changes, which
clarify certificate of occupancy requirements and applicability of certain definitions, are
intended to improve clarity and streamline code application. Although administrative in
nature, they are subject to AB 130’s moratorium on new amendments to Title 24
provisions that apply to residential units, and must be adopted prior to October 1, 2025
to remain enforceable without restriction. Adoption as an urgency ordinance would
allow them to take effect immediately and later serve as the basis for renewed local
amendments under AB 130’s exemptions.
2.Local Amendments to the California Energy Reach Code for Single-Family Homes,
Duplexes, and Townhomes: These proposals, supported by cost-effectiveness analysis,
include:
o Air Conditioner Time-of-Replacement Requirement – Requires specified energy
efficiency measures or installation of a heat pump system as the primary heating
source when replacing or installing an air conditioner. Exceptions are provided
for electrical panel limitations or oversized heating needs.
o FlexPath for Major Remodels – Requires additions or alterations over 1,000
square feet to incorporate a flexible package of efficiency or electrification
upgrades selected from an approved menu of measures, allowing for
customization based on project scope and building characteristics.
o Together, these amendments are intended to reduce fossil fuel reliance, lower
greenhouse gas emissions, and prepare homes for a more efficient, electric-
ready future, while aligning with state requirements, advancing Palo Alto’s
climate action targets, and supporting timely adoption before AB 130’s October
1, 2025 deadline. While adopting these amendments before October 1 (via an
emergency ordinance) may allow the City to avoid the AB 130 moratorium, AB
130 is a new law and its interpretation is untested. City staff will be prepared to
bring the energy reach code for re-adoption later on using exemptions to the
moratorium if necessary.
Table 1 below provides an overview of the timeline for adoption of the proposed local reach
code amendments.
Table 1. Local Code Amendment Timeline
Table 1: Local Code Amendment Timeline
Local Code AmendmentsAdoption
Date Green Building Reach Code Energy Reach Code
September
2025
None Air Conditioner Time of
Replacement
FlexPath
October
2025
Carry forward previous local Green
Building Code amendments1 (including
CALGreen Tier 1 & 2 adoption)
LEED Certification Alternative
Compliance Pathway
Embodied Carbon Threshold
EV Readiness
Carry forward previous local
Energy Code amendments, as
supported by cost effectiveness
studies
Spring 2026
None Potential additional Energy Code
amendments as supported by
newly available cost
effectiveness studies and model
1 More detail provided in Attachment A
Table 1: Local Code Amendment Timeline
Local Code AmendmentsAdoption
Date Green Building Reach Code Energy Reach Code
code language. E.g., Gas
Water Heater Time of
Replacement
ANALYSIS
Administrative Amendments to PAMC Chapter 16.04
PAMC Chapter 16.04 implements the California Building Code within the City. Staff are
proposing targeted amendments to improve the code’s clarity. The proposed changes include:
Certificate of Occupancy Requirements – Clearly establishing which types of buildings
or occupancies must obtain a certificate of occupancy prior to use.
Definitions – Clarifying applicability of certain definitions.
These amendments refine both the administrative and technical provisions of the adopted
codes that fall within the City’s local authority. Adoption prior to AB 130’s October 1, 2025
deadline is intended to keep these provisions enforceable without restriction. Staff
recommends the Council adopt an ordinance codifying these changes, which staff will promptly
file with the California Building Standards Commission. By adopting the ordinance as an
emergency ordinance, Council intends the changes to take effect before AB 130’s October 1,
2025 deadline, allowing the City to renew these local amendments in the future.
Local Amendments to the California Energy Reach Code for Single-Family Homes, Duplexes, and
Townhomes
Potential Energy Code local amendments require cost-effectiveness studies before they can be
adopted. They must be more stringent than the California Energy Code, generally using the
metrics established by that code (such as source energy). At this time, staff are proposing two
different types of energy code amendments that are supported by the appropriate cost-
effectiveness studies:
Time of replacement requirements for air conditioners that would require either energy
efficiency measures or installation of heat pumps when equipment is replaced.
Time of remodel requirements that would require a flexible combination energy
efficiency or electrification measures known as ”FlexPath”.
AC to Heat Pump Time of Replacement Requirement
The proposed ordinance would require that projects in single-family homes, duplexes and
townhomes involving replacement or alteration of an existing air conditioning system or
installation of a new air conditioning system must either include a heat pump space conditioner
as the primary heating system or install specific energy efficiency measures. The attached study
commissioned by the California Codes and Standard Program (see Attachment B) has found
that the proposed requirements are cost-effective and will result in a reduction in Long-Term
System Cost (LSC)2 energy. Heat pumps are far more efficient than gas furnaces and result in
fewer greenhouse gas emissions.
If a project applicant installed a heat pump (an air conditioner that is also configured to
function as a space heater) they could either replace the furnace with an air handler unit or
leave the furnace in place to serve as the air handler for the heat pump and as a back-up
heating system. California Energy Code requirements would apply; these vary depending upon
whether the duct system is replaced at the same time.
Alternatively, a project could comply by installing an air conditioner but relying on a gas furnace
for space heating. Again, certain California Energy Code requirements would apply when
replacing an air conditioner. In addition, this alternative would require other energy efficiency
measures including attic insulation and air sealing.
Table 2 presents four different compliance paths. Note that additional requirements would
apply where the air conditioner is not configured as a heat pump space conditioner.
Table 2: Summary of Requirements
System Ducts
Condition State Code Requirements Additional Local Code
Requirements
Existing
Duct sealing (10% leakage)
Airflow efficiency (300 CFM/ton)
Refrigerant charge verification
None
Heat
Pump
New
Duct sealing (5% leakage)
Airflow efficiency (350 CFM/ton)
Fan efficacy (0.58 W/CFM)
Refrigerant charge verification
Attic insulation (R-49)
Air sealing
R-8 Duct insulation
None
Existing
Duct sealing (10% leakage)
Airflow efficiency (300 CFM/ton)
Refrigerant charge verification
Fan efficacy (0.45 watts/CFM)
Attic insulation (R-49)
Air sealing
AC
New Duct sealing (5% leakage)Refrigerant charge verification
2 Formerly known as Time Dependent Valuation (TDV) energy cost savings, LSC reflects the Energy Commission’s
current LCC methodology, which is intended to capture the total value or cost of energy use over 30 years. This
method accounts for the hourly cost of marginal generation, transmission and distribution, fuel, capacity, losses,
and cap-and-trade-based CO2 emissions (California Energy Commission, 2023). This is the methodology used by
the Energy Commission in evaluating cost-effectiveness for efficiency measures in the 2025 Energy Code.
Table 2: Summary of Requirements
System Ducts
Condition State Code Requirements Additional Local Code
Requirements
Airflow efficiency (350 CFM/ton)
Fan efficacy (0.45 W/CFM)
Attic Insulation (R-49)
Air sealing
R-8 Duct insulation
Fan efficacy (0.35 watts/CFM)
The 2025 Single Family AC to HP Cost Effectiveness Study attached as Attachment B finds some
incremental costs associated with converting to a heat pump, but these costs can be offset by
utility bill savings over the lifetime of the equipment. The lifetime of a furnace and air
conditioner are about the same, so it often makes economic sense to replace both if the
furnace is near the end of its life. In this scenario, the cost of the furnace replacement is
assumed as part of the base project cost. Alternatively, a heat pump could be configured to
operate as the primary heating source using the air handler in the existing furnace and using
the furnace for supplemental heating on very cold days. Table 3 below compares the
incremental cost and lifecycle savings (net present value of utility bill savings less incremental
cost) for each approach assuming a modest gas rate escalation.
Table 3. Economic Costs and Savings
Approach Incremental Cost Lifecycle
Savings
Heat pump with new air handler (furnace removed) $652 $556
Heat pump with existing furnace retained $1,670 $2,132
The costs may be able to be further offset by incentives offered through local utility rebate
programs, depending on whether these are retained after the mandate takes effect.
In terms of greenhouse gas emissions, heat pumps can provide significant reductions. This is
because heat pumps are far more efficient than gas furnaces (and electric resistance heat) and
electricity in California is derived from low-carbon energy sources. Table 4 shows greenhouse
gas reductions for both approaches generated using the statewide Cost Effectiveness Explorer
tool.
Table 4. Greenhouse Gas Reductions
Climate
Zone Approach
GHG Reduction
(tons annually)
GHG Reductions
(%)
CZ04 Heat pump & new air handler (furnace removed)0.84 30%
CZ04 Heat pump with existing furnace retained 0.63 22%
The proposed policy offers two general exceptions. The first is for situations where the
electrical panel capacity is insufficient to meet the load of a heat pump. The second is where
the heat pump would need to be sized more than 12,000 Btu/hr (1 ton) over the air conditioner
that would be installed. There are also exceptions to the duct sealing and airflow requirements
that specify alternative methods of compliance. All applicable exceptions in the California
Energy Code apply.
The statewide cost-effectiveness study for the air conditioner time of replacement
requirements is included in Attachment B. Staff is recommending adoption at this time of a
replacement requirement to be effective starting on January 1, 2027, allowing more time to
launch and run programs to support heat pump HVAC adoption.
FlexPath
Staff proposes that single-family residential major additions and alterations3 greater than 1,000
square feet be required to include certain energy efficiency measures. Depending on the
project scope, applicants of these types of projects typically already have an architect,
engineer, and energy code compliance expert on their design team who can help facilitate
compliance with the FlexPath energy code amendment. As proposed, qualifying single-family
projects would be required to complete any combination of energy-related measures from
Table 5 below totaling 12 or more points. Additional measure descriptions can be found in
Attachment C.
Table 5. Measures
Building Vintage Measures
Pre-1978 1978-1991 1992-2010
Water Heating Package 1 1 1
Air Sealing 2 1 1
R-38 Attic Insulation 7 3 1
R-49 Attic Insulation 7 3 1
Duct Sealing 6 4 1
New Ducts, R-6 Insulation + Duct Sealing 10 7 2
New Ducts, R-8 Insulation + Duct Sealing 11 8 3
Windows 6 5 3
Wall Insulation 6 --
R-19 Raised floor insulation 8 8 -
R-30 Raised floor insulation 9 9 -
Radiant Barrier Under Roof 3 2 1
Heat Pump Water Heater Replacing Gas 12 12 12
High Eff. Heat Pump Water Heater Replacing Gas 13 13 13
3 Alterations include raising the plate height, historic restoration, changes or rearrangements of the structural
parts or elements, and changes or rearrangement of bearing walls and full height partitions. Normal maintenance,
reroofing, painting or wall papering, floor finishes, replacement-in-kind of mechanical, plumbing and electrical
systems, or replacing or adding new kitchen counter and similar furniture, plumbing fixture to the building are
excluded
Table 5. Measures
Building Vintage Measures
Pre-1978 1978-1991 1992-2010
Heat Pump Water Heater Replacing Electric 4 4 4
High Eff. Heat Pump Water Heater Replacing Electric 5 5 5
Heat Pump Space Conditioning System 21 16 13
High Eff. Heat Pump Space Conditioning System 23 18 15
Dual Fuel Heat Pump Space Conditioning System 15 11 10
Heat Pump Clothes Dryer 1 1 1
Induction Cooktop 1 1 1
Solar PV 17 17 15
To accommodate the wide variability in existing buildings, staff proposes the following
exemptions (the list below provides a brief overview of exemptions which are described in
greater detail in Attachment F):
New Units
1. Mobile Homes, Manufactured Housing, or Factory-built Housing
2. Repairs
3. Emergency Housing
4. Technological or Economic Infeasibility
5. Energy usage of alternative proposed design better than requirement
6. Pre-Compliance
7. Covenant Restrictions
8. New Construction
9. Improvement projects limited to solar PV, EV charging, or battery storage
10. Hardship for Low-Income Owners
11. Historic Buildings
12. Hazard Mitigation (i.e. Seismic upgrades)
13. Alterations that consist solely of roof and/or window projects
14. State-exempted ADUs per SB1211
The CEC provides two different cost effectiveness metrics. “On-bill” cost effectiveness refers to
the direct cost experienced by the homeowner. For something to be cost effective “on-bill”, the
energy bill savings of a measure must at least pay for the cost of that measure over a 20-year
period. The other approach is “Long-Term Systemwide Cost” (LSC). LSC considers the cost to
install energy efficiency measures, the on-bill savings from those measures, and larger system
costs that everyone pays for like energy infrastructure costs and the impacts of climate change.
For CEC approval, a local amendment to the California Energy Code must show a compliance
pathway that is either “on-bill” or “LSC” cost effective. As described below, staff’s proposed
policy has “on-bill” and “LSC” cost effective compliance pathways.
In support of reach code development, the California Energy Codes and Standards Statewide
Utility Program, which includes the State's Investor-Owned Utilities (Pacific Gas, and Electric
(PG&E), San Diego Gas and Electric (SDG&E), and Southern California Edison (SCE), under the
auspices of the California Public Utilities Commission) developed and published the 2025 Single
Family Cost Effectiveness Report, provided as Attachment C and further supported by an
updated memo provided as Attachment D. This study and the associated cost-effectiveness
data are highly detailed and are included in the record to support Council’s findings and policy
decisions.
Based on the study, staff recommends finding the proposed local additions and alterations
amendments to the 2025 California Energy Code to be cost-effective and consume less energy
than otherwise permitted by Title 24, Part 6. The target score of 12 points can be achieved cost-
effectively for all building vintages through the installation of a heat pump water heater or heat
pump space conditioner replacing a corresponding gas appliance. The 12-point target can also
be met only through the installation of energy efficiency improvements without the need for
fuel-substitution measures. For example, R-30 raised floor insulation combined with R-49 attic
insulation in any pre-1991 building. Estimates of the incremental costs and lifecycle savings
associated with FlexPath compliance pathways mentioned above are included in Table 6. Each
unique combination of measures and building vintages will have its own associated costs and
savings. Additional measure information, including incremental cost estimates, is available
through a Cost-Effectiveness Explorer4 tool published by the California Energy Codes and
Standards Statewide Utility Program working group.
Table 6. FlexPath Compliance Pathway Costs and Savings
Measures Incremental Cost Lifecycle
Savings
Heat pump water heater $4,332 $5,358
R-30 raised floor insulation + R-49 attic insulation $7,725 $14,403
FISCAL/RESOURCE IMPACT
Development and implementation of local amendments to the 2026-2028 State Energy and
Green Building Standards Codes is planned to be absorbed within existing budgets for Planning
and Development Services and Utilities. Resource needs are anticipated to include about 0.5
FTE in staff time and $248,000 in professional services costs spread across FY 2025 and FY 2026.
Resource needs are under continued evaluation and may result in an additional funding request
if deemed necessary.
4 Cost Effectiveness Explorer;
https://explorer.localenergycodes.com/policies/4287/requirements?per_component_name=PolicyExistingBuilding
sWithFlexiblePathRequirements&per_climate_zone_raw=4-CPAU&per_custom_combination_id=22972
STAKEHOLDER ENGAGEMENT
Staff hosted two community meetings on the Building Standards Code update. The first, a
focus group with approximately 10 design professionals, was held on August 12, 2025. The
second, a hybrid community meeting on August 13, 2025, drew 13 attendees. Meetings were
advertised via the City website, Uplift Local newsletter, City calendar, NextDoor, Facebook, and
targeted email notices to approximately 100 community members and design professionals.
Feedback covered all 2025 proposals, including Green Building Code amendments scheduled
for Council review in October. Key themes included:
FlexPath: Stakeholders suggested adding/removing measures or adjusting point values.
Staff explained changes would require new cost-effectives studies and could be
considered in the future.
Water Heaters: Questions focused on alignment with Bay Area Air District Zero-NOx
standards (2027). Staff expects statewide model code language will incorporate
exemptions. A request to allow electric resistance water heaters in ADUs was discussed;
staff noted this option is inefficient and rarely complaint under state Energy Code.
Water Conservation: Suggestions were made to add elective CALGreen Tier 1 and 2
measures (e.g., toilet efficiency). Staff clarified these are already permissible under
“innovative concepts” and will improve applicant guidance.
Other Suggestions: Additional future considerations included requiring electric stoves at
replacement, regulating gas appliances under air quality authority, adopting passive
house standards, adjusting EV readiness requirements, and updating electric load
calculations.
Staff is reviewing these suggestions for possible inclusion in October local amendments or in
future round of amendments.
ENVIRONMENTAL REVIEW
The recommended action in this report is exempt from the California Environmental Quality Act
(CEQA) in accordance with CEQA Guidelines section 15308 as an action by the City for the
protection of the environment, and under section 15061(b)(3) on the grounds that the
proposed standards are more stringent than the State standards, there are no reasonably
foreseeable adverse environmental impacts and there is no possibility that the activity in
question may have a significant adverse effect on the environment.
ATTACHMENTS
Attachment A: GBC Applicability and Existing Reach Code Amendments
Attachment B: 2025 Cost-Effectiveness Study: Single Family AC to Heat Pump Replacement
Attachment C: 2022 Cost - Effectiveness Study: Existing Single Family Building Upgrades
Attachment D: Application of the 2022 Studies to the 2025 Energy Code: Existing Single Family
Building Upgrades
Attachment E: Emergency Ordinance Amending PAMC Chapter 16.04 to Adopt Administrative
Amendments to the 2022 California Building Code
Attachment F: Emergency Ordinance Amending PAMC Chapter 16.17 to Adopt the 2025
California Energy Code and Local Amendments, Adding FlexPath and Air Conditioner Time-of-
Replacement Requirement
APPROVED BY:
Jonathan Lait, Planning and Development Services Director
Green Building Code Applicability Requirements and Existing Local Amendments
Single Family CalGreen Code Applicability
Scope of Work Current requirements
ADU conversions, alterations, additions CalGreen Mandatory
Alterations / Additions that Increase conditioned
area and do not trigger Tier 1 requirements
CalGreen Mandatory
Additions / Alterations1 >1000 sf CalGreen Mandatory + Tier 1
New construction or substantial remodel CalGreen Mandatory + Tier 2
Multi-Family CalGreen Code Applicability
Scope of Work Current requirements
Alterations / Additions that Increase conditioned
area and do not trigger Tier 1 requirements
CalGreen Mandatory
Additions / Alterations1 >1000 sf CalGreen Mandatory + Tier 1
New construction or substantial remodel CalGreen Mandatory + Tier 2
Non-Residential CalGreen Code Applicability
Scope of Work Current requirements
Tenant Improvements (Tis), Renovations, Alterations
w/ $200,000 permit valuation and do not trigger Tier
1 or Tier 2 requirements
CalGreen Mandatory
TIs, Renovations, Alterations > 5,000 SF w/
replacement of two systems: HVAC system, building
envelope, hot water system, lighting system
CalGreen Mandatory + Tier 1
Additions > 1,000 SF CALGreen Mandatory + Tier 2
New construction CalGreen Mandatory + Tier 2
1 Alterations include raising the plate height, historic restoration, changes or rearrangements of the
structural parts or elements, and changes or rearrangement of bearing walls and full height partitions.
Normal maintenance, reroofing, painting or wall papering, floor finishes, replacement-in-kind of
mechanical, plumbing and electrical systems, or replacing or adding new kitchen counter and similar
furniture, plumbing fixture to the building are excluded for the purposes of establishing scope of Tier 1
projects (PAMC 16.14.080).
Attachment A
Existing Local Amendments to the Green Building Code
Applies To:
Single
Family
Multi
Family
Non
Res
Third-party Green Building Special Inspector required for all projects
(PAMC 16.14.080)X X X
Low-carbon concrete requirements for Tier 1 and Tier 2 projects
(PAMC 16.14.080, PAMC 16.14.240)X X X
Deconstruction and construction materials management (PAMC
16.14.150, PAMC 5.24)X X X
Cement and concrete made with recycled products (PAMC 16.14.420)X
Enhanced construction waste reduction of 80% X X X
Local storm water pollution prevention for new construction and
additions (PAMC 16.14.290)X
Invasive species prohibited (PAMC 16.14.330)X
Indoor Air Quality Management Plan (PAMC 16.14.390)X X
Recycled water infrastructure for irrigation X X
Cooling tower water use X X
Swimming pool and spa covers – vapor retardant cover required
(PAMC 16.14.100)X X
Non-residential enhanced water budget (PAMC 16.14.340)X
Energy STAR portfolio manager profile for energy and water use,
energy and water performance reviews (PAMC 16.14.360, 370, 380)X
Full electrification of outdoor grills, stoves, and barbeques (PAMC
16.14.090)X X X
Electric readiness requirements (PAMC 16.14.190/410, PAMC 16.17)X X X
Enhanced EV Charging requirements
(PAMC 16.14.160, PAMC 16.14.400)X X X
Summary of Enhanced EV Charging Requirements in the Green Building Code
For clarity, the table below summarizes the EV charging requirements in the Green Building Code at a
high level and are accurate for most projects. For precise requirements see PAMC 16.14.160 and
16.14.400.
Single
Family
Multi-family Hotels/Motels Nonresidential
New
Construction
of Any Size
(including
substantial
remodel for
residential)
Install 1 EV
Ready
Space
OR
Install 1
Level 2 EV
Charger
Exception:
Accessory
Dwelling
Unit (ADU)
Resident Parking: For
each residential unit,
install one Level 2 EV
Charger
OR
Install one Level 2 EV
Ready Space for each
residential unit
AND
Guest Parking: 25% EV
Capable, EV Ready, EV
Chargers
AND
10% EV Chargers
Installed
40% EV Ready
AND
10% Level 2 EV
Chargers
Installed
10 to 20 parking
spaces: 20% EV
Capable or EV
Ready Space
AND
20% Level 2 EV
Chargers Installed
OR
Over 20 parking
spaces: 15% EV
Capable or EV
Ready Space
AND
15% EV Chargers
Installed
2025 Cost-Effectiveness Study:Single Family AC to Heat Pump Replacement
Prepared by:Ada Shen, Alea German, Keith Saechao, & Marc Hoeschele, Frontier Energy, Inc Misti Bruceri, Misti Bruceri & Associates, LLC
Prepared for:Kelly Cunningham, Codes and Standards Program, Pacific Gas and Electric
Revision: 1.0 Last modified: 2025/06/09
1 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
Legal Notice
This report was prepared by Pacific Gas and Electric Company and funded by the California utility customers under the auspices of the California Public Utilities Commission.
Copyright 2025, Pacific Gas and Electric Company. All rights reserved, except that this document may be used, copied, and distributed without modification.
Neither PG&E nor any of its employees makes any warranty, express or implied; or assumes any legal liability or responsibility for the accuracy, completeness or usefulness of any data, information, method, product, policy or process disclosed in this document; or represents that its use will not infringe any privately-owned rights including, but not limited to, patents, trademarks or copyrights.
Table 1. Summary of Revisions
Date Description Reference (page or section)
6/09/2025 Original Release N/A
2025/06/09
2 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
Acronym List
AC – Air conditioner
ACH50 – Air Changes per
Hour at 50 pascals pressure differential
AFUE – Annual Fuel Utilization Efficiency
B/C – Lifecycle Benefit-to-Cost Ratio
BSC – Building Standards Commission
CA IOUs – California Investor-Owned Utilities
CARE – California Alternate Rates for Energy
CASE – Codes and Standards Enhancement
CBECC-Res – Computer program developed by the
California Energy Commission for
demonstrating compliance with the California Residential Building Energy Efficiency Standards
CFM – Cubic Feet per Minute
CO2 – Carbon Dioxide
CPAU – City of Palo Alto
Utilities
CPUC – California Public
Utilities Commission
CZ – California Climate
Zone
DFHP – Dual Fuel Heat
Pump
DHW – Domestic Hot Water
DOE – Department of Energy
EDR – Energy Design Rating
EER – Energy Efficiency Ratio
EF – Energy Factor
GHG – Greenhouse Gas
HPWH – Heat Pump Water Heater
HSPF – Heating Seasonal Performance Factor
HVAC – Heating, Ventilation, and Air Conditioning
IOU – Investor Owned
Utility
kBtu – kilo-British thermal
unit
kWh – Kilowatt Hour
LCC – Lifecycle Cost
LLAHU – Low Leakage Air Handler Unit
VLLDCS – Verified Low Leakage Ducts in Conditioned Space
NEEA – Northwest Energy Efficiency Alliance
NEM – Net Energy Metering
NPV – Net Present Value
PG&E – Pacific Gas and Electric Company
PV – Photovoltaic
SCE – Southern California
Edison
SDG&E – San Diego Gas and Electric
SEER – Seasonal Energy Efficiency Ratio
SF – Single Family
SMUD – Sacramento Municipal Utility District
SoCalGas – Southern California Gas Company
TDV – Time Dependent Valuation
Therm – Unit for quantity of heat that equals 100,000 British thermal units
Title 24 – Title 24, Part 6
TOU – Time-Of-Use
UEF – Uniform Energy Factor
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1 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
Table of Contents
Executive Summary............................................................................................................4
1 Introduction..................................................................................................................7
2 Methodology and Assumptions ..................................................................................9
2.1 Modeling............................................................................................................... 9
2.2 Prototype Characteristics.....................................................................................10
2.3 Cost-Effectiveness Approach..............................................................................13
2.3.1 Benefits ...........................................................................................................13
2.3.2 Costs ...............................................................................................................13
2.3.3 Metrics.............................................................................................................15
2.3.4 Utility Rates .....................................................................................................16
2.4 Measure Details and Cost....................................................................................18
2.4.1 Lifecycle Cost Assuming Zero-NOx Standards for Space Heating After 2030 ..20
3 Results........................................................................................................................22
3.1 Cost-Effectiveness Results ..................................................................................22
3.1.1 Cost Effectiveness Results Using Standard Tariffs...........................................23
3.1.2 Cost Effectiveness Results Using CARE Tariffs ...............................................26
3.2 Zero-NOx Scenario Results .................................................................................28
3.3 AC Pathways for Heat Pump Replacements........................................................30
4 Recommendations and Discussion..........................................................................33
5 References .................................................................................................................36
6 Appendices ................................................................................................................38
6.1 Map of California Climate Zones..........................................................................38
6.2 Cost-Effectiveness Results ..................................................................................39
6.2.1 Standard Rates................................................................................................39
6.2.2 CARE tariffs.....................................................................................................45
6.3 Utility Rate Schedules..........................................................................................51
6.3.1 Pacific Gas & Electric.......................................................................................51
6.3.2 Southern California Edison ..............................................................................60
6.3.3 Southern California Gas...................................................................................64
6.3.4 San Diego Gas & Electric ................................................................................65
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2 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
6.3.5 City of Palo Alto Utilities ...................................................................................72
6.3.6 Sacramento Municipal Utilities District (Electric Only) ......................................74
6.3.7 Fuel Escalation Assumptions ...........................................................................76
List of Tables
Table 1. Summary of Revisions............................................................................................ 1
Table 2. Residential Prototype Characteristics ....................................................................
Table 9. HVAC Measure Cost Assumptions – 4-Ton Electric Replacements ........................
Table 11. Lifecycle Incremental Cost Breakdown for 4-Ton System with no Gas Furnaces
Table 19. DFHP Existing Furnace LSC Savings (Zero-NOx Rule).......................................
Table 23. [Pre-1978] Standard Efficiency HPSH..................................................................
Table 33. [1978-1991] High Efficiency HPSH CARE............................................................
Table 3. Efficiency Characteristics for Three Vintage Cases................................................12
Table 4. System Sizing by Climate Zone .............................................................................15
Table 5. Investor-Owned Utility Tariffs Used Based on Climate Zone ..................................16
Table 6. Publicly Owned Utility Tariffs Used Based on Climate Zone...................................17
Table 7. Lifecycle Incremental Cost Breakdown for a 4-Ton DFHP Existing Furnace...........19
Table 8. Lifecycle Incremental Cost Breakdown for 4-Ton HPSH ........................................19
Table 10. SCAQMD Rule 1111 Proposed Manufacturer Compliance Targets.......................20
after 2030............................................................................................................................21
Table 12. [1992-2010] DFHP Existing Furnace....................................................................23
Table 13. [1992-2010] Standard Efficiency HPSH ...............................................................24
Table 14. [1992-2010] High Efficiency HPSH ......................................................................25
Table 15. [1992-2010] DFHP Existing Furnace CARE.........................................................26
Table 16. [1992-2010] Standard Efficiency HPSH CARE ....................................................27
Table 17. [1992-2010] High Efficiency HPSH CARE............................................................28
Table 18. DFHP Existing Furnace On-Bill NPV (Zero-NOx Rule).........................................29
Table 20. New AC Only Path Cost Estimates ......................................................................32
Table 21. New AC/Furnace and New Ducts Path Cost Estimates........................................32
Table 22. [Pre-1978] DFHP Existing Furnace......................................................................39
Table 24. [Pre-1978] High Efficiency HPSH.........................................................................41
Table 25. [1978-1991] DFHP Existing Furnace....................................................................42
Table 26. [1978-1991] Standard Efficiency HPSH ...............................................................43
Table 27. [1978-1991] High Efficiency HPSH ......................................................................44
Table 28. [Pre-1978] DFHP Existing Furnace CARE ...........................................................45
Table 29. [Pre-1978] Standard Efficiency HPSH CARE.......................................................46
Table 30. [Pre-1978] High Efficiency HPSH CARE..............................................................47
Table 31. [1978-1991] DFHP Existing Furnace CARE.........................................................48
Table 32. [1978-1991] Standard Efficiency HPSH CARE ....................................................49
Table 34. PG&E Baseline Territory by Climate Zone............................................................51
Table 35. PG&E Monthly Gas Rate ($/therm)......................................................................52
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3 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
Table 36. SCE Baseline Territory by Climate Zone ..............................................................60
Table 37. SoCalGas Baseline Territory by Climate Zone .....................................................64
Table 38. SoCalGas Monthly Gas Rate ($/therm)................................................................65
Table 39. SDG&E Baseline Territory by Climate Zone .........................................................65
Table 40. SDG&E Monthly Gas Rate ($/therm) ...................................................................66
Table 41. CPAU Monthly Gas Rate ($/therm) ......................................................................72
Table 42. Real Utility Rate Escalation Rate Assumptions, CPUC En Banc and 2022 TDV
Basis...................................................................................................................................77
Table 43. Real Utility Rate Escalation Rate Assumptions, 2025 LSC Basis.........................78
List of Figures
Figure 1. AC vs. Heat Pump Pathway Requirements ..........................................................31
Figure 2. AC vs. Heat Pump Energy Comparison................................................................31
Figure 3. Map of California climate zones. ..........................................................................38
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4 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
Executive Summary
The California Codes and Standards (C&S) Reach Codes program, also known as the Local
Energy Codes program, provides technical support to local governments considering
adopting a local ordinance (reach code) intended to support meeting local and/or statewide
energy efficiency and greenhouse gas (GHG) reduction goals. The program facilitates
adoption and implementation of the code when requested by local jurisdictions by providing
resources such as cost-effectiveness studies, model language, sample findings, and other
supporting documentation.
It is important to note that there is a voluntary measure in the 2025 CALGreen for replacing
an air conditioner with a heat pump at time of air conditioner replacement, which can be
adopted as is. This report seeks to provide options to modify the heat pump measure, and
demonstrate the cost-effectiveness of these options.
This analysis used two different metrics to assess the cost-effectiveness of the proposed
upgrades for a 1,665 square foot single family home prototype with an attached garage.
Both methodologies require estimating and quantifying the incremental costs and energy
savings associated with each energy efficiency measure over a 30-year analysis period. On-
Bill cost-effectiveness is an occupant-based lifecycle cost (LCC) approach that values
energy based upon estimated site energy usage and customer utility bill savings using
today’s electricity and natural gas utility tariffs. To reflect how natural gas prices fluctuate
with seasonal supply and demand, a normalized curve was used to estimate the cost for the
remaining months relative to today’s rates. Long-term Systemwide Cost (LSC) is the
California Energy Commission’s metric for determining cost-effectiveness of efficiency
measures in the 2025 Energy Code. This metric is intended to capture the long-term
projected cost of energy including costs for providing energy during peak periods of
demand, carbon emissions, grid transmission and distribution impacts.
Local jurisdictions may adopt ordinances that amend different parts of the California Building
Standards Code or may elect to amend other state or municipal codes. The decision
regarding which code to amend will determine the specific requirements that must be
followed for an ordinance to be legally enforceable. For example, reach codes that amend
Part 6 of the California Building Code (the Energy Code) and require energy performance
beyond state code minimums must demonstrate the proposed changes are cost-effective
and obtain approval from the Energy Commission as well as the Building Standards
Commission (BSC). Amendments to Part 11, such as requirements for increased water
efficiency or electric vehicle infrastructure only require BSC approval and do not require the
Energy Commission approval. Although a cost-effectiveness study is only required to amend
Part 6 of the California Building Code, this study provides valuable context for jurisdictions
pursuing other ordinance paths to understand the economic impacts of the policy decision.
This study documents the estimated costs, benefits, energy impacts and greenhouse gas
emission reductions that may result from implementing an ordinance based on the results to
help residents, local leadership, and other stakeholders make informed policy decisions.
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5 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
The following summarizes key results:
1. Heat pumps are significantly more efficient than gas furnaces, requiring less than
half the energy to meet the heating load. However, despite this reduction in heating
energy use, the cost of heating a home using electricity (heat pump) could be higher
than the cost to heat that same home with natural gas (furnace), depending on the
electricity tariffs relative to the gas tariffs. Therefore, while a heat pump measure
could be deemed as cost-effective over its lifecycle, installing a heat pump could
result in a decrease or an increase in utility costs in the first years relative to a gas
furnace and AC system.
2. The study assumes utility rates escalate over time. Because it is very difficult to
predict how the rates will change, the analysis presents two escalation scenarios
(modest and high gas escalation) to represent a range of outcomes.
3. The LSC metric most often produces more favorable cost-effectiveness results
relative to the results produced using actual utility costs (On-Bill). When the analysis
assumes a higher escalation rate for natural gas costs relative to electricity in future
years (high gas escalation), the On-Bill results are more favorable in some cases.
a. In the oldest (pre-1978) vintage, all three measures (dual fuel heat pump with
existing furnace, standard heat pump space heater, and high efficiency heat
pump space heater) are cost-effective using the LSC metric in all climate
zones. When using the On-Bill metric, the measures remain cost-effective in
most climate zones.
b. In the newer (1978-1991 and 1992-2010) vintages, the dual fuel heat pump
(DFHP Existing Furnace) and the standard efficiency HPSH are cost-effective
based on LSC in all cases except for Climate Zone 15 when using both the
standard and California Alternate Rates for Energy (CARE) tariff.
4. Using the CARE tariff results in higher cost savings and cost-effectiveness relative to
standard rates, with almost all cases yielding first year utility cost savings. The DFHP
Existing Furnace is On-Bill cost-effective based on the high gas escalation scenario
in all cases in the pre-1978 vintage, and almost all cases in the 1978-1991 and
1992-2010 vintage. It is also On-Bill cost-effective in most climate zones for the
modest gas escalation scenario across all vintages. In Climate Zones 5, 8, 9, 10, 14,
and 15, cost-effectiveness declines relative to other areas, and in some cases is not
cost-effective from an On-Bill perspective. This is the case for both the CARE tariff
and the standard rate.
5. The analysis also modeled the cost impact of using a standard time-of-use electricity
tariff versus switching to a newer electrification tariff, designed to reduce costs in
homes with heat pumps and/or electric vehicles. Older homes tend to be the least
efficient and achieve the most savings from improving equipment efficiency. In most
of the state, because older homes tend to use more electricity than a similarly sized,
newer vintage home, they realize more costs savings under the electrification tariff.
Newer homes tend to use less electricity and therefore do not realize the same cost
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6 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
savings from switching tariffs; they generally perform better under the standard tariff.
This trend is different in milder climate zones in SCE territory (excluding CZ 15),
where newer homes realize more cost savings. Both the standard and electrification
tariffs in SCE territory include a daily allocation of lower-cost baseline electricity and
a second, higher-priced tier when the baseline is exceeded. In many newer homes,
a higher percentage of overall electricity use is within the baseline allocation,
resulting in greater cost savings.
6. Higher efficiency equipment reduces utility costs in all cases and improves cost-
effectiveness in many climate zones in the oldest vintage relative to standard
efficiency equipment. However, in more efficient newer homes, where cost-
effectiveness is generally lower, the savings are insufficient to offset the roughly
$3,000 increase in incremental cost.
7. Given the adopted Bay Area Air Quality Management District (BAAD) Zero NOx rule,
and the proposed California Air Resource Board or South Coast Air Quality
Management District (SCAQMD) Zero-NOx rules, and gas furnaces are no longer
available or less available to be installed in 2030, a sensitivity analysis was
performed for the Zero NOx scenario and found that cost-effectiveness declines in
many cases except in Climate Zones 8-10, some results improve enough to become
cost-effective. The improved cost-effectiveness in Climate Zones 8-10 is due to the
higher baseline cost when a HPSH must be installed at year 10 when the furnace
must be replaced. However, the overall magnitude of 30-year On-Bill cost-
effectiveness is lower because there are only 10 years of utility cost savings. After
year 10 the base case and upgrade measures are both heat pumps.
This report documents the key results and conclusions from the Reach Codes Team
analysis. A full dataset of all results can be downloaded at
https://localenergycodes.com/content/resources. Results alongside policy options can also
be explored using the Cost-effectiveness Explorer at https://explorer.localenergycodes.com/.
Model ordinance language and other resources are posted on the C&S Reach Codes
Program website at LocalEnergyCodes.com. Local jurisdictions that are considering
adopting an ordinance may contact the program for further technical support at
info@localenergycodes.com.
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7 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
1 Introduction
The California Codes and Standards Reach Codes program, also known as the Local
Energy Codes program, provides technical support to local governments considering
adopting a local ordinance intended to support meeting local and/or statewide energy
efficiency and greenhouse gas (GHG) reduction goals. The program facilitates adoption and
implementation of the code when requested by local jurisdictions by providing resources
such as cost-effectiveness studies, model language, sample findings, and other supporting
documentation.
Local jurisdictions may adopt ordinances that amend different parts of the California Building
Standards Code or may elect to amend other state or municipal codes. The decision
regarding which code to amend will determine the specific requirements that must be
followed for an ordinance to be legally enforceable. For example, reach codes that amend
Part 6 of the California Building Code (the Energy Code) (CEC, 2025) and require energy
performance beyond state code minimums must demonstrate the proposed changes are
cost-effective and obtain approval from the Energy Commission as well as the Building
Standards Commission (BSC). Amendments to Part 11, such as requirements for increased
water efficiency or electric vehicle infrastructure only require BSC approval and do not
require the Energy Commission approval. Although a cost-effectiveness study is only
required to amend Part 6 of the California Building Code, this study provides valuable
context for jurisdictions pursuing other ordinance paths to understand the economic impacts
of the policy decision. This study documents the estimated costs, benefits, energy impacts
and greenhouse gas emission reductions that may result from implementing an ordinance
based on the results to help residents, local leadership, and other stakeholders make
informed policy decisions.
This report is an update to the 2022 Single Family Retrofit Cost-effectiveness Study
(Statewide Reach Codes Team, 2024) focused on an ordinance structure that encourages
air conditioner (AC) to heat pump replacement. The methodology, prototype characteristics,
and relevant measure packages are retained from the main study referenced above. The
study includes updated utility rates, revised costs based on the TECH Clean California1
incremental cost study data, estimated costs for the AC path, updated and expanded AC
path options, and a new cost-effectiveness scenario that considers upcoming proposed
zero-NOx emission regulations (SCAQMD, 2025) (California Air Resources Board, 2022)
(BAAD, 2025).
Local jurisdictions in California may consider adopting local energy ordinances to achieve
energy savings beyond what will be accomplished by enforcing building efficiency
requirements that apply statewide.
Local jurisdictions may also adopt ordinances that amend different parts of the California
Building Standards Code or may elect to amend other state or municipal codes. The
1 https://techcleanca.com/
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8 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
decision regarding which code to amend will determine the specific requirements that must
be followed for an ordinance to be legally enforceable. Although a cost-effectiveness study
is only required to amend Part 6 of the CA Building Code, it is important to understand the
economic impacts of any policy decision. This study documents the estimated costs,
benefits, energy impacts and greenhouse gas emission reductions that may result from
implementing an ordinance based on the results to help local leadership, residents, and
other stakeholders make informed policy decisions.
This report was developed in coordination with the California Statewide Investor-Owned
Utilities (IOUs) Codes and Standards Program, the California Energy Commission (CEC),
key consultants, and engaged cities—collectively known as the Statewide Reach Codes
Team. Model ordinance language and other resources are posted on the C&S Reach Codes
Program website at LocalEnergyCodes.com. Local jurisdictions that are considering
adopting an ordinance may contact the program for further technical support at
info@localenergycodes.com.
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9 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
2 Methodology and Assumptions
This study evaluates a potential reach code that encourages a heat pump or dual fuel
system that includes a heat pump combined with a furnace when an air conditioner is
replaced or installed new in existing single family homes. The ordinance structure and this
analysis is based on the voluntary requirements adopted in 2025 Title 24, Part 11 California
Green Building Standards Code (CALGreen), Section A4.204.1.1 for heat pump space
conditioning alterations in single family homes (California Energy Commission, 2025). The
proposed reach code also defines pathways for air conditioning equipment to be installed
combined with additional efficiency measures. The heat pump path requires the heat pump
as the primary heat source, with backup heating allowable either provided by electric
resistance or natural gas. In cases where the existing furnace remains, the heat pump is
installed alongside the existing furnace with integrated controls to allow for the furnace to
provide backup heating. In alignment with the 2025 Energy Code requirements the heat
pump must be sized to satisfy the heating load at the design heating temperature without
the use of backup heat.
All methodology and assumptions are consistent with prior statewide analysis (Statewide
Reach Codes Team, 2024) with the following exceptions:
1. Updated utility rates to January 2025
2. Equipment costs based on TECH data where available; the original report was
based on Statewide contractor survey costs
3. Cost estimates were obtained for the AC path
4. Expanded AC path options
5. Cost-effectiveness results for the scenario if gas furnaces are no longer available for
sale in California in 2030
2.1 Modeling
The Reach Codes Team performed energy simulations using the 2025 research version of
the Residential California Building Energy Code Compliance software (CBECC). The 2025
version of CBECC includes updated weather files, metrics, and the weather stations were
changed in Climate Zones 4 and 6 from San Jose to Paso Robles and Torrance to Los
Angeles International Airport, respectively. Note that at the time of this report, the Energy
Commission was working on integrating a new heat pump model into the CBECC-Res
software to better reflect the actual energy use of heat pumps. The updated model results in
lower heating energy use than is currently estimated. Once the revised software is released,
the reach codes team plans to update this analysis.
Three unique building vintages are included: pre-1978, 1978-1991, and 1992-2010. The
vintages were defined based on review of historic building code requirements and defining
periods with distinguishing features. The proposed measures were modeled to determine
the projected site energy (therm and kWh), source energy, GHG emissions, and long-term
systemwide cost (LSC) impacts. Annual utility costs were calculated using hourly data
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10 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
output from CBECC, and updated (as of 1/1/2025) electricity and natural gas tariffs for each
of the investor-owned utilities (IOUs) as appropriate for that climate zone.
Site energy results are similar between CBECC-Res 2022 and 2025. The 2025 compliance
metrics include assumptions that more appliances will be electric in the future. This is
predicted to result in higher natural gas retail rates as a result of gas utilities continuing to
maintain safe and reliable infrastructure amidst declining natural gas use.
Equivalent CO2 emission reductions were calculated based on outputs from the CBECC-
Res simulation software. Electricity emissions vary by region and by hour of the year.
CBECC-Res applies two distinct hourly profiles, one for Climate Zones 1 through 5 and 11
through 13 and another for Climate Zones 6 through 10 and 14 through 16. Natural gas
emissions do not vary hourly. To compare the mixed-fuel and all-electric cases side-by-side,
GHG emissions are presented as pounds of CO2-equivalent (CO2e) emissions.
The Statewide Reach Codes Team designed the approach and selected measures for
evaluation based on the 2019 existing building single family reach code analysis (Statewide
Reach Codes Team, 2021) and supporting analysis used in the 2025 Energy Code
development cycle as well as from outreach to architects, builders, and engineers.
2.2 Prototype Characteristics
The Energy Commission defines building prototypes which it uses to evaluate the cost-
effectiveness of proposed changes to Energy Code requirements. Average home size has
steadily increased over time, and the Energy Commission single family new construction
prototypes are larger than many existing single family homes across California. For this
analysis, a 1,665 square foot prototype was evaluated. Table 2 describes the basic
characteristics of the single family prototype. Additions are not evaluated in this analysis as
they are already addressed in Section 150.2 of the Energy Code. In the 2025 Energy Code
heat pumps are prescriptively required for space and water heating for additions (California
Energy Commission, 2023).
Table 2. Residential Prototype Characteristics
Climate Zone Specification
Existing Conditioned Floor Area 1,665 ft2
Num. of Stories 1
Num. of Bedrooms 3
Window-to-Floor Area Ratio 13%
Attached Garage 2-car garage
Three building vintages were evaluated to determine sensitivity of existing building
performance on cost-effectiveness of upgrades. For example, it is widely recognized that
adding attic insulation in an older home with no insulation is cost-effective, however, newer
homes will likely have existing attic insulation reducing the cost-effectiveness of an
incremental addition of insulation. The building characteristics for each vintage were
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11 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
determined based on either prescriptive requirements from the building code that were in
effect or standard construction practice during that time period. For example, homes built
under 2001 Title 24 are subject to prescriptive envelope code requirements very similar to
homes built under the 2005 code cycle, which was in effect until January 1, 2010.
Table 3 summarizes the assumptions for each of the three vintages. Additionally, the
analysis assumed the following features when modeling the prototype buildings.
• Efficiencies were defined by year of the most recent equipment replacement based
on standard equipment lifetimes.
• Individual space conditioning and water heating systems, one per single family
building.
• Split-system air conditioner with natural gas furnace.
• Gas cooktop, oven, and clothes dryer.
The methodology applied in the analyses begins with a design that matches the
specifications as described in Table 3 for each of the three vintages. Heat pump space
conditioning measures were modeled to determine the projected energy performance and
utility cost impacts relative to the baseline vintage.
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Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 12
Table 3. Efficiency Characteristics for Three Vintage Cases
Building Component Efficiency
Feature Pre-1978 Vintage 1978-1991 Vintage 1992-2010 Vintage
Envelope
Exterior Walls 2x4, 16-inch on center wood frame,
R-02
2x4 16 inch on center wood frame,
R-11
2x4 16 inch on center wood frame,
R-13
Foundation Type & Insulation Uninsulated slab (CZ 2-15)
Raised floor, R-0 (CZ 1 & 16)
Uninsulated slab (CZ 2-15)
Raised floor, R-0 (CZ 1 & 16)
Uninsulated slab (CZ 2-15)
Raised floor, R-19 (CZ 1 & 16)
Ceiling Insulation & Attic Type
Vented attic, R-5 @ ceiling level for CZ
6 & 7,
Vented attic, R-11 @ ceiling level
(all other CZs)
Vented attic, R-19 @ ceiling level Vented attic, R-30 @ ceiling level
Roofing Material & Color Asphalt shingles, dark
(0.10 reflectance, 0.85 emittance)
Asphalt shingles, dark
(0.10 reflectance, 0.85 emittance)
Asphalt shingles, dark
(0.10 reflectance, 0.85 emittance)
Radiant Barrier No No No
Window Type: U-factor/SHGC3 Metal, single pane: 1.16/0.76 Metal, dual pane: 0.79/0.70 Vinyl, dual pane Low-E: 0.55/0.40
House Infiltration at 50 Pascals 15 ACH50 10 ACH50 7 ACH50
HVAC Equipment
Heating Efficiency 78 AFUE (assumes 2 replacements) 78 AFUE (assumes 1 replacement) 78 AFUE
Cooling Efficiency 10 SEER (assumes 2 replacements) 10 SEER (assumes 1 replacement) 13 SEER, 11 EER
Duct Location & Details Attic, R-2.1, 30% leakage at 25 Pa Attic, R-2.1, 25% leakage at 25 Pa Attic, R-4.2, 15% leakage at 25 Pa
Whole Building Mechanical
Ventilation None None None
Water Heating Equipment
Water Heater Efficiency 0.575 Energy Factor (assumes 2
replacements)
0.575 Energy Factor (assumes 1
replacement) 0.575 Energy Factor
Water Heater Type 40-gallon gas storage 40-gallon gas storage 40-gallon gas storage
Pipe Insulation None None None
Hot Water Fixtures Standard, non-low flow Standard, non-low flow Standard, non-low flow
2 Pre-1978 wall modeled with R-5 cavity insulation to better align wall system performance with monitored field data and not overestimate energy use.
3 Window type selections were made based on conversations with window industry expert, Ken Nittler. If a technology was entering the market during the time period (e.g., Low-E during 1992-2010 or dual-pane during 1978-1991) that technology was included in the analysis. This provides a conservative assumption for overall building performance and additional measures may be cost-effective for buildings with lower performing windows, for example buildings with metal single
pane windows in the 1978-1991 vintage
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13 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
2.3 Cost-Effectiveness Approach
2.3.1 Benefits
This analysis used two different metrics to assess the cost-effectiveness of the proposed
upgrades. Both methodologies require estimating and quantifying the incremental costs and
energy savings associated with each energy efficiency measure. The main difference
between the methodologies is the way they value energy impacts:
• On-Bill: Customer-based lifecycle cost approach that values energy based upon
estimated site energy usage and customer On-Bill savings using electricity and
natural gas utility rate schedules over a 30-year duration, accounting for a three
percent discount rate and energy cost inflation per Appendix 6.3.7.
• Long-term Systemwide Cost (LSC): Formerly known as Time Dependent Valuation
(TDV) energy cost savings, LSC reflects the Energy Commission’s current lifecycle
cost (LCC) methodology, which is intended to capture the total value or cost of
energy use over 30 years. This method accounts for the hourly cost of marginal
generation, transmission and distribution, fuel, capacity, losses, and cap-and-trade-
based CO2 emissions (California Energy Commission, 2023). This is the
methodology used by the Energy Commission in evaluating cost-effectiveness for
measures in the 2025 Energy Code.
Energy simulations were completed using the 2025 research version of the Residential
California Building Energy Code Compliance software (CBECC).
2.3.2 Costs
The Reach Codes Team assessed the incremental costs and savings of the packages over
the lifecycle of 30-years. Incremental costs represent the equipment, installation,
replacement, and maintenance costs of the proposed measure relative to the 2025 Energy
Code minimum requirements or standard industry practices.
In February 2024, the TECH Clean California statewide program completed an incremental
cost study from cost data collected from 64 contractor participants (Opinion Dynamics,
2024). This report directly uses the TECH costs for all the scenarios for which there was
TECH cost data available. These costs were supplemented with measure costs the Reach
Codes Team obtained from a contractor survey conducted in the summer of 2023. Additional
detail on the contractor cost survey is available in the prior existing building statewide study
(Statewide Reach Codes Team, 2024). The following summarizes key assumptions in this
costing approach.
• Average statewide costs from the TECH Study were used, no regional specific costs
were applied.
• Costs for 3-ton and 4-ton units were scaled for smaller and larger systems based on
linear interpolation between the 3-ton and 4-ton costs.
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14 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
• The TECH study provided cost for a minimum efficiency 60,000 Btu/h gas furnace.
However, beginning in 2028, newly installed residential gas furnaces must comply
with updated federal efficiency standards requiring a minimum of 95% AFUE4.
Because the TECH study did not include cost estimates for a 95% AFUE condensing
furnace, an adjustment was made using data from the statewide contractor cost
survey. For systems requiring larger furnace capacities, cost estimates were derived
as follows:
o 80,000 Btu/h furnaces (serving systems sized 3 tons): The cost difference
between the minimum efficiency and 95% AFUE versions of the 80,000 Btu/h
furnace and the cost difference between the minimum efficiency 80,000 Btu/h
furnace and the minimum efficiency 60,000 Btu/h furnace, as reported in the
contractor survey, was added to the TECH cost for the 60,000 Btu/h unit.
o 100,000 Btu/h furnaces (serving systems 4 tons and larger): The same
method was applied using the corresponding cost differential for 100,000
Btu/h units.
• At time of replacement for the heat pump, based on heating loads and contractor
feedback it is assumed an electric resistance backup coil would be installed with the
air handler for Climate Zones 1 and 16. The CBECC-Res software applies back up
electric resistance heating for all climate zones whenever it is assumed that the heat
pump cannot meet the heating load based on the performance of currently available
products (Heinemeier, 2025).The TECH costs did not include this option. The $819
incremental cost from the statewide study was added in this case.
• At the time of replacement for a furnace when it fails, the statewide study assumed a
fan motor replacement. The TECH costs did not include this option. A $1,200
incremental cost was added to the TECH cost.
• At time of replacement for high efficiency heat pump, the sum of the TECH cost for
standard efficiency heat pump and the incremental cost difference from the
statewide study for high efficiency and standard efficiency heat pump was applied.
Costs were applied based on the system capacity from heating and cooling load
calculations in CBECC-Res as presented in Table 4. Air conditioner nominal capacity was
calculated as the CBECC-Res cooling load, rounded up to the nearest half ton. Heat pump
nominal capacity was calculated as the maximum of either the CBECC-Res heating or
cooling load, rounded up to the nearest half ton. In both cases a minimum capacity of 1.5-
ton was applied as this represents the typical smallest available split system heat pump
equipment. Load calculations revealed that Climate Zones 2 through 15 were cooling-
dominated, whereas Climate Zones 1 and 16 were heating-dominated. In these heating-
4 https://www.energy.gov/articles/doe-finalizes-energy-efficiency-standards-residential-furnaces-save-
americans-15-billion#:~:text=These%20furnace%20efficiency%20standards%20were,heat%20for%20the%20living
%20space.
2025/06/09
15 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
dominated zones, the heat pump was upsized compared to an air conditioner designed
solely for cooling to ensure adequate heating performance.
Table 4. System Sizing by Climate Zone
Climate Zone Air Conditioner Capacity (tons) Heat PumpCapacity (tons)
1 1.5 3.0
2 3.5 3.5
3 2.5 2.5
4 3.5 3.5
5 3.0 3.0
6 3.0 3.0
7 3.0 3.0
8 4.0 4.0
9 4.0 4.0
10 4.0 4.0
11 4.5 4.5
12 4.0 4.0
13 4.5 4.5
14 4.0 4.0
15 5.0 5.0
16 3.5 4.0
2.3.3 Metrics
Cost-effectiveness is presented using net present value (NPV).
• NPV: The Reach Codes Team uses net savings (NPV benefits minus NPV costs) as
the cost-effectiveness metric. If the net savings of a measure or package is positive,
it is considered cost effective. Negative net savings represent net costs to the consumer. A measure that has negative energy cost benefits (energy cost increase)
can still be cost effective if the costs to implement the measure are even more
negative (i.e., construction and maintenance cost savings).
Improving the energy performance of a building often requires an initial investment. In most cases the benefit is represented by annual On-Bill utility or LSC savings, and the cost by
incremental first cost and replacement costs. However, some packages result in initial
construction cost savings (negative incremental cost), and either energy cost savings (positive benefits), or increased energy costs (negative benefits). In cases where both
construction costs and energy-related savings are negative, the construction cost savings
are treated as the benefit while the increased energy costs are the cost. In cases where a
measure or package is cost-effective immediately (i.e., upfront construction cost savings
and lifetime energy cost savings).
2025/06/09
16 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
2.3.4 Utility Rates
In coordination with the CA IOU rates team (comprised of representatives from Pacific Gas
and Electric (PG&E), Southern California Edison (SCE) and San Diego Gas and Electric
(SDG&E)) and two Publicly-Owned-Utilities (POUs) (Sacramento Municipal Utility District
(SMUD) and City of Palo Alto Utilities (CPAU)), the Reach Codes Team determined
appropriate utility rates for each climate zone to calculate utility costs and determine On-Bill
cost-effectiveness for the proposed measures and packages. The utility tariffs, summarized
in Table 5 and Table 6 with details in Section 6.2.26.2.2, were determined based on the
appropriate rate for each. Utility rates were applied to each climate zone based on the
predominant IOU serving the population of each zone, with a few climate zones evaluated
multiple times under different utility scenarios. Climate Zones 10 and 14 were evaluated with
both SCE for electricity and Southern California Gas Company (SoCalGas) for gas and
SDG&E tariffs for both electricity and gas since each utility has customers within these
climate zones. Climate Zone 5 is evaluated under both PG&E and SoCalGas natural gas
rates. Two POU or municipal utility rates were also evaluated: SMUD in Climate Zone 12
and CPAU in Climate Zone 4.
First-year utility costs were calculated using hourly electricity and natural gas output from
CBECC-Res and applying the utility tariffs summarized in Table 5 and Table 6. Homes with a
heat pump in IOU territory are eligible for either the electrification or the standard tariff. Utility
costs were calculated under both tariffs with results presented using the one that yielded the
lower annual utility cost. The electrification tariff resulted in better utility costs savings when
there was high kWh usage, typically in older, less efficient homes. Conversely, newer homes
which are more efficient, tend to benefit more under the standard tariff. However, in SCE’s
milder climate zones, older homes benefit more under the standard tariff. Annual costs were
also estimated for IOU customers eligible for the CARE tariff discounts on both electricity
and natural gas bills.
Table 5. Investor-Owned Utility Tariffs Used Based on Climate Zone
Climate Zones Electric / Gas Utility
ElectricityTariff: Standard Rate
ElectricityTariff: Electrification Rate
Natural Gas Tariff
1-5,11-13,16 PG&E / PG&E E-TOU-C E-ELEC G1
5 PG&E / SoCalGas E-TOU-C E-ELEC GR
6, 8-10, 14, 15 SCE / SoCalGas TOU-D-4-9 TOU-D-PRIME GR
7, 10, 14 SDG&E / SDG&E TOU-DR-1 EV-TOU-5 GR
2025/06/09
17 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
Table 6. Publicly Owned Utility Tariffs Used Based on Climate Zone
Climate Zones
Electric / Gas Utility
Electricity Tariff: StandardRate
ElectricityTariff: Electrification Rate
Natural Gas Tariff
4 CPAU / CPAU E-1 G1
12 SMUD / PG&E R-TOD G1
Utility rates are assumed to escalate over time. Because it is very difficult to predict how
rates will change, two escalation scenarios are presented in this study to represent a range
of outcomes. See Appendix 6.3.7 Fuel Escalation Assumptions for details.
1) Modest Gas Escalation: This scenario is based on assumptions from the CPUC
2021 En Banc hearings on utility costs through 2030 (California Public Utilities Commission, 2021a). Escalation rates throughout the remainder of the 30-year
evaluation period are based on the escalation rate assumptions within the 2022
Energy Code TDV factors developed by the Energy Commission (California Energy
Commission. 2021b). 2) High Gas Escalation: This scenario is based on escalation rates developed by the
Energy Commission and used within the 2025 Energy Code LSC factors (LSC
replaces TDV in the 2025 Energy Code) which assumed steep increases in gas rates in the latter half of the analysis period.
Electricity tariff structures will evolve over time. Most recently, the CPUC approved an
income-graduated fixed charge intended to benefit low-income customers and support
electrification measures.5 The IOUs are currently developing tariffs that meet the direction
given by the CPUC in this proceeding. These tariffs were not available at the time of this
study, but this analysis may be re-evaluated later in 2025 once the rates are finalized.
5 https://www.cpuc.ca.gov/industries-and-topics/electrical-energy/electric-costs/demand-response-
dr/demand-flexibility-rulemaking
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18 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
2.4 Measure Details and Cost
This section describes the details of the measures and documents incremental costs. All
measure costs were obtained from the TECH cost survey and contractor survey unless
otherwise noted. These surveys reflect the cost to the customer and include equipment,
labor, permit fees, and required HERS testing.
The following heat pump space heater (HPSH) measures were evaluated as described
below. All included HERS verified refrigerant charge, 10% duct sealing, and 300 CFM/ton
airflow, aligned with the proposed code requirements for the 2025 Title 24 code.
1) Dual Fuel Heat Pump (DFHP Existing Furnace): Replace existing ducted AC with
an electric heat pump and install controls to operate the heat pump as the primary
space conditioning source and to use the existing gas furnace (78 AFUE) for backup
heat when heating demands cannot be met by the heat pump. In this report, dual fuel heat pumps were modeled to disable furnace operation above an outdoor
temperature of 35°F in compliance with Energy Code Section 150.0(h)7, which
requires this lockout for any heat pump with supplemental heating. A minimum
federal efficiency (14.3 SEER2, 11.7 EER2, 7.5 HSPF2) heat pump was evaluated.
Savings are compared to a new AC (14.3 SEER2, 11.7 EER2) alongside the existing
furnace (78 AFUE). A new evaporator coil is assumed to be installed with the AC
system. 2) HPSH: Replace existing ducted AC and natural gas furnace with an electric heat
pump and air handler. Minimum federal efficiency (14.3 SEER2, 11.7 EER2, 7.5
HSPF2) heat pumps were evaluated. Savings are compared to a new ducted natural
gas furnace and AC (14.3 SEER2, 11.7 EER2, 80 AFUE). 3) High Efficiency HPSH: Replace existing ducted AC and natural gas furnace with an
electric heat pump and air handler. Higher efficiency (17 SEER2, 12.48 EER2, 9.5
HSPF2) heat pumps were evaluated. Savings are compared to a new ducted natural gas furnace and AC (14.3 SEER2, 11.7 EER2, 80 AFUE).
Over the 30-year analysis period, certain changes are assumed when the equipment is
replaced that impact both lifetime costs and energy use. Table 7 and Table 8 present the
lifetime scenario for the DFHP Existing Furnace and HPSH measures, respectively. The
analysis assumed a 20-year effective useful lifetime (EUL) for a furnace, a 15-year EUL for
an air conditioner and a 15-year EUL for a heat pump. Lifetimes are based on the Database
for Energy Efficient Resources (DEER) (California Public Utilities Commission, 2021b). The
existing furnace is assumed to be halfway through its EUL at the beginning of the analysis
period. After 10 years when the furnace reaches the end of its life and needs to be replaced,
it will be subject to new federal efficiency standards for residential gas furnaces that go into
effect in 2028 requiring 95 AFUE6. Five years later the air conditioner reaches the end of its
life and is replaced with a new air conditioner.
6 https://www.energy.gov/articles/doe-finalizes-energy-efficiency-standards-residential-furnaces-save-
americans-15-billion#:~:text=These%20furnace%20efficiency%20standards%20were,heat%20for%20the%20livin
g%20space.
2025/06/09
19 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
For the DFHP upgrade case, after 10 years when the furnace fails it’s expected that the
furnace is abandoned in place since the heat pump serves primary heating and was sized to
provide the full design heating load. In this case it is assumed that the fan motor is replaced
with a new aftermarket unit and operates another five years until the heat pump fails and is
replaced with a new heat pump and air handler. Table 7 through Table 8 present the lifecycle
incremental cost breakdown for a 4-ton system. The heat pump is sized for each climate
zone based on the heating and cooling load as shown in Table 4, and the 4-ton system was
selected as an example to show the lifecycle cost breakdown.
Table 7. Lifecycle Incremental Cost Breakdown for a 4-Ton DFHP Existing Furnace
Calendar Year
Baseline AC
Replacement
Schedule
Baseline Future Cost
Baseline Present Value Cost
Heat Pump
Heat PumpFuture Cost
Heat PumpPresent Value Cost
2026 AC fails, install new AC, keep existing furnace
$10,431 $10,431 AC fails, install new HP, keep existing furnace
$12,347 $12,347
2036 Furnace fails, install new 95AFUE furnace
$7,476 $5,563 Furnace fails, replace fan motor $1,200 $893
2041 AC fails, install new AC $10,431 $6,695 HP fails, install new HP and air handler $14,529 $9,326
Total $22,689 $22,566
Incremental Cost -$123
Table 8. Lifecycle Incremental Cost Breakdown for 4-Ton HPSH
Calendar Year
Baseline AC
ReplacementSchedule
Baseline Future Cost
Baseline Present Value Cost
Heat Pump Heat PumpFuture Cost
Heat PumpPresent Value Cost
2026 AC fails, install new AC & furnace
$13,808 $13,808 AC fails, install new HP & AHU
$14,529 $14,529
2041 AC fails, install new AC $10,431 $6,695 HP fails, install new HP & AHU
$13,529 $8,684
2046 Furnace fails, install new 95AFUE furnace
$7,476 $4,139
---
2056 Remaining useful life for furnace --$1,540 ---
Total $23,103 $23,213
Incremental Cost $110
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20 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
Table 9 presents estimated first and lifetime costs for the baseline and heat pump scenarios for 4-ton equipment. Costs include all material and installation labor including providing new
240 V electrical service to the air handler location for all new air handler installations and decommissioning of the furnace for the cases where the furnace is removed. DFHP costs incorporate controls installation and commissioning to ensure the heat pump and the
furnace communicate properly and don’t operate at the same time. Future replacement costs do not include any initial costs associated with 240V electrical service or furnace decommissioning.
Table 9. HVAC Measure Cost Assumptions – 4-Ton Electric Replacements
Measure Case AC + Evaporator Coil
Gas Furnace /AC
DFHP ExistingFurnace HPSH HighEfficiencyHPSH
Base Case --AC + Evaporator Coil
Gas Furnace /AC
Gas Furnace /AC
First Cost $10,431 $13,808 $12,347 $14,529 $17,506
Replacement Cost (Future Value) $17,907 $17,907 $15,729 $13,529 $16,506
Replacement Cost (Present Value) $12,258 $11,639 $10,219 $8,684 $10,594
Remaining Value at Year 30 $0 -$1,540 $0 $0 $0
Total Lifecycle Cost $22,689 $23,103 $22,566 $23,213 $28,100
Incremental Cost ---$123 $110 $4,997
2.4.1 Lifecycle Cost Assuming Zero-NOx Standards for Space Heating After 2030
The California Air Resource Board proposed a strategy for reducing emissions in their 2022
Scoping Plan for Achieving Carbon Neutrality that includes a zero-emission standard for
space and water heaters sold in California that would go into effect in 2030 (California Air
Resources Board, 2022).
The South Coast Air Quality Management District (SCAQMD) proposed Rule 1111 for the
Reduction of NOx Emissions from Natural Gas-Fired Furnaces. This rule applies to furnaces
less than 175,000 Btu/hr and sets compliance goals for manufacturers with the proposed
dates in Table 10. The sale of gas furnaces above the compliance target will incur a
mitigation fee (SCAQMD, 2025).
Table 10. SCAQMD Rule 1111 Proposed Manufacturer Compliance Targets
Target Dates 2027-2028 2029-2032 2033-2035 2036 and after
NOx Emitting Units (e.g. gas) 70% 50% 25% 10%
Zero-Emission Units 30% 50% 75% 90%
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21 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
The Bay Area Air Quality Management District (BAAD) adopted Rule 9-4 that similarly
requires zero NOx standards for space heating systems sold in the Bay Area.
Implementation for residential furnaces will begin January 2029 (BAAD, 2025).
The BAAD Rule 9-4 has been adopted, but both the California Air Resources Board and
SCAQMD Rule 1111 are proposed rules that have not yet been adopted, but given the
implications these rulings would have on the 30-year cost-effectiveness if gas furnaces were
very limited or no longer available in 2030, a sensitivity analysis for this scenario is included
in this study for the DFHP Existing Furnace scenario. The other heat pump measures would
also be impacted by this ruling; however, for simplicity the team selected one measure to
give a sense of the impact on the results. The following costs reflect the scenario where gas
furnaces are not available in 2030. This 30-year lifecycle analysis assumes that in 10 years
when the furnace reaches the end of its useful life and needs to be replaced, it will be
subjected to the SCAQMD Rule 1111 or California Air Resources Board proposal and will be
replaced with a heat pump.
Table 11. Lifecycle Incremental Cost Breakdown for 4-Ton System with no Gas Furnaces after 2030
Calendar Year
Baseline AC
ReplacementSchedule
Baseline Future Cost
Baseline Present Value Cost
Heat Pump
Heat PumpFuture Cost
Heat PumpPresent Value Cost
2026 AC fails, install new AC, keep existing
furnace $10,431 $10,431 AC fails, install new HP, keep existing
furnace $12,347 $12,347
2036 Furnace fails, install new HP $14,529 $10,811 Furnace fails, replace fan motor $1,200 $893
2041 ---HP fails, install new HP and air handler $14,529 $9,326
2051 HP fails, install new HP $13,529 $6,462 ---
2056 Remaining useful life for HP --$4,459 ---
Total $23,244 $22,566
Incremental Cost -$679
2025/06/09
22 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
3 Results
The primary objective of the evaluation is to identify cost-effective HPSH upgrade measures
for existing single family buildings, to support the design of local ordinances encouraging
installation of a heat pump when replacing an air conditioner. While this section focuses
primarily on the results of the cost-effectiveness analysis, it is important to highlight that the
associated greenhouse gas (GHG) emissions savings are significant – averaging a 25%
annual reduction across the climate zones and vintages. A full dataset of all results,
including site energy, source energy, LSC and GHG emissions, can be downloaded at
https://localenergycodes.com/content/resources. Results alongside policy options can also
be explored using the Cost-effectiveness Explorer at https://explorer.localenergycodes.com/.
3.1 Cost-Effectiveness Results
Table 12 through Table 14 present results across the 16 climate zones for the 1992-2010
vintage using standard tariffs and Table 15 through Table 17 present results across the 16
climate zones and three vintages using CARE tariffs. Results show the incremental cost and
utility bill savings for the first year along with cost effectiveness results for LSC and On-Bill
under both the modest and high gas escalation scenarios. Results for additional vintages
using standard tariffs are in Appendix 6.2 Cost-Effectiveness Results.
2025/06/09
23 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
3.1.1 Cost Effectiveness Results Using Standard Tariffs
Table 12. [1992-2010] DFHP Existing Furnace
Climate Zone Electric/ Gas Utility
First Incremental Cost
First-yearUtilitySavings
Lifecycle NPV Savings
2025
LSC NPV
On-Bill NPV Modest Gas Escalation
On-Bill NPV High GasEscalation
CZ01 PGE $2,405 $60 $10,843 $5,471 $21,616
CZ02 PGE $1,670 ($86) $8,387 $2,238 $12,692
CZ03 PGE $1,178 $15 $8,383 $4,891 $13,958
CZ04 PGE $1,670 ($68) $7,322 $1,880 $10,049
CZ04 CPAU $1,670 ($9) $7,322 $2,132 $7,104
CZ05 PGE $1,424 ($12) $6,848 $3,425 $11,150
CZ05 PGE/SCG $1,424 ($195) $6,848 ($1,864) $2,099
CZ06 SCE/SCG $1,424 ($34) $2,647 $675 $1,468
CZ07 SDGE $1,424 ($36) $2,691 $599 $1,734
CZ08 SCE/SCG $1,916 ($65) $1,879 ($811) $162
CZ09 SCE/SCG $1,916 ($90) $2,600 ($1,186) $288
CZ10 SCE/SCG $1,916 ($79) $2,295 ($982) $394
CZ10 SDGE $1,916 $54 $2,295 $2,201 $4,708
CZ11 PGE $2,162 $68 $7,597 $4,639 $14,675
CZ12 PGE $1,916 $44 $8,317 $4,702 $15,222
CZ12 SMUD/PGE $1,916 $353 $8,317 $11,622 $22,364
CZ13 PGE $2,162 $76 $5,244 $3,897 $11,138
CZ14 SCE/SCG $1,916 ($179) $4,654 ($2,364) $1,340
CZ14 SDGE $1,916 ($22) $4,654 $1,282 $7,058
CZ15 SCE/SCG $2,408 ($133) ($271) ($3,438) ($3,209)
CZ16 PGE $2,243 ($66) $8,842 $1,260 $11,982
2025/06/09
24 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
Table 13. [1992-2010] Standard Efficiency HPSH
Climate Zone Electric/ Gas Utility
First Incremental Cost
First-yearUtilitySavings
Lifecycle NPV Savings
2025
LSC NPV
On-Bill NPV Modest Gas Escalation
On-Bill NPV High GasEscalation
CZ01 PGE $3,067 ($145) $10,949 ($34) $17,899
CZ02 PGE $652 ($229) $9,362 ($702) $11,825
CZ03 PGE $514 ($62) $8,244 $2,373 $11,665
CZ04 PGE $652 ($205) $8,680 ($572) $10,753
CZ04 CPAU $652 ($85) $8,680 $556 $7,194
CZ05 PGE $583 ($113) $6,957 $752 $9,206
CZ05 PGE/SCG $583 ($316) $6,957 ($5,101) ($811)
CZ06 SCE/SCG $583 ($37) $2,134 ($63) $716
CZ07 SDGE $583 ($39) $2,156 ($149) $981
CZ08 SCE/SCG $721 ($79) $1,812 ($1,356) ($371)
CZ09 SCE/SCG $721 ($118) $2,589 ($2,038) ($524)
CZ10 SCE/SCG $721 ($103) $2,311 ($1,723) ($259)
CZ10 SDGE $721 $34 $2,311 $1,533 $4,218
CZ11 PGE $790 ($35) $8,817 $2,833 $14,504
CZ12 PGE $721 ($94) $9,199 $1,812 $13,563
CZ12 SMUD/PGE $721 $363 $9,199 $12,027 $24,107
CZ13 PGE $790 $6 $5,948 $2,558 $10,687
CZ14 SCE/SCG $721 ($412) $6,635 ($6,964) ($1,073)
CZ14 SDGE $721 ($107) $6,635 $166 $10,249
CZ15 SCE/SCG $859 ($139) ($112) ($3,434) ($3,186)
CZ16 PGE $2,095 ($385) $13,600 ($2,842) $19,424
2025/06/09
25 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
Table 14. [1992-2010] High Efficiency HPSH
Climate Zone Electric/ Gas Utility
First Incremental Cost
First-yearUtilitySavings
Lifecycle NPV Savings
2025
LSC NPV
On-Bill NPV Modest Gas Escalation
On-Bill NPV High GasEscalation
CZ01 PGE $5,998 $56 $9,783 ($350) $17,727
CZ02 PGE $3,606 ($94) $7,527 ($2,544) $10,080
CZ03 PGE $3,422 $59 $5,701 $312 $9,692
CZ04 PGE $3,606 ($61) $6,961 ($2,193) $9,235
CZ04 CPAU $3,606 $0 $6,961 ($2,389) $4,310
CZ05 PGE $3,514 $4 $4,176 ($1,450) $7,088
CZ05 PGE/SCG $3,514 ($199) $4,176 ($7,303) ($2,929)
CZ06 SCE/SCG $3,514 ($14) ($2,162) ($4,367) ($3,567)
CZ07 SDGE $3,514 ($12) ($2,090) ($4,312) ($3,191)
CZ08 SCE/SCG $3,698 $13 ($1,660) ($4,217) ($3,149)
CZ09 SCE/SCG $3,698 ($26) ($750) ($4,883) ($3,284)
CZ10 SCE/SCG $3,698 ($4) ($844) ($4,418) ($2,864)
CZ10 SDGE $3,698 $132 ($844) ($1,068) $1,587
CZ11 PGE $3,789 $186 $7,738 $2,845 $14,675
CZ12 PGE $3,698 $88 $7,575 $996 $12,879
CZ12 SMUD/PGE $3,698 $422 $7,575 $8,459 $20,580
CZ13 PGE $3,789 $208 $4,419 $2,165 $10,439
CZ14 SCE/SCG $3,698 ($219) $5,760 ($7,575) ($1,506)
CZ14 SDGE $3,698 $77 $5,760 ($424) $9,604
CZ15 SCE/SCG $3,881 $50 ($2,144) ($4,209) ($3,786)
CZ16 PGE $5,071 ($97) $14,557 ($1,291) $21,181
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26 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
3.1.2 Cost Effectiveness Results Using CARE Tariffs
Table 15. [1992-2010] DFHP Existing Furnace CARE
Climate Zone Electric/ Gas Utility
First Incremental Cost
First-yearUtilitySavings
Lifecycle NPV Savings
2025
LSC NPV
On-Bill NPV Modest Gas Escalation
On-Bill NPV High GasEscalation
CZ01 PGE $2,405 $153 $10,843 $6,436 $19,266
CZ02 PGE $1,670 $18 $8,387 $3,842 $12,159
CZ03 PGE $1,178 $73 $8,383 $5,574 $12,777
CZ04 PGE $1,670 $14 $7,322 $3,143 $9,641
CZ04 CPAU $1,670 $0 $7,322 $711 $711
CZ05 PGE $1,424 $47 $6,848 $4,198 $10,337
CZ05 PGE/SCG $1,424 ($98) $6,848 $23 $3,191
CZ06 SCE/SCG $1,424 ($18) $2,647 $967 $1,600
CZ07 SDGE $1,424 ($16) $2,691 $1,000 $1,887
CZ08 SCE/SCG $1,916 ($38) $1,879 ($285) $495
CZ09 SCE/SCG $1,916 ($52) $2,600 ($450) $731
CZ10 SCE/SCG $1,916 ($45) $2,295 ($331) $771
CZ10 SDGE $1,916 $51 $2,295 $1,998 $3,963
CZ11 PGE $2,162 $115 $7,597 $4,993 $12,965
CZ12 PGE $1,916 $103 $8,317 $5,287 $13,643
CZ12 SMUD/PGE $1,916 $418 $8,317 $12,339 $20,922
CZ13 PGE $2,162 $100 $5,244 $3,939 $9,686
CZ14 SCE/SCG $1,916 ($98) $4,654 ($849) $2,119
CZ14 SDGE $1,916 $23 $4,654 $2,007 $6,528
CZ15 SCE/SCG $2,408 ($88) ($271) ($2,456) ($2,260)
CZ16 PGE $2,243 $33 $8,842 $2,737 $11,267
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27 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
Table 16. [1992-2010] Standard Efficiency HPSH CARE
Climate Zone Electric/ Gas Utility
First Incremental Cost
First-yearUtilitySavings
Lifecycle NPV Savings
2025
LSC NPV
On-Bill NPV Modest Gas Escalation
On-Bill NPV High GasEscalation
CZ01 PGE $3,067 $33 $10,949 $2,703 $16,973
CZ02 PGE $652 ($59) $9,362 $2,211 $12,188
CZ03 PGE $514 $25 $8,244 $3,685 $11,074
CZ04 PGE $652 ($53) $8,680 $2,048 $11,067
CZ04 CPAU $652 $0 $8,680 $255 $255
CZ05 PGE $583 ($13) $6,957 $2,389 $9,117
CZ05 PGE/SCG $583 ($173) $6,957 ($2,232) $1,208
CZ06 SCE/SCG $583 ($20) $2,134 $249 $872
CZ07 SDGE $583 ($18) $2,156 $279 $1,161
CZ08 SCE/SCG $721 ($47) $1,812 ($728) $62
CZ09 SCE/SCG $721 ($70) $2,589 ($1,094) $122
CZ10 SCE/SCG $721 ($61) $2,311 ($892) $281
CZ10 SDGE $721 $39 $2,311 $1,509 $3,612
CZ11 PGE $790 $60 $8,817 $4,141 $13,421
CZ12 PGE $721 $22 $9,199 $3,592 $12,940
CZ12 SMUD/PGE $721 $471 $9,199 $13,622 $23,292
CZ13 PGE $790 $61 $5,948 $3,234 $9,693
CZ14 SCE/SCG $721 ($241) $6,635 ($3,632) $1,098
CZ14 SDGE $721 ($5) $6,635 $1,996 $9,885
CZ15 SCE/SCG $859 ($91) ($112) ($2,414) ($2,201)
CZ16 PGE $2,095 ($92) $13,600 $2,163 $19,892
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28 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
Table 17. [1992-2010] High Efficiency HPSH CARE
Climate Zone Electric/ Gas Utility
First Incremental Cost
First-yearUtilitySavings
Lifecycle NPV Savings
2025
LSC NPV
On-Bill NPV Modest Gas Escalation
On-Bill NPV High GasEscalation
CZ01 PGE $5,998 $164 $9,783 $813 $15,177
CZ02 PGE $3,606 $28 $7,527 ($683) $9,357
CZ03 PGE $3,422 $104 $5,701 $674 $8,120
CZ04 PGE $3,606 $41 $6,961 ($703) $8,383
CZ04 CPAU $3,606 $0 $6,961 ($4,595) ($4,595)
CZ05 PGE $3,514 $62 $4,176 ($727) $6,056
CZ05 PGE/SCG $3,514 ($98) $4,176 ($5,348) ($1,853)
CZ06 SCE/SCG $3,514 ($5) ($2,162) ($4,219) ($3,583)
CZ07 SDGE $3,514 ($0) ($2,090) ($4,112) ($3,235)
CZ08 SCE/SCG $3,698 $15 ($1,660) ($4,248) ($3,401)
CZ09 SCE/SCG $3,698 ($8) ($750) ($4,603) ($3,330)
CZ10 SCE/SCG $3,698 $6 ($844) ($4,300) ($3,065)
CZ10 SDGE $3,698 $103 ($844) ($1,892) $191
CZ11 PGE $3,789 $203 $7,738 $2,425 $11,808
CZ12 PGE $3,698 $141 $7,575 $1,351 $10,784
CZ12 SMUD/PGE $3,698 $471 $7,575 $8,735 $18,405
CZ13 PGE $3,789 $192 $4,419 $1,255 $7,809
CZ14 SCE/SCG $3,698 ($111) $5,760 ($5,632) ($783)
CZ14 SDGE $3,698 $115 $5,760 ($98) $7,755
CZ15 SCE/SCG $3,881 $36 ($2,144) ($4,549) ($4,220)
CZ16 PGE $5,071 $95 $14,557 $1,460 $19,324
3.2 Zero-NOx Scenario Results
This section presents cost-effectiveness results for the DFHP Existing Furnace under the
scenario where proposed air quality district zero-NOx rules go into effect over the next 10
years. In the base case, at time of replacement of the gas furnace at year 10 a heat pump is
installed. The energy profile between the base case and the heat pump upgrade case are
subsequently identical for the remaining 20 years of the 30-year analysis period. As a result,
energy and cost savings only persist for the first 10 years.
Table 18 shows the On-Bill NPV cost-effectiveness results and Table 19 the LSC cost-
effectiveness results for all three vintages. 2025 LSC savings were calculated using
individual year multipliers for the first 10 years, 2026 through 2035.
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29 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
Table 18. DFHP Existing Furnace On-Bill NPV (Zero-NOx Rule)
Climate Zone Electric/Gas Utility
On-Bill NPV
Pre-1978 1978-1991 1992-2010
CZ01 PGE $5,473 $4,136 $2,349
CZ02 PGE $1,785 $1,031 $1,101
CZ03 PGE $2,863 $2,097 $2,052
CZ04 PGE $2,133 $1,162 $1,019
CZ04 CPAU $2,340 $1,599 $1,213
CZ05 PGE $1,918 $1,486 $1,576
CZ05 PGE/SCG ($1,308) ($834) ($491)
CZ06 SCE/SCG $401 $605 $635
CZ07 SDGE $1,473 $999 $641
CZ08 SCE/SCG ($125) $99 $195
CZ09 SCE/SCG ($563) ($183) $22
CZ10 SCE/SCG ($259) $53 $110
CZ10 SDGE $2,985 $2,261 $1,430
CZ11 PGE $3,287 $2,866 $2,279
CZ12 PGE $2,935 $2,578 $2,202
CZ12 SMUD/PGE $7,877 $5,978 $5,040
CZ13 PGE $2,927 $2,556 $2,053
CZ14 SCE/SCG ($864) ($943) ($543)
CZ14 SDGE $2,204 $1,655 $1,064
CZ15 SCE/SCG $1,338 $396 ($688)
CZ16 PGE $1,192 $1,071 $1,096
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30 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
Table 19. DFHP Existing Furnace LSC Savings (Zero-NOx Rule)
Climate Zone Electric/Gas Utility
LSC NPV
Pre-1978 1978-1991 1992-2010
CZ01 PGE $3,019 $2,510 $1,558
CZ02 PGE $1,256 $1,025 $1,006
CZ03 PGE $1,460 $1,120 $1,036
CZ04 PGE $1,242 $949 $887
CZ04 CPAU $1,242 $949 $887
CZ05 PGE $1,127 $816 $820
CZ05 PGE/SCG $1,127 $816 $820
CZ06 SCE/SCG $545 $318 $251
CZ07 SDGE $639 $403 $314
CZ08 SCE/SCG $428 $279 $244
CZ09 SCE/SCG $608 $424 $372
CZ10 SCE/SCG $469 $320 $293
CZ10 SDGE $469 $320 $293
CZ11 PGE $1,871 $1,475 $1,263
CZ12 PGE $1,924 $1,539 $1,356
CZ12 SMUD/PGE $1,375 $1,090 $939
CZ13 PGE ($206) ($186) $50
CZ14 SCE/SCG ($206) ($186) $50
CZ14 SDGE $127 $60 $38
CZ15 SCE/SCG ($185) ($12) $77
CZ16 PGE $3,019 $2,510 $1,558
3.3 AC Pathways for Heat Pump Replacements
Many jurisdictions are interested in seeing alternative pathways for residents who may
prefer to replace an air conditioner with similar equipment, rather than migrating to a heat
pump system. Alternative packages analyzed to support this request include air conditioning
equipment combined with additional efficiency measures resulting in options that are
reasonably energy or LSC cost equivalent to a heat pump system, to the extent feasible.
Figure 1 shows two AC pathways, one with an existing duct system and another path with a
new duct system, alongside the heat pump pathways. The figure presents the proposed
efficiency upgrade measures that would be part of a reach code (solid blue) along with the
relevant requirements from Title 24, Part 6 that are triggered as part of equipment
replacements (white or gradient blue). A reach code that establishes requirements when an
air conditioner is replaced or installed new could allow for either a heat pump to be installed
or an AC as long as the performance measures listed below are met.
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Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 31
Figure 1. AC vs. Heat Pump Pathway Requirements
The heat pump only and two AC pathways are presented in Figure 2 comparing total LSC
energy use relative to the existing home for the 1992-2010 vintage. The heat pump path is
represented by the DFHP Existing Furnace scenario. In most climate zones, the heat pump
path results in higher energy savings, in the milder climates the AC and new ducts and New
AC Only paths save marginally more energy.
Figure 2. AC vs. Heat Pump Energy Comparison
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32 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
Though the AC path does not need to meet cost-effectiveness criteria to be adopted as a
reach code since it’s an alternative path, in order to understand the implications of the AC
path on the customer, Table 20 and Table 21 present estimated costs for the new AC only
and the new AC + new ducts paths respectively.
Table 20. New AC Only Path Cost Estimates
New AC Only Path Pre-1978 1978-1991 1992-2010
Fan Efficacy: 0.45 W/CFM ---
Refrigerant Charge Verification $100 $100 $1007
R-49 Attic Insulation $5,483 $3,612 $1,827
Air Sealing $1,963 $1,963 $1,963
Total $7,546 $5,675 $3,790
Table 21. New AC/Furnace and New Ducts Path Cost Estimates
New AC and New Ducts Path Pre-1978 1978-1991 1992-2010
New R-8 Ducts $6,311 $6,311 $6,311
Furnace $5,951 $5,951 $5,951
Fan Efficacy: 0.35 W/CFM $500 $500 $500
Refrigerant Charge Verification $100 $100 $100
Total $12,862 $12,862 $12,862
7 This is an incremental cost and in some climate zones, refrigerant charge verification is required so there is no incremental cost added.
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33 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
4 Recommendations and Discussion
This analysis evaluated the feasibility and cost-effectiveness of AC to heat pump measures
in California existing homes built before 2010. To meet the needs of jurisdictions evaluating
this option, Statewide Reach Codes Team used both On-Bill and LSC-based lifecycle cost
approaches to evaluate cost-effectiveness and quantify the energy cost savings associated
with energy efficiency measures compared to the incremental costs associated with the
measures.
Conclusions and Discussion:
1. Heat pumps are significantly more efficient than gas furnaces, requiring less than
half the energy to meet the heating load. However, despite this reduction in heating
energy use, the cost of heating a home using electricity (heat pump) could be higher
than the cost to heat that same home with natural gas (furnace), depending on the
electricity tariffs relative to the gas tariffs. Therefore, while a heat pump measure
could be deemed as cost-effective over its lifecycle, installing a heat pump could
result in a decrease or an increase in utility costs in the first years relative to a gas
furnace and AC system. For example, the heat pump space heater measure in
climate zone 12 in the newest vintage results in the customer saving money on their
utility bill in SMUD territory but paying more on their utility bill in PG&E territory. Both
PG&E and SMUD territory use PG&E gas rates, but SMUD has lower electricity
rates than PG&E. With fuel switching measures like the AC to HP measure, the
electricity to gas ratio has a significant impact on the savings or costs the customer
will see by switching from gas to an electric heat pump space heater.
2. The LSC metric most often produces more favorable cost-effectiveness results
relative to the results produced using actual utility costs (On-Bill). When the analysis
assumes a higher escalation rate for natural gas costs relative to electricity in future
years (high gas escalation), the On-Bill results are more favorable in some cases.
a. In the oldest (pre-1978) vintage, all three measures (dual fuel heat pump
with existing furnace, standard heat pump space heater, and high efficiency
heat pump space heater) are cost-effective using the LSC metric in all
climate zones. When using the On-Bill metric, the measures remain cost-
effective in most climate zones.
b. In the newer (1978-1991 and 1992-2010) vintages, the dual fuel heat pump
(DFHP Existing Furnace) and the standard efficiency HPSH are cost-effective
based on LSC in all cases except for Climate Zone 15 when using both the
standard and California Alternative Rates for Energy (CARE) tariff.
3. Using the CARE tariff results in higher cost savings and cost-effectiveness relative to
standard rates, with almost all cases yielding first year utility cost savings. The DFHP
Existing Furnace is On-Bill cost-effective based on the high gas escalation scenario
in all cases in the pre-1978 vintage, and almost all cases in the 1978-1991 and
1992-2010 vintage. It is also On-Bill cost-effective in most climate zones for the
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34 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
modest gas escalation scenario across all vintages. In Climate Zones 5, 8, 9, 10, 14,
and 15, cost-effectiveness declines relative to other areas, and in some cases is not
cost-effective from an On-Bill perspective. This is the case for both the CARE tariff
and the standard rate.
4. The analysis also modeled the cost impact of using a standard time-of-use electricity
tariff versus switching to a newer electrification tariff, designed to reduce costs in
homes with heat pumps and/or electric vehicles. Older homes tend to be the least
efficient and achieve the most savings from improving equipment efficiency. In most
of the state, because older homes tend to use more electricity than a similarly sized,
newer vintage home, they realize more costs savings under the electrification tariff.
Newer homes tend to use less electricity and therefore do not realize the same cost
savings from switching tariffs; they generally perform better under the standard tariff.
This trend is different in milder climate zones in SCE territory (excluding CZ 15),
where newer homes realize more cost savings than older homes. Both the standard
and electrification tariffs in SCE territory include a daily allocation of lower-cost
baseline electricity and a second, higher-priced tier when the baseline is exceeded.
In many newer homes, a higher percentage of overall electricity use is within the
baseline allocation, resulting in greater cost savings.
5. Higher efficiency equipment reduces utility costs in all cases and improves cost-
effectiveness in many climate zones in the oldest vintage relative to standard
efficiency equipment. However, in more efficient newer homes, where cost-
effectiveness is generally lower, the savings are insufficient to offset the roughly
$3,000 increase in incremental cost.
6. Given the adopted Bay Area Air Quality Management District Zero NOx rule, and the
proposed California Air Resource Board or South Coast Air Quality Management
District (SCAQMD) Zero-NOx rules, and gas furnaces may not be available to be
installed in 2030, a sensitivity analysis was performed for the Zero NOx scenario and
found that cost-effectiveness decreases in many cases except in Climate Zones 8-
10, some results improve enough to become cost-effective. The improved cost-
effectiveness in Climate Zones 8-10 is due to the higher baseline cost when a HPSH
must be installed at year 10 when the furnace must be replaced. However, the
overall magnitude of 30-year On-Bill cost-effectiveness is lower because there are
only 10 years of utility cost savings. After year 10 the base case and upgrade
measures are both heat pumps.
7. While not evaluated in this report, the 2022 Single Family Retrofit Cost-effectiveness
Study (Statewide Reach Codes Team, 2024) shows it is beneficial to combine a heat
pump space conditioning system with photovoltaics (PV) because the additional
electricity required by the heat pump can be met by the PV system and result in
reduced utility bills.
8. In this study the dual fuel heat pump is evaluated with an existing furnace, however
the homeowner could choose to replace the existing furnace with a new furnace at
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35 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
this time as well. This measure (DFHP New Furnace) was evaluated in the 2022
Single Family Retrofit Cost-effectiveness Study (Statewide Reach Codes Team,
2024) but found to be less cost-effective than the DFHP Existing Furnace case.
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36 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
5 References
BAAD. (2025, May 7). Rules 9-4 and 9-6 Building Appliances. Retrieved from Bay Area Air
District: https://www.baaqmd.gov/en/rules-and-compliance/rule-
development/building-appliances
California Air Resources Board. (2022, August 12). 2022 State Strategy for the State
Implementation Plan (2022 State SIP Strategy). Retrieved from California Air
Resources Board Web site: https://ww2.arb.ca.gov/sites/default/files/2022-
11/Proposed_2022_State_SIP_Strategy.pdf
California Energy Commission. (2017). Rooftop Solar PV System. Measure number: 2019-
Res-PV-D Prepared by Energy and Environmental Economics, Inc. Retrieved from
https://efiling.energy.ca.gov/getdocument.aspx?tn=221366
California Energy Commission. (2021b). Final Express Terms for the Proposed Revisions to
the 2022 Energy Code Reference Appendices. Retrieved from
https://efiling.energy.ca.gov/Lists/DocketLog.aspx?docketnumber=21-BSTD-01
California Energy Commission. (2023). 2025 Energy code Hourly Factors. Retrieved from
https://www.energy.ca.gov/files/2025-energy-code-hourly-factors
California Energy Commission. (2023). Draft 2025 Energy Code Express Terms. Retrieved
from
https://efiling.energy.ca.gov/GetDocument.aspx?tn=252915&DocumentContentId=88
051
California Energy Commission. (2025). Final Express Terms for the Proposed Revisions to
2025 Title 24, Part 11 (CALGreen). Retrieved from
https://efiling.energy.ca.gov/GetDocument.aspx?tn=261229&DocumentContentId=97
592
California Public Utilities Commission. (2021a). Utility Costs and Affordability of the Grid of
the Future: An Evaluation of Electric Costs, Rates, and Equity Issues Pursuant to
P.U. Code Section 913.1. Retrieved from https://www.cpuc.ca.gov/-/media/cpuc-
website/divisions/office-of-governmental-affairs-division/reports/2021/senate-bill-695-
report-2021-and-en-banc-whitepaper_final_04302021.pdf
California Public Utilities Commission. (2021b). Database for Energy-Efficient resources
(DEER2021 Update). Retrieved April 13, 2021, from
http://www.deeresources.com/index.php/deer-versions/deer2021
Department of Energy. (2023). DOE Finalizes Energy Efficiency Standards for Residential
Furnaces to Save Americans $1.5 Billion In Annual Utility Bills. Retrieved from
www.energy.gov: https://www.energy.gov/articles/doe-finalizes-energy-efficiency-
standards-residential-furnaces-save-americans-15-billion
2025/06/09
37 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
E-CFR. (2020). https://www.ecfr.gov/cgi-
bin/retrieveECFR?gp=&SID=8de751f141aaa1c1c9833b36156faf67&mc=true&n=pt1
0.3.431&r=PART&ty=HTML#se10.3.431_197. Retrieved from Electronic Code of
Federal Regulations: https://www.ecfr.gov/cgi-
bin/retrieveECFR?gp=&SID=8de751f141aaa1c1c9833b36156faf67&mc=true&n=pt1
0.3.431&r=PART&ty=HTML#se10.3.431_197
Heinemeier, K. (2025). Residential HVAC Performance. Retrieved from
https://title24stakeholders.com/wp-content/uploads/2025/03/Residential-HVAC-
Performance.pdf
SCAQMD. (2025). Proposed Amended Rules (PAR) 1111 and 1121. Retrieved from
aqmd.gov.
SCAQMD. (2025, February 21). Space and Water Heating Building Appliances. Retrieved
from South Coast AQMD: https://www.aqmd.gov/docs/default-
source/Agendas/ssc/ssc-agenda-2-21-2025.pdf
Statewide CASE Team. (2023). Multifamily Domestic Hot Water. Retrieved from
https://title24stakeholders.com/wp-content/uploads/2023/08/2025_T24_CASE-
Report-_MF-DHW-Final-1.pdf
Statewide CASE Team. (2023). Residential HVAC PErformance. Retrieved from
https://title24stakeholders.com/wp-
content/uploads/2023/11/Revised_2025_T24_Final-CASE-Report-RES-HVAC-
Performance.pdf
Statewide Reach Codes Team. (2021). 2019 Cost-Effectiveness Study: Existing Single
Family Residential Buidling Upgrades. Retrieved from
https://localenergycodes.com/content/resources
Statewide Reach Codes Team. (2024). 2022 Cost-Effectiveness Study: Existing Single
Family Building Upgrades. Prepared by Frontier Energy. Retrieved from
https://localenergycodes.com/download/1222/file_path/fieldList/Single%20Family%2
0Retrofits%20CostEff%20Report.pdf
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38 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
6 Appendices
6.1 Map of California Climate Zones
Climate zone geographical boundaries are depicted in Figure 3. The map in Figure 3 along
with a zip-code search directory is available at:
https://ww2.energy.ca.gov/maps/renewable/building_climate_zones.html
Figure 3. Map of California climate zones.
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39 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
6.2 Cost-Effectiveness Results
6.2.1 Standard Rates
The following tables present results across the16 climate zones for the pre-1978 (Table 22
through Table 24) and the 1978-1991 (Table 25 through Table 27) vintages supplementing
the results in Section 3.
Table 22. [Pre-1978] DFHP Existing Furnace
Climate Zone Electric/ Gas Utility
First Incremental Cost
First-yearUtilitySavings
Lifecycle NPV Savings
2025
LSC NPV
On-Bill NPV Modest Gas Escalation
On-Bill NPV High GasEscalation
CZ01 PGE $2,405 $155 $25,223 $14,524 $51,831
CZ02 PGE $1,670 ($81) $11,551 $4,316 $20,806
CZ03 PGE $1,178 $39 $11,680 $7,248 $21,906
CZ04 PGE $1,670 ($7) $10,574 $4,948 $18,321
CZ04 CPAU $1,670 $63 $10,574 $5,177 $14,531
CZ05 PGE $1,424 ($29) $9,462 $4,574 $16,955
CZ05 PGE/SCG $1,424 ($314) $9,462 ($3,674) $2,838
CZ06 SCE/SCG $1,424 ($70) $4,223 $179 $1,795
CZ07 SDGE $1,424 $41 $4,278 $2,725 $5,055
CZ08 SCE/SCG $1,916 ($111) $3,216 ($1,507) $375
CZ09 SCE/SCG $1,916 ($168) $4,238 ($2,500) $125
CZ10 SCE/SCG $1,916 ($133) $3,755 ($1,774) $774
CZ10 SDGE $1,916 $201 $3,755 $6,175 $10,683
CZ11 PGE $2,162 $93 $11,970 $7,593 $24,951
CZ12 PGE $1,916 $46 $12,302 $6,948 $24,190
CZ12 SMUD/PGE $1,916 $584 $12,302 $18,997 $36,626
CZ13 PGE $2,162 $112 $8,180 $6,374 $18,740
CZ14 SCE/SCG $1,916 ($244) $6,646 ($2,926) $3,332
CZ14 SDGE $1,916 $65 $6,646 $4,203 $13,297
CZ15 SCE/SCG $2,408 $80 $401 $1,506 $2,532
CZ16 PGE $2,243 ($199) $17,538 $2,333 $25,276
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40 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
Table 23. [Pre-1978] Standard Efficiency HPSH
Climate Zone Electric/ Gas Utility
First Incremental Cost
First-yearUtilitySavings
Lifecycle NPV Savings
2025
LSC NPV
On-Bill NPV Modest Gas Escalation
On-Bill NPV High GasEscalation
CZ01 PGE $3,067 ($127) $27,155 $7,800 $48,445
CZ02 PGE $652 ($242) $13,342 $1,420 $21,282
CZ03 PGE $514 ($46) $11,946 $4,614 $19,670
CZ04 PGE $652 ($139) $13,059 $3,274 $21,888
CZ04 CPAU $652 ($48) $13,059 $3,194 $15,372
CZ05 PGE $583 ($131) $9,998 $2,045 $15,648
CZ05 PGE/SCG $583 ($449) $9,998 ($7,152) ($94)
CZ06 SCE/SCG $583 ($76) $3,860 ($652) $931
CZ07 SDGE $583 $35 $3,876 $1,901 $4,218
CZ08 SCE/SCG $721 ($128) $3,305 ($2,112) ($199)
CZ09 SCE/SCG $721 ($219) $4,415 ($3,839) ($1,141)
CZ10 SCE/SCG $721 ($188) $3,982 ($3,168) ($483)
CZ10 SDGE $721 $166 $3,982 $5,200 $10,049
CZ11 PGE $790 ($74) $14,045 $4,727 $24,836
CZ12 PGE $721 ($179) $13,850 $2,374 $21,622
CZ12 SMUD/PGE $721 $601 $13,850 $19,845 $39,654
CZ13 PGE $790 ($14) $9,394 $3,998 $17,858
CZ14 SCE/SCG $721 ($450) $10,103 ($6,294) $4,015
CZ14 SDGE $721 ($66) $10,103 $2,757 $18,994
CZ15 SCE/SCG $859 $68 $643 $1,364 $2,430
CZ16 PGE $2,095 ($484) $27,492 $2,918 $49,419
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41 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
Table 24. [Pre-1978] High Efficiency HPSH
Climate Zone Electric/ Gas Utility
First Incremental Cost
First-yearUtilitySavings
Lifecycle NPV Savings
2025
LSC NPV
On-Bill NPV Modest Gas Escalation
On-Bill NPV High GasEscalation
CZ01 PGE $5,998 $249 $30,518 $11,401 $52,316
CZ02 PGE $3,606 ($24) $13,354 $1,431 $21,449
CZ03 PGE $3,422 $100 $10,768 $3,122 $18,282
CZ04 PGE $3,606 $118 $13,537 $4,185 $22,984
CZ04 CPAU $3,606 $101 $13,537 $1,665 $13,950
CZ05 PGE $3,514 $10 $8,416 $384 $14,087
CZ05 PGE/SCG $3,514 ($308) $8,416 ($8,814) ($1,654)
CZ06 SCE/SCG $3,514 $3 $380 ($3,709) ($2,052)
CZ07 SDGE $3,514 $114 $430 ($1,063) $1,230
CZ08 SCE/SCG $3,698 $31 $1,065 ($3,478) ($1,420)
CZ09 SCE/SCG $3,698 ($40) $2,358 ($4,759) ($1,897)
CZ10 SCE/SCG $3,698 $6 $2,191 ($3,746) ($882)
CZ10 SDGE $3,698 $344 $2,191 $4,481 $9,276
CZ11 PGE $3,789 $283 $15,614 $7,801 $28,167
CZ12 PGE $3,698 $152 $14,490 $4,899 $24,385
CZ12 SMUD/PGE $3,698 $708 $14,490 $17,350 $37,236
CZ13 PGE $3,789 $326 $10,164 $6,697 $20,802
CZ14 SCE/SCG $3,698 ($173) $11,876 ($5,041) $5,522
CZ14 SDGE $3,698 $244 $11,876 $5,111 $21,254
CZ15 SCE/SCG $3,881 $335 $393 $2,323 $3,635
CZ16 PGE $5,071 $45 $34,043 $9,856 $56,737
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42 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
Table 25. [1978-1991] DFHP Existing Furnace
Climate Zone Electric/ Gas Utility
First Incremental Cost
First-yearUtilitySavings
Lifecycle NPV Savings
2025
LSC NPV
On-Bill NPV Modest Gas Escalation
On-Bill NPV High GasEscalation
CZ01 PGE $2,405 $99 $20,184 $10,746 $40,368
CZ02 PGE $1,670 ($114) $9,142 $2,185 $14,361
CZ03 PGE $1,178 $3 $9,033 $5,101 $15,624
CZ04 PGE $1,670 ($68) $8,160 $2,319 $11,818
CZ04 CPAU $1,670 $18 $8,160 $3,161 $9,418
CZ05 PGE $1,424 ($32) $7,070 $3,268 $11,902
CZ05 PGE/SCG $1,424 ($238) $7,070 ($2,666) $1,747
CZ06 SCE/SCG $1,424 ($39) $2,941 $614 $1,557
CZ07 SDGE $1,424 $1 $3,046 $1,512 $2,837
CZ08 SCE/SCG $1,916 ($78) $2,145 ($1,026) $145
CZ09 SCE/SCG $1,916 ($116) $2,978 ($1,655) $122
CZ10 SCE/SCG $1,916 ($89) $2,606 ($1,096) $571
CZ10 SDGE $1,916 $139 $2,606 $4,321 $7,320
CZ11 PGE $2,162 $103 $9,118 $6,239 $18,777
CZ12 PGE $1,916 $60 $9,604 $5,770 $18,506
CZ12 SMUD/PGE $1,916 $430 $9,604 $14,059 $27,062
CZ13 PGE $2,162 $111 $6,237 $5,242 $14,247
CZ14 SCE/SCG $1,916 ($230) $4,931 ($3,277) $1,039
CZ14 SDGE $1,916 $35 $4,931 $2,793 $9,271
CZ15 SCE/SCG $2,408 ($17) ($99) ($807) ($310)
CZ16 PGE $2,243 ($161) $14,397 $1,740 $20,318
2025/06/09
43 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
Table 26. [1978-1991] Standard Efficiency HPSH
Climate Zone Electric/ Gas Utility
First Incremental Cost
First-yearUtilitySavings
Lifecycle NPV Savings
2025
LSC NPV
On-Bill NPV Modest Gas Escalation
On-Bill NPV High GasEscalation
CZ01 PGE $3,067 ($128) $21,427 $5,043 $37,346
CZ02 PGE $652 ($235) $10,428 ($90) $14,711
CZ03 PGE $514 ($67) $8,999 $2,767 $13,608
CZ04 PGE $652 ($164) $9,984 $1,062 $14,605
CZ04 CPAU $652 ($66) $9,984 $1,535 $9,914
CZ05 PGE $583 ($132) $7,290 $703 $10,264
CZ05 PGE/SCG $583 ($361) $7,290 ($5,939) ($1,104)
CZ06 SCE/SCG $583 ($43) $2,450 ($151) $775
CZ07 SDGE $583 ($3) $2,539 $747 $2,065
CZ08 SCE/SCG $721 ($96) $2,111 ($1,658) ($472)
CZ09 SCE/SCG $721 ($152) $3,022 ($2,659) ($831)
CZ10 SCE/SCG $721 ($121) $2,672 ($2,017) ($239)
CZ10 SDGE $721 $114 $2,672 $3,568 $6,801
CZ11 PGE $790 ($46) $10,682 $3,545 $18,156
CZ12 PGE $721 ($110) $10,747 $2,278 $16,574
CZ12 SMUD/PGE $721 $445 $10,747 $14,697 $29,392
CZ13 PGE $790 $1 $7,141 $3,112 $13,232
CZ14 SCE/SCG $721 ($398) $7,556 ($6,191) $1,058
CZ14 SDGE $721 ($53) $7,556 $1,909 $13,834
CZ15 SCE/SCG $859 ($25) $71 ($848) ($322)
CZ16 PGE $2,095 ($445) $22,236 $708 $37,873
2025/06/09
44 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
Table 27. [1978-1991] High Efficiency HPSH
Climate Zone Electric/ Gas Utility
First Incremental Cost
First-yearUtilitySavings
Lifecycle NPV Savings
2025
LSC NPV
On-Bill NPV Modest Gas Escalation
On-Bill NPV High GasEscalation
CZ01 PGE $5,998 $169 $23,092 $6,895 $39,412
CZ02 PGE $3,606 ($75) $9,242 ($1,370) $13,547
CZ03 PGE $3,422 $53 $6,872 $675 $11,602
CZ04 PGE $3,606 $26 $9,114 $463 $14,143
CZ04 CPAU $3,606 $43 $9,114 ($868) $7,590
CZ05 PGE $3,514 ($16) $4,859 ($1,522) $8,122
CZ05 PGE/SCG $3,514 ($246) $4,859 ($8,164) ($3,246)
CZ06 SCE/SCG $3,514 ($1) ($1,546) ($4,024) ($3,059)
CZ07 SDGE $3,514 $47 ($1,407) ($2,879) ($1,576)
CZ08 SCE/SCG $3,698 $37 ($828) ($3,608) ($2,300)
CZ09 SCE/SCG $3,698 ($17) $232 ($4,573) ($2,623)
CZ10 SCE/SCG $3,698 $20 $82 ($3,764) ($1,856)
CZ10 SDGE $3,698 $251 $82 $1,869 $5,060
CZ11 PGE $3,789 $259 $10,685 $5,452 $20,283
CZ12 PGE $3,698 $138 $10,023 $2,954 $17,430
CZ12 SMUD/PGE $3,698 $525 $10,023 $11,609 $26,363
CZ13 PGE $3,789 $289 $6,612 $4,624 $14,951
CZ14 SCE/SCG $3,698 ($188) $7,697 ($6,429) $1,012
CZ14 SDGE $3,698 $182 $7,697 $2,525 $14,378
CZ15 SCE/SCG $3,881 $193 ($1,111) ($992) ($267)
CZ16 PGE $5,071 ($30) $26,407 $5,118 $42,581
2025/06/09
45 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
6.2.2 CARE tariffs
Table 28. [Pre-1978] DFHP Existing Furnace CARE
Climate Zone Electric/ Gas Utility
First Incremental Cost
First-yearUtilitySavings
Lifecycle NPV Savings
2025
LSC NPV
On-Bill NPV Modest Gas Escalation
On-Bill NPV High GasEscalation
CZ01 PGE $2,405 $364 $25,223 $16,641 $46,300
CZ02 PGE $1,670 $64 $11,551 $6,432 $19,553
CZ03 PGE $1,178 $128 $11,680 $8,248 $19,898
CZ04 PGE $1,670 $90 $10,574 $6,198 $16,835
CZ04 CPAU $1,670 $0 $10,574 $711 $711
CZ05 PGE $1,424 $69 $9,462 $5,901 $15,746
CZ05 PGE/SCG $1,424 ($157) $9,462 ($613) $4,598
CZ06 SCE/SCG $1,424 ($37) $4,223 $776 $2,067
CZ07 SDGE $1,424 $42 $4,278 $2,609 $4,434
CZ08 SCE/SCG $1,916 ($63) $3,216 ($595) $911
CZ09 SCE/SCG $1,916 ($97) $4,238 ($1,132) $972
CZ10 SCE/SCG $1,916 ($75) $3,755 ($660) $1,379
CZ10 SDGE $1,916 $160 $3,755 $4,963 $8,500
CZ11 PGE $2,162 $183 $11,970 $8,415 $22,212
CZ12 PGE $1,916 $152 $12,302 $8,126 $21,834
CZ12 SMUD/PGE $1,916 $686 $12,302 $20,080 $34,172
CZ13 PGE $2,162 $160 $8,180 $6,595 $16,418
CZ14 SCE/SCG $1,916 ($126) $6,646 ($779) $4,233
CZ14 SDGE $1,916 $101 $6,646 $4,530 $11,652
CZ15 SCE/SCG $2,408 $60 $401 $982 $1,788
CZ16 PGE $2,243 $34 $17,538 $5,963 $24,236
2025/06/09
46 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
Table 29. [Pre-1978] Standard Efficiency HPSH CARE
Climate Zone Electric/ Gas Utility
First Incremental Cost
First-yearUtilitySavings
Lifecycle NPV Savings
2025
LSC NPV
On-Bill NPV Modest Gas Escalation
On-Bill NPV High GasEscalation
CZ01 PGE $3,067 $205 $27,155 $12,440 $44,777
CZ02 PGE $652 ($16) $13,342 $5,095 $20,910
CZ03 PGE $514 $76 $11,946 $6,319 $18,293
CZ04 PGE $652 $41 $13,059 $6,031 $20,843
CZ04 CPAU $652 $0 $13,059 $255 $255
CZ05 PGE $583 $12 $9,998 $4,285 $15,110
CZ05 PGE/SCG $583 ($240) $9,998 ($2,978) $2,679
CZ06 SCE/SCG $583 ($42) $3,860 ($7) $1,259
CZ07 SDGE $583 $37 $3,876 $1,837 $3,652
CZ08 SCE/SCG $721 ($75) $3,305 ($1,076) $457
CZ09 SCE/SCG $721 ($131) $4,415 ($2,095) $72
CZ10 SCE/SCG $721 ($110) $3,982 ($1,649) $504
CZ10 SDGE $721 $139 $3,982 $4,305 $8,106
CZ11 PGE $790 $94 $14,045 $7,108 $23,108
CZ12 PGE $721 $20 $13,850 $5,506 $20,829
CZ12 SMUD/PGE $721 $772 $13,850 $22,326 $38,189
CZ13 PGE $790 $89 $9,394 $5,347 $16,369
CZ14 SCE/SCG $721 ($241) $10,103 ($2,418) $5,836
CZ14 SDGE $721 $62 $10,103 $4,832 $17,541
CZ15 SCE/SCG $859 $52 $643 $930 $1,769
CZ16 PGE $2,095 $16 $27,492 $10,883 $47,907
2025/06/09
47 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
Table 30. [Pre-1978] High Efficiency HPSH CARE
Climate Zone Electric/ Gas Utility
First Incremental Cost
First-yearUtilitySavings
Lifecycle NPV Savings
2025
LSC NPV
On-Bill NPV Modest Gas Escalation
On-Bill NPV High GasEscalation
CZ01 PGE $5,998 $450 $30,518 $13,096 $45,609
CZ02 PGE $3,606 $126 $13,354 $3,405 $19,322
CZ03 PGE $3,422 $172 $10,768 $3,678 $15,720
CZ04 PGE $3,606 $209 $13,537 $4,926 $19,859
CZ04 CPAU $3,606 $0 $13,537 ($4,595) ($4,595)
CZ05 PGE $3,514 $103 $8,416 $1,521 $12,412
CZ05 PGE/SCG $3,514 ($148) $8,416 ($5,742) ($19)
CZ06 SCE/SCG $3,514 $11 $380 ($3,634) ($2,319)
CZ07 SDGE $3,514 $89 $430 ($1,774) $25
CZ08 SCE/SCG $3,698 $33 $1,065 ($3,586) ($1,955)
CZ09 SCE/SCG $3,698 ($10) $2,358 ($4,304) ($2,027)
CZ10 SCE/SCG $3,698 $21 $2,191 ($3,628) ($1,354)
CZ10 SDGE $3,698 $255 $2,191 $2,127 $5,893
CZ11 PGE $3,789 $327 $15,614 $7,382 $23,549
CZ12 PGE $3,698 $236 $14,490 $5,437 $20,914
CZ12 SMUD/PGE $3,698 $772 $14,490 $17,439 $33,302
CZ13 PGE $3,789 $310 $10,164 $5,378 $16,558
CZ14 SCE/SCG $3,698 ($54) $11,876 ($3,161) $5,265
CZ14 SDGE $3,698 $263 $11,876 $4,651 $17,300
CZ15 SCE/SCG $3,881 $232 $393 ($35) $970
CZ16 PGE $5,071 $360 $34,043 $13,682 $50,953
2025/06/09
48 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
Table 31. [1978-1991] DFHP Existing Furnace CARE
Climate Zone Electric/ Gas Utility
First Incremental Cost
First-yearUtilitySavings
Lifecycle NPV Savings
2025
LSC NPV
On-Bill NPV Modest Gas Escalation
On-Bill NPV High GasEscalation
CZ01 PGE $2,405 $273 $20,184 $12,619 $36,168
CZ02 PGE $1,670 $12 $9,142 $4,166 $13,857
CZ03 PGE $1,178 $76 $9,033 $6,011 $14,375
CZ04 PGE $1,670 $23 $8,160 $3,702 $11,261
CZ04 CPAU $1,670 $0 $8,160 $711 $711
CZ05 PGE $1,424 $40 $7,070 $4,285 $11,150
CZ05 PGE/SCG $1,424 ($122) $7,070 ($400) $3,130
CZ06 SCE/SCG $1,424 ($21) $2,941 $952 $1,705
CZ07 SDGE $1,424 $9 $3,046 $1,631 $2,667
CZ08 SCE/SCG $1,916 ($45) $2,145 ($395) $544
CZ09 SCE/SCG $1,916 ($67) $2,978 ($712) $712
CZ10 SCE/SCG $1,916 ($50) $2,606 ($357) $976
CZ10 SDGE $1,916 $110 $2,606 $3,472 $5,826
CZ11 PGE $2,162 $155 $9,118 $6,542 $16,502
CZ12 PGE $1,916 $128 $9,604 $6,434 $16,553
CZ12 SMUD/PGE $1,916 $506 $9,604 $14,879 $25,269
CZ13 PGE $2,162 $135 $6,237 $5,170 $12,318
CZ14 SCE/SCG $1,916 ($128) $4,931 ($1,351) $2,112
CZ14 SDGE $1,916 $65 $4,931 $3,123 $8,195
CZ15 SCE/SCG $2,408 ($9) ($99) ($653) ($256)
CZ16 PGE $2,243 $28 $14,397 $4,676 $19,471
2025/06/09
49 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
Table 32. [1978-1991] Standard Efficiency HPSH CARE
Climate Zone Electric/ Gas Utility
First Incremental Cost
First-yearUtilitySavings
Lifecycle NPV Savings
2025
LSC NPV
On-Bill NPV Modest Gas Escalation
On-Bill NPV High GasEscalation
CZ01 PGE $3,067 $146 $21,427 $8,941 $34,641
CZ02 PGE $652 ($47) $10,428 $3,076 $14,864
CZ03 PGE $514 $33 $8,999 $4,259 $12,882
CZ04 PGE $652 ($10) $9,984 $3,558 $14,338
CZ04 CPAU $652 $0 $9,984 $255 $255
CZ05 PGE $583 ($18) $7,290 $2,586 $10,196
CZ05 PGE/SCG $583 ($199) $7,290 ($2,659) $1,219
CZ06 SCE/SCG $583 ($24) $2,450 $215 $956
CZ07 SDGE $583 $6 $2,539 $898 $1,929
CZ08 SCE/SCG $721 ($57) $2,111 ($896) $57
CZ09 SCE/SCG $721 ($91) $3,022 ($1,455) $13
CZ10 SCE/SCG $721 ($71) $2,672 ($1,035) $390
CZ10 SDGE $721 $96 $2,672 $2,939 $5,474
CZ11 PGE $790 $74 $10,682 $5,209 $16,830
CZ12 PGE $721 $30 $10,747 $4,418 $15,794
CZ12 SMUD/PGE $721 $573 $10,747 $16,567 $28,332
CZ13 PGE $790 $72 $7,141 $4,003 $12,047
CZ14 SCE/SCG $721 ($224) $7,556 ($2,880) $2,930
CZ14 SDGE $721 $42 $7,556 $3,476 $12,809
CZ15 SCE/SCG $859 ($13) $71 ($639) ($219)
CZ16 PGE $2,095 ($25) $22,236 $7,529 $37,120
2025/06/09
50 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
Table 33. [1978-1991] High Efficiency HPSH CARE
Climate Zone Electric/ Gas Utility
First Incremental Cost
First-yearUtilitySavings
Lifecycle NPV Savings
2025
LSC NPV
On-Bill NPV Modest Gas Escalation
On-Bill NPV High GasEscalation
CZ01 PGE $5,998 $339 $23,092 $8,460 $34,300
CZ02 PGE $3,606 $57 $9,242 $547 $12,409
CZ03 PGE $3,422 $111 $6,872 $1,228 $9,907
CZ04 PGE $3,606 $113 $9,114 $1,472 $12,340
CZ04 CPAU $3,606 $0 $9,114 ($4,595) ($4,595)
CZ05 PGE $3,514 $58 $4,859 ($544) $7,120
CZ05 PGE/SCG $3,514 ($124) $4,859 ($5,789) ($1,857)
CZ06 SCE/SCG $3,514 $5 ($1,546) ($3,963) ($3,196)
CZ07 SDGE $3,514 $39 ($1,407) ($3,143) ($2,122)
CZ08 SCE/SCG $3,698 $32 ($828) ($3,800) ($2,766)
CZ09 SCE/SCG $3,698 ($0) $232 ($4,336) ($2,784)
CZ10 SCE/SCG $3,698 $25 $82 ($3,803) ($2,290)
CZ10 SDGE $3,698 $184 $82 $124 $2,631
CZ11 PGE $3,789 $272 $10,685 $4,725 $16,488
CZ12 PGE $3,698 $191 $10,023 $3,148 $14,639
CZ12 SMUD/PGE $3,698 $573 $10,023 $11,680 $23,445
CZ13 PGE $3,789 $259 $6,612 $3,262 $11,441
CZ14 SCE/SCG $3,698 ($82) $7,697 ($4,629) $1,311
CZ14 SDGE $3,698 $195 $7,697 $2,166 $11,452
CZ15 SCE/SCG $3,881 $133 ($1,111) ($2,349) ($1,794)
CZ16 PGE $5,071 $245 $26,407 $8,685 $38,470
2025/06/09
51 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
6.3 Utility Rate Schedules
6.3.1 Pacific Gas & Electric
The following pages provide details on the PG&E electricity and natural gas tariffs applied in
this study. Table 34 describes the baseline territories that were assumed for each climate
zone. A net surplus compensation rate of $ 0.03396/ kWh was applied to any net annual
electricity generation based on a one-year average of the rates between February 2024 and
January 2025.
Table 34. PG&E Baseline Territory by Climate Zone
Climate Baseline Zone Territory
CZ01 V
CZ02 X
CZ03 T
CZ04 X
CZ05 T
CZ11 R
CZ12 S
CZ13 R
CZ16 Y
The PG&E monthly gas rate in $/therm was applied on a monthly basis according to the
rates shown in Table 35. The gas rates were developed based on the latest available gas
rate for January 2025 and a curve to reflect how natural gas prices fluctuate with seasonal
supply and demand. The seasonal curve was estimated from PG&E’s monthly residential
tariffs between 2015 and 2024. 12-month curves were created from monthly gas rates for
each of the ten years. The ten annual curves were then averaged to arrive at an average
normalized annual curve. The baseline and excess transmission charges were found to be
consistent over the course of a year and applied for the entire year based on January 2025
rates. The costs presented in Table 35 were then derived by establishing the baseline and
excess rates from the latest January 2025 tariff as a reference point, and then using the
normalized curve to estimate the cost for the remaining months relative to the January rates.
Corresponding CARE tariffs reflect the 20 percent discount per the GL-1 tariff.
2025/06/09
52 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
Table 35. PG&E Monthly Gas Rate ($/therm)
Month Total Charge
Baseline Excess
January $2.63 $3.15
February $2.64 $3.16
March $2.41 $2.94
April $2.24 $2.77
May $2.21 $2.74
June $2.23 $2.77
July $2.26 $2.80
August $2.36 $2.90
September $2.42 $2.98
October $2.52 $3.07
November $2.63 $3.17
December $2.70 $3.23
2025/06/09
ial
GAS
Baseline Territories and Quantities 11
Effective A ril 1, 2022 • Present
BASELINE QUANITTIES (Therms Per Day Per Dwelling Unit)
lndividualli Metered
Baseline Summer Winier Off-Peak
Territories (April-October) (Nov, Feb, Mar)
Effective Al!r, 1, 2022 Effective Nov. 11 2022
p 0.39 1.88
Q 0.56 1.48
R 0.36 1.24
s 0 39 1.38
T 0.56 1.31
V 0.59 1.51 w 0.39 1.14
X 0.49 1.48
y 0.72 2.22
Master Metered
Baseline Summer
Territories (April-October)
Elfecllve Apr. 1, 2022
p 0.29
Q 0.56
R 0.33 s 0.29
T 0 56
V 0.59
w 0 26
X 0.33
y 0.52
Summer Season: Apr.Oct
Winter Off-Peak: Nov, Feb, Mar
Winier On.Peak: Dec, Jan
Advice Leiter: 4589-G
Decision 21-11-016
GRC 2020 Ph II [Application 19-11-019]
Filed: Nov 22. 2019
Winter Off-Peak
(Nov, Feb, Mar)
Effective Nov. 1, 2022
1.01
0.67
0.87
0.61
1.01
1.28
0.71
0.67
1.01
Winter On-Peak
(Dec,Jan)
Effective Dec. 11 2022
2.19
2.00
1.81
1 94
1.68
1.71
1.68
2.00
2.58
Winter On-Peak
(Dec,Jan)
Effective Dec. 1, 2022
1.13
0.77
1.16
0.65
1.10
1.32
0.87
0.77
1.13
53 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
2025/06/09
Gas and
Electric Compa.ny·
U 39 Oekland, Gafifomia
Revised
cancelling Revised
Gal. P.UC. Sheet No.
Gal. P.U.C. Sheet No.
5912().E
58758-E
EIUECTRIC SCHEDULE E-TOU-C Sheet 2
RESIDENTIAL TIME-OF-USE (PEAK :PRICING 4 -9 p.m. EVERY DAY)
RATES:
(Cont'd}
E-TOU-CTOTAL BUNDLED RATES
Total Energy Rates ($ per kWh)
Summer Total Usage
Baseline Credlt (Applied to Baseline Usage Only)
\Mnter Total Usage
Base1tne Credit (Applied to Baseline Usage Only)
Delivery Minimum Bill Amourrt ($ per meter per day)
California Climate Credit (per household, per semiannua1 payment occurring in the Apnl and October bill
cycles}
PEAK OFF-PEAK
ro.oong (R) S0.50429 (R)
($0.10135) (R) (SO 10135) (R)
$0.49312 (R) S0.46312 (R)
($.0.10135) (R) (S0.10135) (R)
$,0.39167
($58.23) ,(R)
Total bund ed: service charges shO'Wll on customers bills are unb 111dled according to the component
rates shOWTil, below. lMlere the del1very minimum bi[I ammmt appr es, the ,customer's bill wi[I equal tile sum of (1) lhe delivery minimum bill amount plus (2) for bundled service, the generation rate times the
number of kWh used. For revenue aroounling purposes, tile revenues from the delivery minimum bi[I
amount wm be assigned to the Transmission, Transmission Rate Adj;ustments, Reliability Services,
Public Purpose Programs, Nuclear Derommissiontng,, Competition Transition Charges, E111ergy Cost Recovery Amount, Wil'.dfire Fund Ciharg:e, arnd New System Generation Charges based on kWh
usage times the correspmding unbundled rate compo111ent per kWh, with any residual revenue assigned to Distribution.
Advice 7469-E
Dedsion
Issued by
Shi/pa Ramaiya
Vice President
Regulatory Proceedings ana Rates
Submitted
Effective
Resolution
(Continued)
December 30, 2024
January 1, 2025
54 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
2025/06/09
Gas and
Elec.tric Company" Revised
Cancelling Revised
Gal. P.U.C. Shee.t No.
Gal. P.U.C. Shee.t No.
u 39 Dakland, Galifomia
ElJECTRIC SCHEDULE E-TOU-C Sheet 3
IRESIDENT AL TIME-OF-USE (PEAK PRICING 4 -9 p.m. EVERYDAY)
RATES:
(Cont'd.) UNBUNDLING OF E-TOU-C l OTAL RAlES
5nergy Rates by Com,ponent (S pe:r kWh)
Generation:
Summer (a'II usag.e)
Wi:nter (all usage)
Distribution••.:
Summer (a'II usage)
Wi:nter (all u,sage)
PEAK
$0.24730
$0.18725
$0.24056
$0.HIM5
Conservation Incentive Adj'u,stment (Baseline Usage)
Conservation Incentive Adjlllstment (OYer Baseline Usage)
T,ransm·ission* (all u.sage)
Transmission Rate Adjustments• {am usage)
Reliability Services•· (a usage)
Publ'lc Purpose Programs (all usage)
Nuc,lear Decommissioning (all usage)
Competition Transition Charges (all usage)
Energy Cost Recov-e:ry Amou rrt (all usage)
Wfldlire Fund Charge (all usage)
New System, Generation Charge (all usage)""
Wrldlire Hardening Charge (a I usage)
Recove.ry IBond Charge-(a'II usa,9e)
Recove.ry IBond Credit (all usage)
Bundled Power Charge I ndifferem:e Adjus1ment (al usage)~ ..
(I)
(I)
(I)
(I)
OFF-PEAK
$0.16430
$0.16057
$0.22056
$0.18313
(S0.03733) (I}
S0.06402 (I)
S0.05122 (I)
(S0.0 1509) (R)
S0.00032 (I}
S0.02tl44 (R)
(SO.OC>D•13) (I}
(S0.000172) (R)
so.00001 (I)
S0.00595 (I)
S0.005,74 (R)
S0.00494
SO.OC>650
(SO.OC>650)
(S0.02327) (R)
(I)
(I)
(IJ
(I)
.. Transmission, Transmission Rate Adjustments and Reliability Service charges are combined tor
pFesentation on customer bills,
H Distribution andl Mew System Generation Oharges are combi ed for presentation on customer
lbfllls .
• ,.. Direct Access, Commu ity Choice AggreQ!iltion and Transilional Bundled Service customers pay th.e .applicable Vintaged Power Chafge lnoifference Adjustment. Generation and BuncUed PCIA
aFe combined for presentation on bundled customer bills.
59121-E
58759-E
(Continuecl)
Advice
Decision
7469-E Issued by
Shilpa Ramaiya
Vice President
Regulatory Proceedings and Rates
Submitted
Effective
Resolution
December 30. 2024
January 1. 2025
55 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
2025/06/09
Gas and
Electric ,Company· Revised
Cancelling Revised
Caf. P.U.C. Sheet No.
Caf. P.U.C. Sheet No.
59109-E
58755-E
U 3.9 Oakland, Ga!ifomia
ELECTRIC SCHEDULE E-ELEC Sheet 2
RESIDENTIAL TIME-OF-USE (ELECTRIC HOME)
SERVICE FOR CUSTOMERS WITH QUALIFYING ELECTRIC TECHNOLOGIES
RATES:{Con.t'd.)
Direct Access (DA) and Community Choice Aggregation {CCA) charges sha~ be calrula!ed in accordance with the
paragraph in this rate schedule 1i!i1ed Bi ling.
TOTAL BUNDLED RATES
Base Services Charge ($ pe, me er per day) $0.4Q2S1
PEAK PP.RT-PEAK OFF-PEAK Total Em,.-QiY Rates ($ per kWh)
Summer Usage $0.60728 (R) ll0.44540 (R) $0.38872 (1R)
Win er Usage $0.375n {R) $0.35368 (R) $0.33982 {R )
Cs i omia Cfima e Credit (per hou,;e'hold, per
semi-annual payment occurring in the April an,d
October bill cycles)
($58.23) (R)
Total trundled service charges shown on a. custome,'s bi Is are unbundlied according to lhe co111ponen.t rates shown below.
UNBUINDLING OF TOTAL RATES
Energy Rates by Compone:nl ($ per· kWh) PEAK PP.RT-PEAK OFF-PEAK
Gene.ration:
Summer Usag,e-$0.3 165-ll (I) $0-21748 (I) $0.17238
Winter 'Usage $0.15446 (I) $0.13449 (I) $0.12114
Distribution••:
Summer Usagoe-$0.23528 (I) $0.17251 (I) $0.16093
Winter IIJsa.ge $0.1651l0 (I) $0.16378 (I) $0.16327
Transmission,• (all usa.g:e) $0.051122 (I) $0.05122 (I) $0.05122
Transmission, Rate Adju,stments• (s I usage) ($0.0 1501l) (R) ($0.01509) (R) ($0.01501l)
Reliability Services• {all usagoe) $0.00032 (I) $0.00032 (I) $0.00032
Public Purpose Programs ,(all usag e) $0.02644 (R) $0.02644 (R) $0.02644
Nluclear Decommissioning (all usage} ($0.00013~ (I) ($0.00013~ (I) ($0.00013~
Competition Transition Charges (all usagoe") {$0.00072 (R) ($0.00072 (R) ($0.00072
IEnerg;y Cost Recover;y Amount {all usage) $0.00001 (I) $0.00001 (I) $0.00001
Wildfire Fund Charge (al usage) $0.005Q5 (I) $0.00595 (I) $0.005g5
Nlew System Generation Charge (a I usage}" $0.00574 {R) $0.00574 (R) $0.00574
Wildfire Ha:rder,ing Charge (all usage) $0.0049'4 $0.00494 $0.00494
IRecover;y Bond Charge (all usage) $0.00650 S0.00650 $0.00650
IRecover;y Bond Credit (all ,usage) ($0.00650l ($0.00650~ ($0.00650~
Bundled Power Charge Indifference {$0.023-27 {R) ($0.02327 (R) ($0.02327
Adjustment (all usage}"'
Transmissiom. Transmission Rale Adjustments and Rel" ·1ity Se.rvice ch~ are combined for p,esen ation on cusAorner
bills.
Dis ·bulioo and N,ew System Generation Ciharges e combined fur presentation on ru~torner bills.
Direcl Access. Community Cboice Aggregation amd Transition Bum.med Se<Vice Customers pay 1tte applicabl.e Vimiaged
P.ower Charge Indifference Adjus1ment. Gemeration ar>d Bundled PC IA are combined for presentation oo bundl'.e,d custcmer
bills.
(I)
(I)
{I)
(I)
(I)
(R}
{I)
(R}
(I)
(R}
(I)
{I)
(R}
(R}
{Continued)
AcMce
Decision
7469-E Issued by
Shi/pa Ramaiya
Vice President
Regulatory Proceedings and Rates
Submitted
Effective
Resoiutfon
December 30, 2024
January 1, 2025
56 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
2025/06/09
Gas and
Electric ,Compan( Original ca,: P.UC. Sheet No. 54738-E
U 39 San FrancisC(); Cafitomia
ELECTRIC SCHEDULE E-ELEC Sheet 3 (N)
RESIDENTIAL TIME-OF-USE (ELECTRIC HOME) (N)
SERVICE FOR CUSTOMERS WITH QUA!LIFYING ELECTRIC TECiHNOLOOllES
SPECIA L 1. TIME PERIODS: Times ofli'le year and (mes of !he day are defined as folows:
CON DITIION S:
Advice
Decision
All Year:
Pee : 4:00 p.m. to Q:00 p.m. ~ery day in:cludin,g weekends and lu:J idays.
Partial-Peak: 3:0D p.m. to 4:00 p.m. and Q:00 p.m. to 12:00 a.m. e·very day includin11
weekends .end oo 1d!sys.
Olf-Pes_ : All olhe.r hours.
2. SEASONAL CHANGES: T1he summer season is Ju:ne 1i 1hrough September 30 and
the ~,inter s,a-ason is October 1 lhroug'h May 3,1. When b·lrng include.s use ·n both lhe
summer and winter periods, charges will be pra-ated based u:pon the numbe.r of days
in e<acli pe.iod.
3. ADDITIONAL METERS: If a re.siden ·s1 dwelling unit is served by more than -o.ne
electric meter. the cuslomer must desilJnat,a-whlch meter is lhe primary me er an.d
which is (are) he addition.al meter(s).
4. Bl LLING: A custo:mer"s b.11 is csJculs.ted based on lhe oplion applicable to the
custo:mer.
Bundled Servi.Ce Cu.stomers receive generation and delivery seniice.s solely from
PG&E. The custo:mer"s b.11 is based on the U nbun.dling o Total Rates set orth .above.
Tr-ansiliona Bund ed Service (TBS) Customers take TBS as p:rescribed in Rules
22 .. 1 and 23,. 1. or tak•e PG&E bundled service prior to the end oi li'te· six (6) mon1h
advance notice period required to eleci PG&.E bundled service as prescn."bed in Rules
22 .. 1 and 23,.1. TBS ,custarners shall pay all charges soown in !he Unbundling ,of Total
Raf es -excep or ·lne-Bund d Power Charge In.difference Adjustme.nt andl !he
generalion charge. TBS cuslomers shall also pay fo:r their a,pplica'ble Vi:n aged lf>,ower
Charge Indifference Adj,:,isbn-e,nt provided in the table below. a:nd the short.term
commodity prices as set forth in Schedule TBGC.
(N)
(Oontim.100)
6768-E
D.21-11"0116
Issued by
Meredith Allen
Vice President, Regufato,y Affairs
Submitted
Effective
Resolution
November 18, 2022
December 1i. 2022
57 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
2025/06/09
cific Gas and
Electtic Companf Revised
Cam;e/11119 Revised
Cal. P_U'..C. Sheef MJ_
Cal. P_LJ'..C. Sheet MJ_
59329-E
50086-E
U 39 Oakland. CalifDmia
ELEC11RIC: SCHEDULE O.CAR!E Sheet 1
LI.NEJITEM DISCOUNT FOR CAUFORiNIA. Al TEIRiNA TE RA TES FOR EJNERGY (CAR;E)
CUSTOMBRS
AW,llCABILITY: This sched is applicable to singl~ese and pol~se re-sidential .service in
single-famiJy dK'Elinga and i111 flalll and apeltmEtilll separatEfy rnelefed by PG&E
and domeslic i;;:ub1111eterad tenantsr,es.iding -n mul1ilarmyaccom1111odali□11.S.
mohileh□1111e perks and to q,u ifying recraati□nal vehide ?SllB and mSJ!Das ,BIil! 11D
fBrm servi.ae on lhe premise5i opa-ated by me person Ml□se re-sidence is i;;:uppied
llrurc!qjh lh.e same 1111e er. Where ·Ille applicant qu: es for California Alternate
Raisa or Enet'QIY (CA.RE) ul!lder lhe ,eligibiity and celtifica!io111,c::ritetria set forth in
l:!lectllicRuie 19.L CARiE ser,,ice is avai le on SclriedUlea E-1. E-TOU-B.
E-TOLJ-C. E-TOLJ-0. EV2. E-ELEC. EIM\ IES. ESR. ET &11d IEM-TOU_
TERiRITORY: This rate schedute ,applies eVEl"'J!Nhetre PG&E j!rowles electric seMCB..
RAT1ES: Cusllllrnars takimg ear.ice oo 1lili5i rale schedule whose 01Jrleiwisa BJ1pliceille rate
sched h.as no IDeivetry inmum Bill Amounl (Scln.ecMe IE-ELEC) wil reoaiYe a
CAIRE petraelllege dioootnt of 38.351% (IR) on lheir at.al bundled ,charges (exoepl
for the Califolllllia Climate Cradi . id! ·will not be discoonted) .. Customers tIDamg
SEHrvioe oo lhia rate 6-Chedule whose olherwise appica}!je rate .schedule has a
Oeivet!)' Minimum Bill Amount (al other sched'ule!i) will receive ,e CAIRE
percentage discount r p;: or "C" below) on llrles at.al bundled ,charges less charges
from wtach they are e:,;e!11lt (Wildm,e IFumd Cherg/31, IRE!CO'o'BI'}' Sood Cl1arge.
ReGOYB[)' B«ld Credit, and he C/!IRJE i;;:urdlerge poltion of the p.iblic purpose
i-ogram charge used o fund Iha CAIRE diSCOO!it) oo ·lfle.ir odrlEtwise .eppliceille
rate scli,edule (e,ooept ·for Iha C oonia Cli1111ete Cre,:f • l!lhim will nal be
disoou111.ted) 811d also wil reoaive a ~ disoounl ("iB" or "O' below) oo he
deli'le.ry 1111inimum ~ B11T1□u111.t. if applicable_ The CARE dis.couni wil be calcueted
for direct acoesa and com1111unity choice e,ggregatio111 aJSlomers based on 1lne tot.al
charges es if lhey were i;;:umjecl o, bundl seMOe rales. Oioootnlll will be applied
as ,e reduction o, disiribuiioo ,merges. These oondi ions also ,eppl:;o to maslBr
meier-ed oustorne1E and lo, quali 1ed Elm-metered IBnants wlrLetre he master-meter
customer is jcintly seNe<I ul!lder PG&E'a Ra e Sdnedule D-CAIRE ,end either
Scl!,edule EM, ES. ESR. ET. or EIM-TOU.
Adwoe 7"516-E
Oecision
For 1111estE!t'-me ered ,oost□1111ers where one or more of the subme ered tenenlls
qualifies ror CAIRE rste!l uJ!ldEJ he eligibiJJly and aertificati□n critetlia .set forth in
Rule 119.. 1. 19.2. or 19.3. lln.e CARiE disooulll is equal ·to a perae1111!ege (~c· below) m the otal bundled merges. 1111Ultiplied by he nurmer of CARiE units cf"IVide<I D')'
lln.e to1BI 11UJJT1ber of unilll. In addi-□n, 1111ester-m.eterad customera eligible for
O'-C.ARE wil reoaiYB a pernetlltag;e disoounl or below) on lhe deli,YBI)' millWllUIITl
bill am001t, if .ep,pliceille.
II is lhe r~pa11.Sibility of he master-me ered wstomer ID ,advise PG&E within 15
days ·follwmg any dtlange in lhe nu1111bet' of d'welq units and/or any decrease in me nu1111iletr of q,ualifyi1119 CARiE applicants ltiat resullll wf:ten sud! ewlicants move
out of heir swmetef8d or ooo-subrnetered dwellq unit. or i;;:ub1111eterad
permane1111-reaide11oe RV or per1111enent-msidence ooa.t
lssuedby
Shitpa Ramaiya
Vice F:re.sidertl:
Regulalo,:y ProoeadingB and Rales
S-ubmitted
l!:tfecm,a
ili!esal!Jtioo
(Con.ti111Ued}
Fe'brue!)' 26, 2025
Meroh 1, .2025
58 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
2025/06/09
Gas and
Electdc Campanv· Cancel/frig
Revise
Revise
Cal. P.IJ..C. S'heeJ MJ.
Cal. fi'.U.C. S'heeJ MJ.
50087-E
58198-E
U 39 OaMand, California
Ei1LEC11RIC SCHEDULE D.CARiE Sheet 2
LINE-ITEM DISCOUNT FOR CAUFO~IA Al T18RJNA TE RA TES FOR ENERGY (CAR!E)
CUSTO BRS
A. D-CARE Disooullll:
B. Deiveqr Miwnim Bill Disooulll:
C. taster-Meter 0-C.ARIE Discoont:
D. t.1.asler-Meter Delivery MiJlli,mu,m
Bill Discount:
3!lu000
S0..000 as..,ooo so.,ooo
% (Percent} (II
% ~P,erc:ent)
% ~P,erc:ent} (I)
% (Percent}
SPECIAL 1. OTI-IERWISE APiPLICA.filE SCHEDULE: Th.e Speci Candi iall1.8 of ·the
CO DJTIONS: Customer's. otherwis.e ewlicable rate schedule Ml apj!ly to this. sr:hedula
Advioe 7'469-E
Oeci.s-ioo
2. BLIGIBILITY: To be efigible to receive D-CARE the applicant lillllSt qualify
undE!lf 1he criteria s.et ·fol1lrl in PG&E's IBlecillic Rules 1 Q_ 1. 19-2. aJl1d 19.3 .ellld meet
llne oertifica -n requirements hereof l.o 1he selisfactioo of PG&E ,Quatifying Daect
Aooes5!., Community Chai.OB Aggreg,;Uioo Setl'llioe, BM TrsnsiliooSI Bundled
Servioe custo,me1a are also ,eligiNe in, im:s s.ervica on Sdnedule D-CA.RE
Af1plice11J 1, rnay qµaify fur D-CAIRE .el their primary residence ol!lly. Cu'Slarnera or
au , l'lllll1.a-ed anBlll1!i panicipating in lln.e Famiy Electric Rate A.ssistanoe (FERA,\
pragll'Bm ,cannot ooncurrsruly panicipale m he CARE J]fOgl'am.
(B,,/Jedby
S-bilpa Rameiya
VH:e PTesidellt
Regulalt:Ny Proaeeding,s and Rates
Svbmitted Deoernbe.r 30, .2024
f':.fmctivs Janu811V 1 .. 2025
"1eoolution
59 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
2025/06/09
Summer Daily Allocations (June through September) Winter Daily Allocations (October through May)
All-
Daily kWh Electric
Baseline Region Number Allocation Allocation Baseline Region Number
5
6
8
9
10
13
14
15
16
17.2 17.9
11.4 8.8
12.6 9.8
16.5 12.4
18.9 15.8
22.0 24.6
18.7 18.3
46.4 24.1
14.4 13.5
SPECIAL CONDITIONS
5
6
8
9
10
13
14
15
16
Schedule TOU-D
TIME-OF-USE
DOMESTIC
(Continued)
1. Applicable rate time periods are defined as follows:
Option 4-9 PM. Option 4-9 PM-CPP. Option PRIME. Option PRIME-CPP :
Sheet 12
TOU Period Weekdays Weekends and Holidays
Summer Winter Summer Winter
On-Peak 4 p.m. -9 p.m. NIA NIA NIA
Mid-Peak NIA 4 p.m. -9 p.m. 4 p.m. -9 p.m. 4 p.m. -9 p.m.
Off-Peak All other hours 9 p.m. -8 a.m. All other hours 9 p.m. -8 a.m.
Super-Off-Peak NIA 8 a.m. - 4 p.m. NIA 8 a.m. -4 p.m.
CPP Event 4 p.m. - 9 p.m. 4 p.m. -9 p.m. NIA NIA Period
All-
Daily kWh Electric
Allocation Allocation
18.7 29.1
11.3 13.0
10.6 12.7
12.3 14.3
12.5 17.0
12.6 24.3
12.0 21.3
9.9 18.2
12.6 23.1
(T)
(T)
60 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
6.3.2 Southern California Edison
The following pages provide details on the SCE electricity tariffs applied in this study. Table
describes the baseline territories that were assumed for each climate zone. A net surplus
compensation rate of $ 0.01532/ kWh was applied to any net annual electricity generation
based on a one-year average of the rates between February 2024 and January 2025.
Table 36. SCE Baseline Territory by Climate Zone
Climate Zone
Baseline
Territory
CZ06 6
CZ08 8
CZ09 9
CZ10 10
CZ14 14
CZ15 15
2025/06/09
G.a:lifomia Edison
Rosemead, California (IJ .338-E)
Revised
Cancellling Revised
Scrn,e.dule,,IOJ,Y)
TIIME-OF-USE
DDMESHC
(Continued)
CaL PUC Sheet No.
Cal. PUC Sheet No.
Sheet 2
89278-E
88856-E
Cus,tomers receiving service under tihis Sdhed e wi I lbe ,cfliilrged lhe app icable rates under Option 4-'9 PM,
Option 4!-9 IPMLCPP, Op ion 5-8 PM, Option 5-8, PM-CPP, Option PRIME, Opiion PIRIME-CPP Opti'o:n .A,
Option A-CPP, Oplion B, or Option B-CPP, as listed belO\v. OPP Event Char,ges wlll appGy to all ener,gy
usage durirng CPP Event Einergy Charg~ periods and CPiP Non-Even Ernerg(Y Credils will apply as a
r,educlion on CPP Non-Even Energy Cred'it Periods, during Summer Seasorn days, 4!:00 p.mL to 9·,00 p.m., as
described in Special Corndi ·ans 1 and 3, below:
iA,pQen ◄◄ PY I Qqf;JPIJ ◄=:A PM::Cee
11:1..rQ-,, Ch•ra• -.SJkWh
lvl C'.A.lvl Char,g,a• -s.ik..._, h
1lvUn'"1um C.h.a-"liil• ... -S:ld ■V
C •AlkN'nl• C■m.ac.a C:r■,c:Hs.,,.
C..•Man1I• A11 .. ,,.. •• R .-... ri:ar
ti:Cla.tQ",' Dl■.c:o!I.IDt -'!JI.
Siumm•r :S..•.1111.0r1 -On.-P••k
.... ld.P,a;ak
ON-.P,a;ak
Wlru-.r S.•.11-..an -.... ld-{P•ak
ON-'P••k
SiilupM"-ON-.P••k
Siln.:gl•-Famlly RAl..&ki.Anc.a
Mi.a-111-S:amlty R•..&ldllH'IC.-
!.llnlill• Famlly R..--..&ld,anc.a
MLailll-Famlty R•.&ld-•nc.a
Siillnlill• Famlly R.a-.ald•nc.a
MLJilll-Famlly R..all::l_•nc.a
S:-iun..it,' k.1-.cuic. R:"-•• A• .. ••n.c• D1i&Co.u~u -'%.
~t ,. ~M!:Ctt
C PP 1r;;;._,..nt r;;;,n•rgy Chara• -s.J11.'\!i!iho
!.umm•r CPP IN,an-~ .. an., C.-.dlL
On-P•.ak Gn•rir.-C.-.clll -SJkWrl
o.~!5154 41•
0.!15.~4 tli•
O.!>U?◄ tli•
O.!l:51~-'li tli•
O.!>U?◄ tli•
0.2.G51!l ·Ii·
(O.QD51◄~ (IJ'
0 .91.!tG
0 .914G
0 .'17.Ji
0 .'17.Ji
O.~◄H-'li 4R.
0 .12.D-tlll 4R.
O.Qll,D7G 4R.
0 .172".3? CR •
o .oi;,,0,0,2 CR •
0 .07T7lil CR •
0.111000(1
40.15tHiJ
O.i>OOOQ
O.i>OOOO
O.i>OOOO
O.BOOOQ
0 .00000
0 .00000
' ~ 100% of the di=<:rll ~ m 5h:MTI i11 the ~p~ Special c:-.oo.itioo ct fio SclrmlJle.
Toe I nimlrn C/age is aJ:l:li<3ile, ,.,tr,,,, ihe DeWl!f}' SeM:z! llellergf ~e-. ~ the "FP~ 18'!"" Cllarge,is '"'" !hon ihe-Pdnin:un ~
Toe~ ~inn T""15ifian Onarge CJC el ClQ.ll(l(lf8) I""' kWh is~ i11 the UG COltfDM"1I cf Gene-raibn. iR)
Toe l3=li1o o..dil ~i"" up lb t00%d the Basel'ne A:ICIC!lion,. ,._.a.,., afTmed,I.Jlsa (m, p,,ri::d. Ad<loonal 13ase1;,,.,.~ :owl!' fer
iCusbners ..a~ ~"l' Waler~~ uni!l,r ihis Op&:,n. lt.. Baseline-1111:ic:a'!ii:m; ase sl!fl blh.., Ptelinnsiy ~ Pal1i H.
""Tho t.la:<a-num Availal:il,, a-..dil is h!· oal'f"'d <>:ml asn:,unl far OFIP ~ liJal !""'i""'"~ in cila-mnantl =1"'""' ~ 1 Tclllll ~ T<li.ol M""')" Seni::e ral= ....,. ~ble io Bu:,:lled Ser,;c,,, [X...,.;i I= (DA) and Comiruriily Chcico ~~(CCI, Sernce)
~ l9Cep! DI< ;s,:l CCASemco Cu.lmier.,'""' rd ""bjed ~,. lb, Cl!M<8C 1111'1<!· ""'1:f0"'11t cf lhis Sdte:lulo bllt irnolis,d :,11h<, IJl'ffi8G as
µ,m;do,:l by Scl\ed'ule-DA,ORS a-Schet:l\rji, CCA,CRS.
2 Ge...-..tioo = Tilo Gen"''"" are ,app,:;ablo <JOiy lo Bunt'll!d Serooe C...II:mer.<. See Special Cooatioo bew ~ PCII\ ~-
3 IJ!1'11u;c = ~1 ct Waler R=:uoes IDWR) isne,gy Oretl~ -i<ar m:xe ~ on lho ~ siergy Oeit~ • ..,.. the Billh;J ,Cz,lcuJaoon Sp,,::;ill
Caxl of Lhis Sd'ied'ule.
4 l<ppied on an, o,q.al bmis, I""' ITa.I,dd:l, ,en:i,-,uall)'. See· 1h Sp,,m,11 Condiibns ol lhi• Scl\ed'ulo, ID: n:ui, illimr:ma,.
& Tilo ll.lodfi eo.; A:l'cc:,tjoo ~ledw!i,m (MCl•M! charge-re<XM0:5 1h ""' oos'I ... soa:-=t w 51¢,em ref:ltilily pro:ul!fll51i oo:lered by ihe CP,UC
Iha! SOE b... FflJCUl"d on ~JI ol rusiomeor5 ...ms,, !1"f11"1'."loo ..,..,..,.,. are· J!flMde:I l>,<oertain Ell,ctri:: S.S..:., 1'1-tM:le,s ar Camnu-ily Oooicz,
.ol,;,g~Lcn.
(Tio be insen.ed by u lity)
Advice _5449"-'-'-'-....C-E"-------
Decision
(Con ·mred),
Issued by
Midh...el Backslrom
Viice President
(To be inserted by c..t. PUC)
Date Submitted Dec 30, 2024
Effective a:n 1 , 2025
Resolutiorn -=Ec....c·-5c..c2cc1cc.7 ____ _
61 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
2025/06/09
ern California Edison
Rosemead, California (U 338-E}
Revised
Canoell"ng Revised
Cal. PUC Sheet N:o.
Cal. PUC Sheet N:o.
89282"E
88860-E
RA TES (Continued)
Opiloo PRIME' r OntlQn PBIME.C:PP
Energy °""''11" • ~'M.,L,,rJDay
Summer ~
MCAM ~.,• , $,l<'!M-i
Blllsic Chaif9" • &iMet=ID")'
Scb,ecdule,,IDJJ;O
TIME-Of-USE
D.QMESI &C
(Con ·n,ued}
On,.P=k
Md,Peoik
Off,Peoik
Md 'Peoik
Off,P=k
~r.off,Peoik
Ff\/ t.ll!ler Credii {Seyar.:,t,,ly Me!ered EV Op1icn) • $1M<,L,,ri'Da.y
Ff\/ Sul:,mel,,r Credil O SfMel,,r;Oay
c..'lifarria, Olirrn,;e Credi!'
c..'lifaorm AJtem,;t,, _,, for
Esnergy Ci=Junl • %
F"~mily EJ~dri::; ~l:e As!iistance DisCDUrn'I. • %
Medi<,;,! Line Item Disa,urtt • %
Opllil111 PRIME:.CPP
CPP g,,.,m, E~y Ch"'B" • $\k,Wh
s..nm..-CP.P Non-Event C...,.fi1
Qn.Pealk Eenetrgy C...,.fil , $il<Vl!h
Delivt,ry S,,n,ja,
Taial'
0•.28716 (1)
o,.2a?16 (1)
0•.20039 (1)
0,.29:246 (1)
o,.rs1215 (1)
0•.19-215 (I)
0,.0019!1 (1)
0,.00160 (1)
0.539 (R)
(0.(08)(1)
(0.139)(1)
j56.00} (IR)
100.00"
00.00
100..000
Slleet 6,
11.28317 (R)
0.100n (R)
0.067.28 (R)
11.24759 (R)
ll.05686 (R)
0.05886 (R)
6.1!0000
(0..15170)
(O.J54821) (R)
0.00000
0.00000
0.00000
0.00000
0.00000
0.00000
Reix=rn 1Cl!I% di th<, cisooullt ~3""" "11<,,,,m 011th<, ~" Spociol Candilo, d 11-i• Sd,ed_j..._
The ~119 ~lion Tran,iiioo Charge (CTC) of ($11•.00058) per k!/lh i,o. re<XM<ed in lie UG ~ of Gener•lion. lR)
The Ma>:irru:nA""l.:tie c...:ti • the '-',l'pecl c:red~ ,illtD.A11. fa-Cl?P Cu,;iorn,r.; did palili<i~ 01 .,u,.,,-d'emand "'"i""'<"' -=·
Total =Tdlal Dl,l~Ser,,era1e5,.,,,~.,1o -..:lSernoo, C.<!dkoe .. (OA)~ Camrruil.yCJioioo~SeMCO (OCAs..rro.)
Ou~ e,;u:epl DA and CC\ Se,,,e OJst.cn,ers ""' na: subjed lb the ClM'RllC raile· ~ ct lhi• Schedle bui .,,.,., y lhe DWRBC ...
~~Sched.h,D,lt,.CRSarSchm,loOCA,CRS ..
2 ~a,~ The Gen -,..,, ~c.,bli, rrly ID E!uirllerl SernCll!• ~ See Spociol Can,Hii:m lbelow b PCIA ~-
3 D'l\lREC • D,,partmenl cf Ylouor Remu"""' (l:M'Rl Energy Clredl: -F« ....-e infi:mlOlioo "" lhe Ol'/IR Ernu'f a-..a~ ..,. lhe Bilrg C.tculalioo
Spociol Candilo, d 11-i• --~-
4 ~ed"" :m ""lual • is, pi,r ir>:>u5t!hdd, ~~-See tho Sp<riil Coodlioco, ct 11'15 SdlOO!Je b more iibmaiian.
6 ThelMcdfi C...,Ata:.,ticnModiarni,m(MCMllchargi,re<XM0:5 u,.,.,.1 coo1 .. ~...; •l"'lemreli.ulily pn:a.romsitorderedibyOH,0POC
ihal SOE I=~ on t,,lialf of =iomo,, .-.h,.., ger;,,rJlioo some"" ....,. pro,i:lod 1,y.,,,11an Elt,,::ri:; Sen.i,e -"' ar Camnuiily Choic:z, ·~•=-
(Tio be inserted by u "lity)
Advice _5449"-·'-'· -'---"E'------
Decision
(Con ·mied)
Issued by
Micha.el Bac:blrom
\Ace President
(To be ·nserted by Cal. PUC)
Date Submitted Dec 30,1 2024
Effective J!a:n 1 , 202.5
Resolution E-5217 --------
62 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
2025/06/09
0150
Southern Clillifornia, !Edison Revised Call PUC Sheet No. 892n-E
Rosemead, Califorria (U 338-IE) Canoe! 1'1Q Revised Cal. PUC Sheet No. 88502-E
• • '.ule 0-CAAE Sheet 1
CAUFORN TE RA.TES FOR ENERGY
Sil"IC SERVICE
APPLICABIUTY
Appli.cable to domestic •senooe to Califomia All:emate Ra. es fot" Energy CARE) households residing ,in a
pennanent Sio9e-Fa ily Acoommoda00111 Of" Multifam Acoommodaoon where e ,011Js-tomer meets all
the Special Cood lions of lhis Sd'ledule. customers enroled in the CARE program are not eligible for
the Family Electric Rate Ass.istance FERA) program.
Pur..uant to Special Cond lion 2 luerein, customers rec:eMng service under this Schedule are eligible to
receive the Cal forn"a a1mate Credit as shown in the Rates seotioo below_
TERRITORY
Wrthio the entire territory served.
The applicable diarges set fo " Schedu D shat ~pply 'lo Oustomera served under this Schedule.
CARE Discount
A 32.5 percelilt discou • t is, appl ed to ai CARE Customer's bi poor to the application of the Public U~ili~ies (11)
Commission Re' bu sement Fee (PUCRF) and any .:qiplicable user fees, taxes, and late payment
charges. CAR!E Customers are required lO pay lhe PUORF and any applicable user fees. tax.es, and
late payment charges in ful. addition CARE Customers are exempt from paying, ~he CARE
Surcharge of 0.01435, per 'Wh. lhe Widfire fund on-Bypass.able Charge of $0.0DSQ.5 per Wh, arnd (11)
the Fixed Recovery Charge o 0.00 98, ~ :'Nh.. (II)
(To be inserted by uti ily)
Advice 5449-E Decision ---------
Coil " ued
~edby
ichael BackslrOm
Vice Aresideot
(To be inserted by car. PUG)
Date Subnutted Dec 30. 2024
Effedille Jan 1, 2025
Resolution E.5217 -------
63 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
2025/06/09
64 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
6.3.3 Southern California Gas
Following are the SoCalGas natural gas tariffs applied in this study. Table 37 describes the
baseline territories that were assumed for each climate zone.
Table 37. SoCalGas Baseline Territory by Climate Zone
Climate Zone
Baseline
Territory
CZ05 2
CZ06 1
CZ08 1
CZ09 1
CZ10 1
CZ14 2
CZ15 1
The SoCalGas monthly gas rate in $/therm applied in this analysis is shown in Table 38. The
gas rates were developed based on the latest available gas rate for January 2025 and a
curve to reflect how natural gas prices fluctuate with seasonal supply and demand. The
seasonal curve was estimated from SoCalGas’s monthly residential tariffs between 2015 and 2024. 12-month curves were created from monthly gas rates for each of the ten years. The
ten annual curves were then averaged to arrive at an average normalized annual curve.
Long-term historical natural gas rate data was only available for SoCalGas’ procurement
charges.8 The baseline and excess transmission charges were found to be consistent over
the course of a year and applied for the entire year based on January 2025 rates. The costs
presented in Table 38 were then derived by establishing the baseline and excess rates from
the latest January 2025 tariff as a reference point, and then using the normalized curve to estimate the cost for the remaining months relative to the January rates. CARE tariffs reflect
the 20 percent discount per the GR tariff.
8 The SoCalGas procurement and transmission charges were obtained from the following site:
https://www.socalgas.com/for-your-business/energy-market-services/gas-prices RES2023.xlsx (live.com)
2025/06/09
65 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
Table 38. SoCalGas Monthly Gas Rate ($/therm)
Month Procurement Charge
Transportation Charge Total Charge
Baseline Excess Baseline Excess
January $0.45 $0.98 $1.40 $1.43 $1.85
February $0.31 $0.98 $1.40 $1.29 $1.71
March $0.26 $0.98 $1.40 $1.24 $1.66
April $0.21 $0.98 $1.40 $1.19 $1.62
May $0.22 $0.98 $1.40 $1.20 $1.62
June $0.25 $0.98 $1.40 $1.23 $1.65
July $0.26 $0.98 $1.40 $1.24 $1.66
August $0.29 $0.98 $1.40 $1.27 $1.70
September $0.27 $0.98 $1.40 $1.25 $1.67
October $0.26 $0.98 $1.40 $1.24 $1.66
November $0.29 $0.98 $1.40 $1.27 $1.69
December $0.33 $0.98 $1.40 $1.31 $1.73
6.3.4 San Diego Gas & Electric
Following are the SDG&E electricity and natural gas tariffs applied in this study. Table 39
describes the baseline territories that were assumed for each climate zone. A net surplus
compensation rate of $ 0.01837/ kWh was applied to any net annual electricity generation
based on a one-year average of the rates between February 2024 and January 2025.
Table 39. SDG&E Baseline Territory by Climate Zone
Climate Zone
Baseline
Territory
CZ07 Coastal
CZ10 Inland
CZ14 Mountain
The SDG&E monthly gas rate in $/therm was applied on a monthly basis according to the
rates shown in Table 40. The gas rates were developed based on the latest available gas
rate for January 2025 and a curve to reflect how natural gas prices fluctuate with seasonal
supply and demand. The seasonal curve was estimated from SDG&E’s monthly residential
tariffs between 2015 and 2024. 12-month curves were created from monthly gas rates for
each of the ten years. The ten annual curves were then averaged to arrive at an average
normalized annual curve. The baseline and excess transmission charges were found to be
consistent over the course of a year and applied for the entire year based on January 2025
rates. The costs presented in Table 40 were then derived by establishing the baseline and
excess rates from the latest January 2025 tariff as a reference point, and then using the
normalized curve to estimate the cost for the remaining months relative to the January rates.
CARE tariffs reflect the 20 percent discount per the G-CARE tariff.
2025/06/09
66 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
Table 40. SDG&E Monthly Gas Rate ($/therm)
Month Total Charge
Baseline Excess
January $2.07 $2.36
February $2.01 $2.30
March $1.93 $2.22
April $1.86 $2.16
May $1.88 $2.18
June $1.94 $2.24
July $1.95 $2.25
August $2.02 $2.32
September
October
$1.97 $2.27
$1.94 $2.24
November $1.97 $2.27
December $2.07 $2.37
2025/06/09
S Diego Gas & Eleciric C=pany
s.. Di,gc,, c.mr""raa
RA1ES
Total Ra\e:s:
~;ptl:oo,-TOU DR.11
Summe-_
o.,.p.,..1;
OJI.P.,..k
SuperOll,P,,
Wnte:.
On.P .... 'k
OJl.p...,1;
SuperOf!.P<!~
St.nim58=:ii,.,Adju51menl0t:<lil l.fl b
130% ol 8=:iine-
Wm 811...tir,e AdjU5lmJ!llt 0.-d~ Lf' lo
130% ol 8=:iine-
~mum Bil f$1d'a•l
~;ptl:oo -TOU O:R.11-IIOCTotal
CARiE R.lilii,
S□Jllllllll!'I -CARiE Rates.:
On.P...,k 0.28222
Qll,P...,1; 0.28222
Super 011,P,, 0.28222
WJoter -CARiE Rates:
On.P....'k 0.4143!1
OJI.P...,k 0.41 3!I
Super 011,P,, 0.4143!1
S=met 8;,,s,ili,.,
i,u.,tmenl Coodl up le (0.10543)
130% ol 8=:iiie-
Wm 811...tino AdjU5lmJ!llt
Ci'edlt up iD 13llll'l'. a:r (0.10543)
B ...... Jim,
, ... ,mum Bil ($1d'a•l 0.196
Nma:
Revised Cat f:) .U.C. Sheel t>lo.
Ca111aelin!!I Revised Ce1. f:) .U.C. Sheel t>lo.
SCHEDULIE TOU-DR1
RE:SIDENTIAJL T[ME-OF-USE
DWR8C + IIIOC il'oial 1ta1,; Wl'-INBC EIECC:Ral'<i
0.28222 0.00661 0.41738
ll.28222 ll.~1 ll.1,&792
ll.28222 o.~1 0.0674,1
0.414'.l9 0.00661 0.14115
0.414!.19 ll.00661 0.019.28
ll.414'.!9 0.00661 (1.06133
(0.11l543}
(0.11)543}
0..392
OWR BC•• r o1· EECCfitafo WF' BC Rat;;,
0.00000 0..41136 0.119968
0.00000 0.1819.2 0..47014
0.00000 0.06741 0.34!163
0.00000 0.14115 0Ji5564
0..00000 0..117928 0..49367
0.00000 0..116133 0..47572
(0.10543)
(0.10543)
0.196
62500-E
62360-E
Sheet .2
TOI
R.l,ja,
0.7051!1
o.A7fi7fi
o.:lSS;M
Oli611lS
0.49!128
0.48133
(0.1054-'.l)
(0.1054-'.l)
0.3!12
T.t11ial
IEffi!di,..I!,
~•Rat!!
0.413249 R
0.3llllffl2 R
0.22627 R
0Jl8526 R
0.32350 R
0.31138 R
(ll.01111} I
(ll.01111} l
0.1911
(1) Tcml Ft.I= a:a,m, _,. LDC, SchodLt,, DWF!..SC {Depa-....L cl Wai.-r Re50Ula,,; &o::t Oha-9"~ Sct-etY. Wf'-BC (CA WJifi,.
FLn:t d.sge) and Smeoile EECC ts-i" E=w Ccrnm::11:lly Co,;ij 1es. EECC r.,I= ,., .. "flP""'tl" ta btm::lled a.mcJITlef5. C111ly.
See Special Condli:n 111 r..-Pctll (Per.el-a-El" lril&rence AdJ=enl} """""""Y-
(2) Talal Rat.,,. p-.,.,,.,b,d ,are-for a.is'iomons llal ..,.,,,;,,, ""'""1Cld~y st1pp't/ i3nd do!Msy...,,,.,. rrom itr-
(3) □v.'R.BC "'1d Vi'r•NBC cha~ do ool app:Jr lo CARE ciesl'om..-.._
(4) A,; idettlifo.-d i11 t,,, ,raii,,, • wsl.an>er bi n l ,me .mduode ""' ii,,m sLE1111...-..,c1 MniN czed~s rr. u~" up lo 100% er
basm,e ta fCWD•.:1" 0... rah,, ,ping b..,.,r.is ad'qll:ed by ll=n:tJl.r Bill 1)[ and S.,nab,, Bill 119l>.
(5) WI' BC .-is 0.005111 + DWR,BC Bait! er.mg,, ;,. ll.00000.
2}jf(J
Ad'lice Ur. No. <1582-E
0.24-05-028
Cotrl!lnued
l!ISUl!d by
Dan Skopec
Senior Vice Pre911!1ent
Regulatory Affah
Submitted
Effective
Resolution o.
Jan 1. 2005
67 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
2025/06/09
HB□UllE TOU-OR1
RES ID:ENTIAL TIME-OF-USE
Sheet 5
The minimum bill to recover rnstribulion aoo TRAC cos s is calculated as lhe minim m bill clia:r,g;e of io-4182
per day Ii s the number of days • the bi in,g cyc'le with a 50% discoont applie • or CARE o:r Family E!lectric
Rate Assistance Program (FERA) cusfo rs res ·ng in a miir1imum bill ch.arge of io.201 per day.
Ra e Compooems
The U ify Dislnbution COOi\pany Tof Rates (IJDC Total} shown above a:re comprised o the follolNing
componems (if ,ap ca'ble)c (1) Transmission (Trans) Oharg;es. (2) Disbibwon (Dis r) Charges, (3), Pub c
P rpose Program (PPP) Charges,. (4) Nuclear Decommissioning (MD) Charge. (5) Ong;aing Compehlion
Transiticm Oh arges (CTCI, (6) Locall Generation Charge (LGC). (7) R 1ability SelVices (RS). and f8) the
Total Rate Ad" s me:n Compon.ent (TRAC).
Ousfomers taking seIVice under this .Sched may be• e.ligi • or a California Alternate Rafes for Energy
(CARE) discount on lheir bi , if they· qu ify to receive service under-lne• ams and condi ions of Schedule E.
GARE.. In addition, quali 1ed CARiE cusfomers e e:X!em:p from paying the CARE surch ge o io.o 123-D
Pe:r kWih. Customers t a:re , g le a:nd receive ba CARE and medi:cal baseline wil be given 'the
addition medic b8!5'ellne s atmerit for Ydiich they qualify and wil r,eceive the total e· ective CARE ,
medics baser e discounts idenlilied in Sohed e• E-CARE.
Franchise Fee Differe.n
A. Rranc'hise Fee Diffeirenlial of 5.78/II, will be applied to the manfHly bil gs 'Lllated under this Sdhed' e ar
all ,cusfomers within ihe corporate imils o • lhe Oity of San o· go. Suc'h Franchise Ree Diftereriti stial be so
• d"ICS ed and added as a :separate item to bills rendered to such customers.
Al • e periods li'sted are ,applicable to loc ·me. The de 11r1ifioo ,of lime I be based upon the date service
is reooe.red.
TOU Periods -Weekdays
On-Peak
Off-Peak
Super Off~Pea
Su er O:ff~Pea'k
Seasons: Summe.r
Winter
d
Summer
4::0D 'liYL -9:00 .m.
6,:00 aJm. -4.:00111.m.;
QtOO pum. -midnighi
idnighl -6,:00 aJm.
Summer
4::0D nn. -9:00 .m.
2:00 p1Jm. -4:CIO 111.rm.; •• lill
June 1 -O :ober 31
:ove.m'beir 1 -May 31
W...ier
4·:00 .ra. -9:.00 .m.
6:00 ill. . -4:.00 p.m.
Ex 10:00 a.m. -2:00 p. . i'I March and April; 9:00 ••
Midlii~ -,. ' acme
0:00 ai.,lill.. -2:.00 .m. in Mareh anlil
W...ier
4:00 .ra. -9:00 .m.
2: • I) pJm, •-4:CIO p.m.;
9:00 ht
68 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
2025/06/09
l)».lqi.11,..~]r, nt,,t~l,l(!Cr,_· _,.,,;.,,_. !h~~~EY-'rOV-S-iiihtQM."""111'~ .. ,.ll~
illldW'F-N8C 11,o;UCJC • aJIT1PC)l"lll'bPf.-ad""' MM0111nis~EV--lOU-5nP1 • fnh •lllrilfl>oox.
~)~ ~ t~..tw:i -~...,olht<p~-."'~~[.OA)111~Clw;ict;ll,gg!tgaili;viCOCAJ ~~~1>;1!1'@¥$00,I, •~"--fl'lt T'r;,u,1
fno,v, 0-V-b-anllriKn:hd cullDmll • U0C. F' .C, OV.'R-BC arid ~w Ch.>qt;o lrd WIC4I ~ (PCIAI s-. PCU!. , t.,, ~, hludod babw -Sct!oddlH Dll.al:Sar OCi!r
l;~!o,,-~~ PQIA•
69 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
2025/06/09
HEDULE EV-TOU-5 Sheet 4
COST-BASED DOMESTIC TIME~OF-USE FOR HOUSEHOLDS WITH ELECTRIC VEHIClES
Notes: l"ransrnlssfon !Energy charges in.dude lhe TmnsmiSSion Revenue Balan.olng Account Ad1ustment (TRBAA) of
$(0 00289} per lcWh and the 1iransmlssfon Access Charge Balan.dng Account Adjus1men1 (TACBAA) of $(0.01656} per
kWh. PPP Energy charges includes Low Income PPP mle (LI-PPP) $0.015151kWn, Non-low Income PPP rate (Non-LJ
PPP) So.00031/licWh (pursuant to PU Code Seotion 399.8, the t\lon.U-PPP rate may nol exceed January 1, 2000 leve.ls),
and Cal[fomla Solar Initiative rate (CSI) of $(0.00075)/l(Wh and Self-Genera~on Incentive Program rate (SGIP)
$0.00149Jkl/Yh. 1illle basic service fee of 16 per montlll is applied to a customer's bill and a 50% discount is applied fot
CARE, Medical Baseline, or Family Electric Rate Assislance Program (IFERA) custorriers resulting, in lheir basic sef\lice fees
to be 8 per month.
Rate Components
The Utility Distribution Company Total Rates (UDC Total) shown above are comprised of the following
components (if applicable): (1) Transmission (Trans) Charges, (2} Distribution (Distr) Charges, (3) Public
Purpose Program (PPP) Charges, (4) Nuclear Decommissioning (ND) Charge, (5) Ongoing Competition
Transition Charges (CTC), (6) Local Generation Charge (LGC). (7) Reliability Services (IRS},. and (8) the
Total Rate Adjustment Component (TRAC).
Gertain Direct Access customers are exempt from the TRAC, as defined in Rule 1 -Definitions.
Franchise Fee Differential
A Franchise F,ee Differential of 5. 78% will be applied to the monthly billings calculated under this
schedule for all customers within the corporate limits of the City of San Diego. Such Franchise Fee
Differential shall be so indicated and added as a separate item to bills rendered to such customers.
Time Periods:
All time periods listed are applicable to actual "clock" time)
TOU Period -Weekdays Summer Winter
On•Peak 4:00 p.m. -9:00 p.m. 4:00 p.m. -9:00 p.m.
6:00 a.m. -4:00 p.m.; 6:00 a.m. -4:00 p.m.
Off.Peak Excluding 10:00 a.m.-2:00 p.m.in March and April; 9:00 p.m. -midnight 9:00 p.m. -midnight
Super ~Off-Peak Midnight-6:00 a.m. Midnight -6:00 a.m.
10:00 a.m.. -2:.00 p.m. in March and April
TOU Period -Weekend.s Summer Winier and Holidays
On•Peak 4:00 p.m. -9:00 p.m. 4:00 p.m. -9:00 p.m.
Off-Peak 2:00 p.m. -4:00 p.m .. ; 2:00 p.m. -4:00 p.m.
9:00 p.m. -midnight 9:00 p.m. -midnight
Super .Off.Peak Midnight-2:00 p.m. Midnight -2:00 p.m.
Seasons:
Summer June 1 -October 31
Winter November 1-May 31
70 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
2025/06/09
·• ....,JE
San Diego Gas & Electric Co,npany
San Diego, Califomie
R1wlsed Cal. F'·.U.C. ShHI No.
Cancel 9 RevJsed Cal. F'·.u.c. ShHI No.
SCHEDULE E CARE
CAL IFORNIAALiERNA.TE RATES FOR ENERGY
APPLICABILITY
62755-E
35718~E
Sheet 1
lhis schedule provides a California Alternate Rates for Energy (CARE) disrount to each of the
following types of customers listed below that meet the· requirements for CARE eligibility as defined
in Huie 1, Definitions, and herein, and is taken in conjunction with the customer's otherwise
applicable· service schedule.
1) Customers resi.ding in a permanent single~family accommodation, separately metered by
the Utility.
2) Multi-famcly dwelling units and mobile home parks supplied throug.h one meter on a single
premises where the individual unit is submetered.
3) Non-profit group living facilities.
4) Agri oultura I employee housing facilities.
l ERIRITORY
Within the entire territory served t>y the UHlity.
DISCOUNT
1) Residential! CARE:
Pursuant to D.24-05-028, the applicable GARE discount rate is to be· between 30% and
35%, with the intended CARE discount rate to be 35% for SDG&E, specifically, applied as a
fixed CARE line~item discount.
1H6
In add'ition to the CARE line-item discount, the total effective GARE discount consists of: (a)
exemptions from paying the CARE Surcharge, Department of Water Resources Bond
Charge (DWiR-BC), California Wildfire Fund Charge (WF-NBC), Vehic e-Grid Integration
(VGI) costs, and California Solar Initiative• (CSI) and (t>) a 50% minimum bill relative to N.on
CARE.
Oontlrrued
Issued by Submitted Jan 24. 2025
Advice Ur. No. 4572-E-A Dan1Skopec Effective Jan 1, 2025
Senlo.r Vice F'resldeni
Decision No. D.24-05-028 Regulatory Affairs R.esolutllon No.
T
N
N
71 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
2025/06/09
72 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
6.3.5 City of Palo Alto Utilities
Following are the CPAU electricity and natural gas tariffs applied in this study. The CPAU
monthly gas rate in $/therm was applied on a monthly basis according to the rates shown in
Table 41. The gas rates were developed based on the latest available gas rate for January
2025 and a curve to reflect how natural gas prices fluctuate with seasonal supply and
demand. The seasonal curve was estimated from CPAU’s monthly residential tariffs between
2018 and 2024. 12-month curves were created from monthly gas rates for each of the seven
years. The seven annual curves were then averaged to arrive at an average normalized
annual curve. The baseline and excess transmission charges were found to be consistent
over the course of a year and applied for the entire year based on January 2025 rates. The
costs presented in Table 41 were then derived by establishing the baseline and excess rates
from the latest January 2025 tariff as a reference point and then using the normalized curve
to estimate the cost for the remaining months relative to the January rates. The monthly
service charge applied was $16.93 per month per the January 2025 G-1 tariff.
Table 41. CPAU Monthly Gas Rate ($/therm)
Month G1 Volumetric Total Baseline G1 Volumetric Total Excess
January $1.74 $3.02
February $1.33 $2.53
March $1.24 $2.43
April $1.21 $2.39
May $1.21 $2.39
June $1.23 $2.42
July $1.31 $2.64
August $1.37 $2.71
September $1.36 $2.71
October $1.38 $2.72
November $1.45 $2.80
December $1.57 $2.96
2025/06/09
:Sm.E U L IEIJEC fRH: 'KR IC E
U1"[UTY RATE SCHEIDULE E-1
A. .Pl"U(' . BEUTY:
This Rate Sch dule app!.i to sep rarely m t.ered in ,Je-mil · resi!fen11ial d/ llin -receiving
Electric Se • ice Imm dlle iiy of Palo Alto Utilities.
B. TER:Rn'OR :
C.
Thi rate chedule appli.e everywhe.re the Ci f Palo Alto pro ide.s E.!earic Se • ce.
DLKD· RATES:
Tier I u:sag.e
Tier2u:sage
All}' II age O .er Ti.er I
Customer Chari.,<.e
( monili)
Commodi
0.10-270
0.13240
Di tr1bu1ion
0.0$642,
0.08079
Public Be-ilefits
(UICl549
(UICl549
Tolal
.19461
0.21868
4.64
D·. ~l'IOCI . L OT ··:
l. Cafe11I tio olf Co t Co ponen .
The crual bill. amount i calculated. based on. th.e applicable • te i.n Section C above and
adju ted for any pplkable oliscounl , sureharge and/or ta. e . On a Cu tomer' bill
talem.enl the bill amount may be broken clown into appropriate componenl as ,eaklllated
under Secti.on C.
Cafe11I tio olf oe-Tie
Tier 1 -1.ecttidty usage haM be calrulated and biUed. based. upon. a 1eve4. o,f 15 kWh per
day proratecl b Meter reooing days of S ice. As an example for a 30-<l'ay bill, ihe Tier
I level \¥OUM be 450 Wh. for furd1er discus ion of bill c.alculation and proration, refe-r
to Rule ancl Regul tion 11.
Is ued by the Cil)• Council
Supe.l':!i~ Sl'l8el'Nt, E-1-1
tJatecJ 7-1-WZJ
TmU TIES O CIT YOF
PALO AL.:,T'O
UTILI T-IES
{Entl}
Sheet No E-1-l
Effocti e 7-1-20-24
73 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
2025/06/09
idential Time-of-Day Service
Rate Schedule R-TOD
II. Firm Service Rates
A. Timc'-<lf-D•y (5-S p.m.) Rak
Of't"tliW" id ot ftr«1i~ 1e1 ut £Kttti,rti ut lim-cliw all or fl'l'edi\1:' M ut
Ji■ury l.2tlH Janlbn l.2tH l\bt.\' 1.2124 JiUluar~•J.2025 ll,bt'l.2(1?5
N,., 11n11aer Se~oo (Oc1ober-Ma}'J
S~i lt!1n lntr.tilnltture fiiM'd Ulillle p~r ,_,,. tli pu JffC'.tu $23.50 Pl.IS S24.80 S2S.50
Detlritity lJsW11trU ii.rji.1!
f"e.11lt.$11:IH1 lb.ISO S0.IS90 lb.HOO S0..161f!
OO-Pir.11lt.S/llf-1r S0.1120 SO.II.SI S0.1183 $0.12.U
SuJ1111N!r Sr.uon (Jur,i:, • Sepll-mbcr)
B.
S:i,-s 1e1a lnfntilnl.cture fiud <:lJtrtt! prr l'ND'.n tb pu l'ff.tu $23.50 $24.IS $24.80 S2S.50
Ott1ric.i1yl illl:rCbrji.e
f>c,kS/111~ lb.3219 lb.l:wl $0.3462 $0..lSS?
M.t-l-..k$/llf~ lb.lllfi-l S0.1914 $0.1967 $0.2021
Ofl'f>c,Ull II~ lb.mo SO.llll7 $0.142.S $0.1'164
Optional Critical Peak Pricing Ra tc
1. ThC' CPP Rate base prices per time-of-day pcriod a.re the same as thC" prices per time-of-day period for TOD (S-8 p.m.).
2. The CPP Rate provides :::i discount per kWh on the Mid-Peak nnd Off-Peak prices during summer months.
3. During CPP Events, cu.stomCl"S wi11 be charged for energy used i:it the npplici:ible time--of-di:iy period rate plus I.he CPP
Rate E"·cnt Pric.epcr kWh as shown on www_smud_org...
$26.20
S0..17'-A
S0..1248
$26.20
$0.36$5
$0.1077
$0.1505
4. During CPP E'\-·enls, cne.-gy exported lo the grid will be compensated at the CPP Rate Event Price per kWh as shown on
www_smud.org..
5. The CPP Rate E"·cnt Price and djsco,mt will be updated annually a.I SMUD's discretion and posted on www.smud.org.
C. Plug-In Electric Vehicle Cn.-dil (n l.e cal.L-go.-ics RT02 and RTCl)
This credit is for rcsidentia.l customers who ha~·c a licensed passenger battery electric plug-in or plug-in hybrid electric "·chicle.
Credit applies to alJ clcctricl1y usage charges from midnjg.ht to 6:00 a.m. daily .
Electric Vchjcle Crcdjt . _____ ... ---·--·. _________ _ .... .... .... -$0.0ISO/kWh
Ill. Electrlclty Usage Surcharges
Refer to the following rn.le. schcdu]cs fo.-drtails on these surcharges.
A. H)"dm Genc.-ation Adju!tl.mtni (HCA}. RcfCf" to Rate Scha:luJe HGA.
IV. Rate OpUon Menu
A. Energy A.s!dslanc.e Prog.n11m R:ll'k, Refer to Rate Schedule EAPR.
0. J\tr::dicsl Equipmtnl Di!icOunt P.-ognm. Refer lo Rate Sc.hcdu]e MED.
C. Joint P:uticipation in Medical Equipment Diseouni and E'..nrrgy Allistancr Pragn.rn Rate. R.cfcrlo Rate Schedule
MED.
SACRAMENTO MUNICIPAL UTILITY DISTRICT
Resolution No. 23-09-09 adopted September 21, 2023
Sheet No. R-T00-2
Effective: September 22, 2023
74 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
6.3.6 Sacramento Municipal Utilities District (Electric Only)
Following are the SMUD electricity tariffs applied in this study. The rates effective January
2025 were used.
2025/06/09
. Conditions ,of Service
Peak Wcckclays bclwccn 5:00 p.m. ancl. 8:00 p.m.
... ummu· idl-P~-ak \Vcckcleys bclwccn noon lllld midnight =□cpl clurin • ·lhc
(.!Jun 1 -. i;pt 30) ~,al,: hour.;_
0 I-Peak All other hours. includin£ wce'kc.ml!s lllld holidays 1.
1.1~ ummrr Peak Wcckclays bclwccn 5.:00 p.m. ancl. 8,00 p.m.
(Oct 1 -1.ay3O 0 I-Pea · All other hours, includin£ wce'kcnd!s lllld holidaysl. . -1 Sec Scclmn V. Conc'btLons of Se:rv,oc
75
V
Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
2025/06/09
76 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
6.3.7 Fuel Escalation Assumptions
The average annual escalation rates in Table 42 and Table 43 were used in this study. Table
42 rates are based on assumptions from the CPUC 2021 En Banc hearings on utility costs
through 2030 (California Public Utilities Commission, 2021a). Escalation rates through the
remainder of the 30-year evaluation period are based on the escalation rate assumptions
within the 2022 TDV factors. No data was available to estimate electricity escalation rates for
CPAU and SMUD, therefore electricity escalation rates for PG&E and statewide natural gas
escalation rates were applied. Table 43 rates are based on the escalation rate assumptions
within the 2025 LSC factors from 2026 through 2055.9 These rates were developed for
electricity use statewide (not utility-specific) and assume steep increases in gas rates in the
latter half of the analysis period. Data was not available for the year 2026 and so the CPUC
En Banc assumptions were applied for those years using the average rate across the three
IOUs for statewide electricity escalation.
9https://www.energy.ca.gov/files/2025-energy-code-hourly-factors. (California Energy Commission, 2023). Actual escalation factors were provided by consultants E3.
2025/06/09
77 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
Table 42. Real Utility Rate Escalation Rate Assumptions, CPUC En Banc and 2022 TDV Basis
Statewide Natural
Gas Residential Average Rate (%/year, real)
Electric Residential Average Rate
(%/year, real)
PG&E SCE SDG&E
2026 4.6% 1.8% 1.6% 2.8%
2027 4.6% 1.8% 1.6% 2.8%
2028 4.6% 1.8% 1.6% 2.8%
2029 4.6% 1.8% 1.6% 2.8%
2030 4.6% 1.8% 1.6% 2.8%
2031 2.0% 0.6% 0.6% 0.6%
2032 2.4% 0.6% 0.6% 0.6%
2033 2.1% 0.6% 0.6% 0.6%
2034 1.9% 0.6% 0.6% 0.6%
2035 1.9% 0.6% 0.6% 0.6%
2036 1.8% 0.6% 0.6% 0.6%
2037 1.7% 0.6% 0.6% 0.6%
2038 1.6% 0.6% 0.6% 0.6%
2039 2.1% 0.6% 0.6% 0.6%
2040 1.6% 0.6% 0.6% 0.6%
2041 2.2% 0.6% 0.6% 0.6%
2042 2.2% 0.6% 0.6% 0.6%
2043 2.3% 0.6% 0.6% 0.6%
2044 2.4% 0.6% 0.6% 0.6%
2045 2.5% 0.6% 0.6% 0.6%
2046 1.5% 0.6% 0.6% 0.6%
2047 1.3% 0.6% 0.6% 0.6%
2048 1.6% 0.6% 0.6% 0.6%
2049 1.3% 0.6% 0.6% 0.6%
2050 1.5% 0.6% 0.6% 0.6%
2051 1.8% 0.6% 0.6% 0.6%
2052 1.8% 0.6% 0.6% 0.6%
2053 1.8% 0.6% 0.6% 0.6%
2054 1.8% 0.6% 0.6% 0.6%
2055 1.8% 0.6% 0.6% 0.6%
2025/06/09
78 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
Table 43. Real Utility Rate Escalation Rate Assumptions, 2025 LSC Basis
Year
Statewide Natural Gas Residential Average Rate (%/year, real)
Statewide ElectricityResidential Average Rate (%/year, real)
2026 4.6% 2.1%
2027 4.2% 0.6%
2028 3.2% 1.9%
2029 3.6% 1.6%
2030 6.6% 1.3%
2031 6.7% 1.0%
2032 7.7% 1.2%
2033 8.2% 1.1%
2034 8.2% 1.1%
2035 8.2% 0.9%
2036 8.2% 1.1%
2037 8.2% 1.1%
2038 8.2% 1.0%
2039 8.2% 1.1%
2040 8.2% 1.1%
2041 8.2% 1.1%
2042 8.2% 1.1%
2043 8.2% 1.1%
2044 8.2% 1.1%
2045 8.2% 1.1%
2046 8.2% 1.1%
2047 3.1% 1.1%
2048 -0.5% 1.1%
2049 -0.6% 1.1%
2050 -0.5% 1.1%
2051 -0.6% 1.1%
2052 -0.6% 1.1%
2053 -0.6% 1.1%
2054 -0.6% 1.1%
2055 -0.6% 1.1%
2025/06/09
79 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
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Revision: 1.0
Last modified: 2025/06/09
2025/06/09
Last modified: 2024/04/25
Revision: 1.0
Prepared by:
Ada Shen, Alea German, Rebecca Evans, & Marc Hoeschele, Frontier Energy, Inc
Misti Bruceri, Misti Bruceri & Associates, LLC
Prepared for:
Kelly Cunningham, Codes and Standards Program, Pacific Gas and Electric
-Cost Effectiveness Analysis: Existing Single Family Building UpgradesExecutive Summary 2
Legal Notice
This report was prepared by Pacific Gas and Electric Company and
funded by the California utility customers under the auspices of the
California Public Utilities Commission.
Copyright 2024, Pacific Gas and Electric Company. All rights
reserved, except that this document may be used, copied, and
distributed without modification.
Neither PG&E nor any of its employees makes any warranty,
express or implied; or assumes any legal liability or responsibility for
the accuracy, completeness or usefulness of any data, information,
method, product, policy or process disclosed in this document; or
represents that its use will not infringe any privately-owned rights
including, but not limited to, patents, trademarks or copyrights.
Acronym List
2023 PV$ – Present value costs in 2023
ACH50 – Air Changes per Hour at 50 pascals pressure differential
ACM – Alternative Calculation Method
ADU – Accessory Dwelling Unit
AFUE – Annual Fuel Utilization Efficiency
B/C – Lifecycle Benefit-to-Cost Ratio
BEopt – Building Energy Optimization Tool
BSC – Building Standards Commission
CA IOUs – California Investor-Owned Utilities
CASE – Codes and Standards Enhancement
CBECC-Res – Computer program developed by the California Energy Commission for use in demonstrating compliance with the California Residential Building Energy Efficiency Standards
CEER – Combined Energy Efficiency Rating
CFI – California Flexible Installation
CFM – Cubic Feet per Minute
CO2 – Carbon Dioxide
CPAU – City of Palo Alto Utilities
CPUC – California Public Utilities Commission
CZ – California Climate Zone
DFHP – Dual Fuel Heat Pump
DHW – Domestic Hot Water
DOE – Department of Energy
DWHR – Drain Water Heat Recovery
EDR – Energy Design Rating
EER – Energy Efficiency Ratio
EF – Energy Factor
-Cost Effectiveness Analysis: Existing Single Family Building UpgradesExecutive Summary 3
GHG – Greenhouse Gas
HERS Rater – Home Energy Rating System Rater
HPA – High Performance Attic
HPSH – Heat Pump Space Heater
HPWH – Heat Pump Water Heater
HSPF – Heating Seasonal Performance Factor
HVAC – Heating, Ventilation, and Air Conditioning
IECC – International Energy Conservation Code
IOU – Investor Owned Utility
kBtu –British thermal unit (x1000)
kWh – Kilowatt Hour
LBNL – Lawrence Berkeley National Laboratory
LCC – Life Cycle Cost
LLAHU – Low Leakage Air Handler Unit
VLLDCS – Verified Low Leakage Ducts in Conditioned Space
LSC – Long-term Systemwide Cost
MF – Multifamily
MSHP – Mini-Split Heat Pump
NEEA – Northwest Energy Efficiency Alliance
NEM – Net Energy Metering
NPV – Net Present Value
NREL – National Renewable Energy Laboratory
PG&E – Pacific Gas and Electric Company
POU – Publicly-Owned-Utilities
PV – Photovoltaic
SCE – Southern California Edison
SDG&E – San Diego Gas and Electric
SEER – Seasonal Energy Efficiency Ratio
SF – Single Family
SMUD – Sacramento Municipal Utility District
SoCalGas – Southern California Gas Company
TDV – Time Dependent Valuation
Therm – Unit for quantity of heat that equals 100,000 British thermal units
Title 24 – Title 24, Part 6
TOU – Time-Of-Use
UEF – Uniform Energy Factor
VCHP – Variable Capacity Heat Pump, Title 24 compliance credit
ZNE – Zero-net Energy
-Cost Effectiveness Analysis: Existing Single Family Building UpgradesExecutive Summary 4
Summary of Revisions
Date Description Reference (page or section)
4/25/2024 Original Release N/A
-Cost Effectiveness Analysis: Existing Single Family Building UpgradesExecutive Summary 5
TABLE OF CONTENTS
Executive Summary..........................................................................................................................................................1
1 Introduction................................................................................................................................................................6
2 Methodology and Assumptions...............................................................................................................................7
2.1 Analysis for Reach Codes..................................................................................................................................................... 7 2.1.1 Modeling ....................................................................................................................................................................... 7
2.1.2 Prototype Characteristics.............................................................................................................................................. 7
2.1.3 Cost-Effectiveness Approach...................................................................................................................................... 10
2.1.4 Utility Rates................................................................................................................................................................. 11
2.1.5 Measure Cost Data Collection Approach .................................................................................................................... 12
2.2 Measure Details and Cost................................................................................................................................................... 12 2.2.1 Building Envelope & Duct Measures........................................................................................................................... 13
2.2.2 PV Measures .............................................................................................................................................................. 14
2.2.3 Equipment Fuel Substitution Measures – Heat Pump Equipment............................................................................... 15
3 Results......................................................................................................................................................................21
3.1 Cost-Effectiveness Results ................................................................................................................................................. 22 3.1.1 HPSH Measures ......................................................................................................................................................... 22
3.1.2 HPWH Measures ........................................................................................................................................................ 24
3.2 Climate Zone Case Studies ................................................................................................................................................ 26 3.2.1 HPSH Cost-Effectiveness ........................................................................................................................................... 27
3.2.2 HPWH Cost-Effectiveness .......................................................................................................................................... 28
3.2.3 Envelope & Duct Improvement Cost-Effectiveness..................................................................................................... 29
3.2.4 Sensitivities................................................................................................................................................................. 30
3.3 Gas Pathways for Heat Pump Replacements..................................................................................................................... 31 4 Recommendations and Discussion.......................................................................................................................33
5 References ...............................................................................................................................................................37
6 Appendices ..............................................................................................................................................................38
6.1 Map of California Climate Zones......................................................................................................................................... 38
6.2 Utility Rate Schedules......................................................................................................................................................... 39 6.2.1 Pacific Gas & Electric.................................................................................................................................................. 40
6.2.2 Southern California Edison ......................................................................................................................................... 48
6.2.3 Southern California Gas.............................................................................................................................................. 52
6.2.4 San Diego Gas & Electric............................................................................................................................................ 54
6.2.5 City of Palo Alto Utilities.............................................................................................................................................. 64
6.2.6 Sacramento Municipal Utilities District (Electric Only)................................................................................................. 66
6.2.7 Fuel Escalation Assumptions...................................................................................................................................... 68
-Cost Effectiveness Analysis: Existing Single Family Building UpgradesExecutive Summary 6
LIST OF TABLES
Table 1. Prototype Characteristics........................................................................................................................................................ 8
Table 2. Efficiency Characteristics for Three Vintage Cases ................................................................................................................ 9
Table 3. Measure Cost Assumptions – Efficiency & Duct Measures .................................................................................................. 14
Table 4. Measure Descriptions & Cost Assumptions – PV ................................................................................................................. 15
Table 5. Lifetime Analysis Replacement Assumptions for DFHP (Existing Furnace) Scenario .......................................................... 16
Table 6. System Sizing by Climate Zone ............................................................................................................................................ 17
Table 7. Ducted HVAC Measure Cost Assumptions – 4-Ton Electric Replacements......................................................................... 18
Table 8. Non-Ducted HVAC Measure Cost Assumptions – 4-Ton Electric Replacements ................................................................. 18
Table 9. Water Heating Measure Cost Assumptions – Existing Gas .................................................................................................. 19
Table 10. Water Heating Measure Cost Assumptions – Existing Electric Resistance ........................................................................ 20
Table 11. HPSH CZ 12 [1992-2010]................................................................................................................................................... 27
Table 12. HPSH CZ 16 [1992-2010]................................................................................................................................................... 27
Table 13. HPWH CZ 12 [1992-2010].................................................................................................................................................. 28
Table 14. HPWH CZ 16 [1992-2010].................................................................................................................................................. 28
Table 15. Envelope and Duct Measures CZ 3 [Pre-1978] .................................................................................................................. 29
Table 16. Envelope and Duct Measures CZ 10 [Pre-1978]................................................................................................................. 29
Table 17. Envelope and Duct Measures CZ 12 [Pre-1978]................................................................................................................. 29
Table 18. Sensitivity Analysis Results for On-Bill NPV Cost-Effectiveness in Climate Zone 12, PG&E.............................................. 30
Table 19. Electric Panel Upgrade Sensitivity for CZ 12 [1992-2010] .................................................................................................. 30
Table 20. PG&E Baseline Territory by Climate Zone.......................................................................................................................... 40
Table 21. PG&E Monthly Gas Rate ($/therm)..................................................................................................................................... 40
Table 22: SCE Baseline Territory by Climate Zone ............................................................................................................................ 48
Table 23. SoCalGas Baseline Territory by Climate Zone ................................................................................................................... 52
Table 24. SoCalGas Monthly Gas Rate ($/therm) .............................................................................................................................. 52
Table 25. SDG&E Baseline Territory by Climate Zone ....................................................................................................................... 54
Table 26. SDG&E Monthly Gas Rate ($/therm) .................................................................................................................................. 54
Table 27. CPAU Monthly Gas Rate ($/therm)..................................................................................................................................... 64
Table 28: Real Utility Rate Escalation Rate Assumptions, CPUC En Banc and 2022 TDV Basis ...................................................... 68
Table 29: Real Utility Rate Escalation Rate Assumptions, 2025 LSC Basis ....................................................................................... 69
-Cost Effectiveness Analysis: Existing Single Family Building UpgradesExecutive Summary 7
LIST OF FIGURES
Figure 1: DFHP with Existing Furnace............................................................................................................................................ 22
Figure 2: Standard Efficiency HPSH............................................................................................................................................... 22
Figure 3: High Efficiency HPSH...................................................................................................................................................... 23
Figure 4: Ducted MSHP.................................................................................................................................................................. 23
Figure 5: HPSH + PV...................................................................................................................................................................... 23
Figure 6: 240V Federal Minimum HPWH........................................................................................................................................ 24
Figure 7: 240V Market Standard NEEA HPWH .............................................................................................................................. 24
Figure 8: 120V Market Standard NEEA HPWH .............................................................................................................................. 24
Figure 9: 240V Federal Minimum HPWH + PV............................................................................................................................... 24
Figure 10: R-6 Ducts....................................................................................................................................................................... 26
Figure 11: 10% Duct Leakage ........................................................................................................................................................ 26
Figure 12: R-13 Wall Insulation....................................................................................................................................................... 26
Figure 13: R-49 Attic Insulation....................................................................................................................................................... 26
Figure 14. Heat pump space heater path compared to the air conditioner path. ............................................................................ 32
Figure 15. Heat pump water path compared to gas with solar thermal........................................................................................... 32
Figure 16. Map of California climate zones..................................................................................................................................... 38
-Cost Effectiveness Analysis: Existing Single Family Building Upgrades
Executive Summary
1
Executive Summary
The California Codes and Standards (C&S) Reach Codes program provides technical support to local governments
considering adopting a local ordinance (reach code) intended to support meeting local and/or statewide energy
efficiency and greenhouse gas (GHG) reduction goals. The program facilitates adoption and implementation of the
code when requested by local jurisdictions by providing resources such as cost-effectiveness studies, model language,
sample findings, and other supporting documentation.
This report documents cost-effective measure upgrades in existing single family buildings that exceed the minimum
state requirements. It evaluates efficiency measures such as adding insulation, replacing windows, and duct upgrades,
fuel substitution measures that upgrade space heating and water heating to heat pumps, and solar photovoltaics (PV)
across all 16 California climate zones. A 1,665 square foot single family home prototype with an attached garage was
evaluated in this study.
This analysis used two different metrics to assess the cost-effectiveness of the proposed upgrades. Both
methodologies require estimating and quantifying the incremental costs and energy savings associated with each
energy efficiency measure over a 30-year analysis period. On-Bill cost-effectiveness is a customer-based lifecycle cost
(LCC)approach that values energy based upon estimated site energy usage and customer utility bill savings using
today’s electricity and natural gas utility tariffs. Long-term Systemwide Cost (LSC) is the California Energy
Commission’s LCC methodology for the 2025 Title 24, Part 6 (Title 24) code cycle (previously referred to as Time
Dependent Valuation (TDV)), which is intended to capture the long-term projected cost of energy including costs for
providing energy during peak periods of demand, carbon emissions, grid transmission and distribution impacts. This is
the methodology used by the Energy Commission in evaluating cost-effectiveness for efficiency measures in Title 24
code development.
The following summarizes key results from the study:
Conclusions and Discussion:
1. Envelope measures. Improving envelope performance is very cost-effective in many older homes. In addition
to reducing utility costs, these measures provide many other benefits such as improving occupant comfort and
satisfaction and increasing a home’s ability to maintain temperatures during extreme weather events and
power outages. Below is a discussion of the results of specific measures.
a. Adding attic insulation is cost-effective based on both LSC and On-Bill in many climate zones in homes
with no more than R-19 existing attic insulation levels. Increasing attic insulation from R-30 to R-49
was still found to be cost-effective based on at least one metric in the colder and hotter climates of
Climate Zone 10 (SDG&E territory only) through 16.
b. Insulating existing uninsulated walls is very cost-effective based on both metrics everywhere except
Climate Zones 6 and 7 (in Climate Zone 8 it’s only cost-effective based on LSC).
c. Adding R-19 or R-30 floor insulation is cost-effective based on LSC in the older two vintages (Pre-1978
and 1978-1991) in all CZ except CZ 6-10.
d. Replacing old single pane windows with new high-performance windows has a very high cost and is
typically not done for energy savings alone. However, energy savings are substantial and justify cost-
effectiveness of this measure based on at least one metric in Climate Zones 4, 8 through 12 (PG&E
territory only), and 13 through 16.
e. At time of roof replacement, a cool roof with an aged solar reflectance of 0.25 was found to be cost-
effective in Climate Zones 4, 6 through 12 (PG&E territory only), and 13 through 15. When the roof
deck is replaced during a roof replacement, adding a radiant barrier is low cost and provides
substantial cooling energy savings, and was found to be cost-effective in almost all climate zones and
homes.
2. Duct measures: Many older homes have old, leaky duct systems that should be replaced when they reach the
end of life, typically 20-30 years. In this case, installing new ducts was found to be cost-effective based on at
least one metric (both in most cases) everywhere except mild Climate Zone 7 and Climate Zones 5 and 6 in
California Energy Codes & Standards | A statewide utility program 2024-04-25
-Cost Effectiveness Analysis: Existing Single Family Building Upgrades
Executive Summary
2
the 1978-1991 vintage. If duct systems still have remaining life they should be sealed and tested to meet 10%
leakage or lower; however, duct upgrades alone were only found to be cost-effective for newer homes in
Climate Zones 10 (SDG&E territory only), 11, and 13 through 16. Duct upgrades may be able to be coupled
with other measures to reduce the cost.
3. Heat pump space heating: HPSHs were found to be LSC cost-effective in many cases. The Dual Fuel Heat
Pump (existing furnace) was LSC cost-effective everywhere except Climate Zone 15. The HPSH was LSC
cost-effective everywhere except Climate Zones 8 and 15.
a. Challenges to On-Bill cost-effectiveness include higher first costs and higher first-year utility costs due
to higher electricity tariffs relative to gas tariffs. SMUD and CPAU are two exceptions where first year
utility costs are lower for heat pumps than for gas equipment. Table 11 shows the impact of utility rates
on cost-effectiveness of HPSH where the standard and high efficiency HPSH and the HPSH + PV
measures are cost-effective under SMUD but not PG&E. Even with higher first year utility bills, there
were some cases that still proved On-Bill cost-effective including the DFHP with an existing furnace in
the central valley and northern coastal PG&E territories, the ducted MSHP in the central valley as well
as Climate Zone 14 in SDG&E territory, and the HPSH + PV measure in CZ 3-5 (PGE), 7-11, and 12
(SMUD) – 15.
b. The ductless MSHPs were only found to be cost-effective based on either metric in Climate Zones 1
and 16. Ductless MSHPs have a high incremental cost because it is a more sophisticated system than
the base model of a wall furnace with a window AC unit. However, the ductless MSHP would provide
greater comfort benefits if properly installed to directly condition all habitable spaces (as is required
under the VCHP compliance credit as evaluated in this study) which may be an incentive for a
homeowner to upgrade their system.
c. Higher efficiency equipment lowered utility costs in all cases and improved cost-effectiveness in many
cases, particularly with a ducted MSHP.
4. Heat pump water heating: All the HPWH measures were LSC cost-effective in all climate zones. Most
measures were not On-Bill cost-effective with the exception of the HPWH + PV which was cost-effective On-
Bill in CPAU, SMUD, and SDG&E territories in addition to Climate Zones 11, 13, 14, and 15. The HPWH
measures share many of the same challenges as the HPSH measures to achieving cost-effectiveness
including high first costs and utility rates and assumptions. Table 13 shows the impact of utility rates on cost-
effectiveness where some HPWH measures are cost-effective under SMUD utility rates but are not cost-
effective anywhere under PG&E rates in Climate Zone 12.
a. Various HPWH locations were also explored, however there are some factors outside of cost-
effectiveness that should also be considered.
i. HPWHs in the conditioned space can provide benefits such as free-cooling during the
summer, reduced tank losses, and shorter pipe lengths, and in some cases show improved
cost-effectiveness over garage located HPWHs. However, there are various design
considerations such as noise, comfort concerns, an additional heating load in the winter, and
condensate removal. Ducting the inlet and exhaust air resolves comfort concerns but adds
costs and complexity. Split heat pump water heaters address these concerns, but currently
there are limited products on the market and there is a cost premium relative to the packaged
products.
ii. Since HPWHs extract heat from the air and transfer it to water in the storage tank, they must
have adequate ventilation to operate properly. Otherwise, the space cools down over time,
impacting the HPWH operating efficiency. This is not a problem with garage installations but
needs to be considered for water heaters located in interior or exterior closets. For the 2025
Title 24 code the CEC is proposing that all HPWH installations meet mandatory ventilation
requirements (California Energy Commission, 2023).
5. The contractor surveys revealed overall higher heat pump costs than what has been found in previous
analyses. This could be due to incentive availability raising demand for heat pumps and thereby increasing the
price. This price increase may be temporary and may come down once the market stabilizes. There are also
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-Cost Effectiveness Analysis: Existing Single Family Building Upgrades
Executive Summary
3
new initiatives to obtain current costs including the TECH Clean California program1 that publishes heat pump
data and costs; however, at the time of this analysis, the TECH data did not contain incremental costs because
it only had the heat pump costs but not the gas base case costs.
6. Table 18 shows how CARE rates and escalation rate assumptions will impact cost-effectiveness.
a. Applying CARE rates in the IOU territories has the overall impact to increase utility cost savings for an
all-electric building compared to a code compliant mixed fuel building, improving On-Bill cost-
effectiveness. This is due to the CARE discount on electricity being higher than that on gas. The
reverse occurs with efficiency measures where lower utility rates reduce savings and subsequently
reduce cost-effectiveness.
b. If gas tariffs are assumed to increase substantially over time, in-line with the escalation assumption
from the 2025 LSC development, cost-effectiveness substantially improves for the heat pump
measures over the 30-year analysis period and many cases become cost-effective that were not found
to be cost-effective under the CPUC / 2022 TDV escalation scenario. There is much uncertainty
surrounding future tariff structures as well as escalation values. While it’s clear that gas rates will
increase, how much and how quickly is not known. Future electricity tariff structures are expected to
evolve over time, and the CPUC has an active proceeding to adopt an income-graduated fixed charge
that benefits low-income customers and supports electrification measures for all customers.2 The
CPUC will make a decision in mid-2024 and the new rates are expected to be in place later that year
or in 2025. While the anticipated impact of this rate change is lower volumetric electricity rates, the rate
design is not finalized. While lower volumetric electricity rates provide many benefits, it also will make
building efficiency measures harder to justify as cost-effective due to lower utility bill cost savings.
7. Under NBT, utility cost savings for PV are substantially less than what they were under prior net energy
metering rules (NEM 2.0); however, savings are sufficient to be On-Bill cost-effective in all climate zones
except Climate Zones 1 through 3, 5, and 6.
a. Combining a heat pump with PV allows the additional electricity required by the heat pump to be offset
by the PV system while also increasing on-site utilization of PV generation rather than exporting the
electricity back to the grid at a low rate.
b. While not evaluated in this study, coupling PV with battery systems can be very advantageous under
NBT increasing utility cost savings because of improved on-site utilization of PV generation and fewer
exports to the grid.
Recommendations:
1. There are various approaches for jurisdictions who are interested in reach codes for existing buildings. Some
potential approaches are listed below along with key considerations.
a. Prescriptive measures: Non-preempted measures that are found to be cost-effective may be
prescriptively required in a reach code. One example of this type or ordinance is a cool roof
requirement at time of roof replacement. Another example is requiring specific cost-effective measures
for larger remodels, such as high-performance windows when new windows are installed or duct
sealing and testing when ducts are in an unconditioned space.
b. Replacement equipment: This flavor of reach code sets certain requirements at time of equipment
replacement. This study evaluated space heating and water heating equipment. Where a heat pump
measure was found to be cost-effective based on either LSC or On-Bill, this may serve as the basis of
a reach code given the following considerations.
i. Where reach codes reduce energy usage and are not just fuel switching, cost-effectiveness
calculations are required and must be based on equipment that does not exceed the federal
minimum efficiency requirements.
ii. Where reach codes are established using cost-effectiveness based on LSC, utility bill impacts
and the owner’s first cost should also be reviewed and considered.
1 TECH Public Reporting Home Page (techcleanca.com)
2 https://www.cpuc.ca.gov/industries-and-topics/electrical-energy/electric-costs/demand-response-dr/demand-flexibility-rulemaking
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Executive Summary
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iii. A gas path should also be prescriptively allowed to safely satisfy federal preemption
requirements considering the CRA v. Berkeley case.3 Additional requirements may apply to
the gas path, as described in Section 3.3, as long as the paths are reasonably energy or cost
equivalent.
c. “Flexible Path”, minimum energy savings target: This flexible approach establishes a target for
required energy savings based on a measure or a set of measures that were found to be cost-effective
based on either LSC or On-Bill. A points menu compares various potential upgrades ranging from
efficiency, PV, and fuel substitution measures, based on site or source energy savings. The applicant
must select upgrades that individually or in combination meet the minimum energy savings target. The
maximum target value shown in the Cost-effectiveness Explorer is based on a combination of cost-
effective, non-preempted measures.
2. Equipment replacement ordinances should consider appropriate exceptions for scenarios where it will be
challenging to meet the requirements, such as location of the HPWH, total project cost limitations, or the need
for service panel upgrades that wouldn’t have been required as part of the proposed scope of work in absence
of the reach code.
3. Consider extending relevant proposals made by the CEC for the 2025 Title 24 code (California Energy
Commission, 2023) in ordinances that apply under the 2022 Title 24 code, such as the following:
a. Mandatory ventilation requirements for HPWH installations (Section 110.3(c)7). The cost-effectiveness
analysis can be found in the Multifamily Domestic Hot Water CASE report (Statewide Team, 2023).
b. Requirement for HERS verified refrigerant charge verification for heat pumps in all climate zones
(Table 150.1-A4). The cost-effectiveness analysis can be found in the Residential HVAC Performance
CASE report (Statewide Team, 2023).
4. When evaluating reach code strategies, the Reach Codes Team recommends that jurisdictions consider
combined benefits of energy efficiency alongside electrification. Efficiency and electrification have symbiotic
benefits and are both critical for decarbonization of buildings. As demand on the electric grid is increased
through electrification, efficiency can reduce the negative impacts of additional electricity demand on the grid,
reducing the need for increased generation and storage capacity, as well as the need to upgrade upstream
transmission and distribution equipment.
5. Education and training can play a critical role in ensuring that heat pumps are installed, commissioned, and
controlled properly to mitigate grid impacts and maximize occupant satisfaction. Below are select
recommended strategies.
a. The Quality Residential HVAC Services Program5 is an incentive program to train California
contractors in providing quality installation and maintenance while advancing energy-efficient
technologies in the residential HVAC industry. Jurisdictions can market this to local contractors to
increase the penetration of contractors skilled in heat pump design and installation.
b. Educate residents and contractors of available incentives, tax credits, and financing opportunities.
c. Educate contractors on code requirements. Energy Code Ace provides free tools, training, and
resources to help Californians comply with the energy code. Contractors can access interactive
compliance forms, fact sheets, and live and recorded trainings, among other things, on the website:
https://energycodeace.com/. Jurisdictions can reach out to Energy Code Ace directly to discuss
offerings.
6. Health and safety
a. Combustion Appliance Safety and Indoor Air Quality: Implementation of some of the recommended
measures will affect the pressure balance of the home which can subsequently impact the safe
operation of existing combustion appliances as well as indoor air quality. Buildings with older gas
appliances can present serious health and safety problems which may not be addressed in a remodel
3 https://www.publichealthlawcenter.org/sites/default/files/2024-01/CRA-v-Berkeley-Ninth-Circuit-Opinion-Jan2024.pdf 4 This requirement does not show up in the Express Terms for alterations in Section 150.2(b)1F, but the Statewide Reach Codes Team expects that it will be added to the next release of the proposed code language in the 45-day language as it aligns with the proposal made by the Codes and Standards Enhancement Team (Statewide CASE Team, 2023).
5 https://qualityhvac.frontierenergy.com/
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Executive Summary
5
if the appliances are not being replaced. It is recommended that the building department require
inspection and testing of all combustion appliances located within the pressure boundary of the
building after completion of retrofit work that involves air sealing or insulation measures.
b. Jurisdictions may consider requiring mechanical ventilation in homes where air sealing has been
conducted. In older buildings, outdoor air is typically introduced through leaks in the building envelope.
After air sealing a building, it may be necessary to forcefully bring in fresh outdoor air using supply
and/or exhaust fans to minimize potential issues associated with indoor air quality.
Local jurisdictions may also adopt ordinances that amend different Parts of the California Building Standards Code or
may elect to amend other state or municipal codes. The decision regarding which code to amend will determine the
specific requirements that must be followed for an ordinance to be legally enforceable. For example, reach codes that
amend Part 6 of the CA Building Code and require energy performance beyond state code minimums must
demonstrate the proposed changes are cost-effective and obtain approval from the Energy Commission as well as the
Building Standards Commission (BSC). Amendments to Part 11, such as requirements for increased water efficiency
or electric vehicle infrastructure only require BSC approval. Although a cost-effectiveness study is only required to
amend Part 6 of the CA Building Code, this study provides valuable context for jurisdictions pursuing other ordinance
paths to understand the economic impacts of any policy decision. This study documents the estimated costs, benefits,
energy impacts and greenhouse gas emission reductions that may result from implementing an ordinance based on
the results to help residents, local leadership, and other stakeholders make informed policy decisions.
This report documents the key results and conclusions from the Reach Codes Team analysis. A full dataset of all
results can be downloaded at https://localenergycodes.com/content/resources. Results alongside policy options can
also be explored using the Cost-effectiveness Explorer at https://explorer.localenergycodes.com/. Model ordinance
language and other resources are posted on the C&S Reach Codes Program website at LocalEnergyCodes.com.
Local jurisdictions that are considering adopting an ordinance may contact the program for further technical support at
info@localenergycodes.com.
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Introduction
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1 Introduction
This report documents cost-effective measure upgrades in existing single family buildings that exceed the minimum
state requirements, the 2022 Building Energy Efficiency Standards, effective January 1, 2023. Local jurisdictions in
California may consider adopting local energy ordinances to achieve energy savings beyond what will be accomplished
by enforcing building efficiency requirements that apply statewide. This report was developed in coordination with the
California Statewide Investor-Owned Utilities (IOUs) Codes and Standards Program, key consultants, and engaged
cities—collectively known as the Statewide Reach Codes Team.
The focus of this study is on existing single family buildings and does not apply to low or high-rise multifamily buildings.
Each jurisdiction must establish the appropriate structure and threshold for triggering the proposed requirements.
Some common jurisdictional structures include triggering the requirements at major remodels, additions, or date-certain
(upgrades must be completed by a specific date). Some of these measures could be triggered with a permit for another
specific measure, such as a re-roofing project. The analysis includes scenarios of individual measures and identifies
cost-effective options based on the existing conditions of the building in all 16 California Climate Zones (CZ) (see Cost-
Effectiveness Results for a graphical depiction of climate zone locations).
This report documents the key results and conclusions from the Reach Codes Team analysis. A full dataset of all
results can be downloaded at https://localenergycodes.com/content/resources. Results alongside policy options can
also be explored using the Cost-effectiveness Explorer at https://explorer.localenergycodes.com/.
The California Codes and Standards (C&S) Reach Codes program provides technical support to local governments
considering adopting a local ordinance (reach code) intended to support meeting local and/or statewide energy
efficiency and greenhouse gas reduction goals. The program facilitates adoption and implementation of the code when
requested by local jurisdictions by providing resources such as cost-effectiveness studies, model language, sample
findings, and other supporting documentation.
The California Building Energy Efficiency Standards Title 24, Part 6 (Title 24) (CEC, 2019) is maintained and updated
every three years by two state agencies: the California Energy Commission (the Energy Commission) and the Building
Standards Commission (BSC). In addition to enforcing the code, local jurisdictions have the authority to adopt local
energy efficiency ordinances—or reach codes—that exceed the minimum standards defined by Title 24 (as established
by Public Resources Code Section 25402.1(h)2 and Section 10-106 of the Building Energy Efficiency Standards).
Local jurisdictions must demonstrate that the requirements of the proposed ordinance are cost-effective and do not
result in buildings consuming more energy than is permitted by Title 24. In addition, the jurisdiction must obtain
approval from the Energy Commission and file the ordinance with the BSC for the ordinance to be legally enforceable.
The Department of Energy (DOE) sets minimum efficiency standards for equipment and appliances that are federally
regulated under the National Appliance Energy Conservation Act, including heating, cooling, and water heating
equipment (E-CFR, 2020). Since state and local governments are prohibited from adopting higher minimum efficiencies
than the federal standards require, the focus of this study is to identify and evaluate cost-effective packages that do not
include high efficiency heating, cooling, and water heating equipment. High efficiency appliances are often the easiest
and most affordable measure to increase energy performance. While federal preemption limits reach code mandatory
requirements for covered appliances, in practice, builders may install any package of compliant measures to achieve
the performance requirements.
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-Cost Effectiveness Analysis: Existing Single Family Building Upgrades
Methodology and Assumptions
7
2 Methodology and Assumptions
2.1 Analysis for Reach Codes
This section describes the approach to calculating cost-effectiveness including benefits, costs, metrics, and utility rate
selection.
2.1.1 Modeling
The Reach Codes Team performed energy simulations using the 2025 research version of the Residential California
Building Energy Code Compliance software (CBECC). The 2025 version of CBECC was used instead of the 2022
version to take advantage of updated weather files and metrics. Site energy results are similar between CBECC-Res
2022 and 2025; however, the 2025 compliance metrics applies assumptions reflective of an electrified future, such as
high escalation for natural gas retail rates, which favors electric buildings. In addition, in 2025 the weather stations
were changed in Climate Zones 4 and 6 from San Jose to Paso Robles and Torrance to Los Angeles International
Airport, respectively.
Three unique building vintages are considered: pre-1978, 1978-1991, and 1992-2010. The vintages were defined
based on review of historic Title 24 code requirements and defining periods with distinguishing features. Prospective
energy efficiency measures were identified and modeled to determine the projected site energy (therm and kWh),
source energy, GHG emissions, and LSC (long-term systemwide cost) impacts. Annual utility costs were calculated
using hourly data output from CBECC, and current (as of 11/01/2023) electricity and natural gas tariffs for each of the
investor-owned utilities (IOUs) appropriate for that climate zone.
Equivalent CO2 emission reductions were calculated based on outputs from the CBECC-Res simulation software.
Electricity emissions vary by region and by hour of the year. CBECC-Res applies two distinct hourly profiles, one for
Climate Zones 1 through 5 and 11 through 13 and another for Climate Zones 6 through 10 and 14 through 16. Natural
gas emissions do not vary hourly. To compare the mixed-fuel and all-electric cases side-by-side, GHG emissions are
presented as lbs CO2-equivalent (CO2e) emissions.
The Statewide Reach Codes Team designed the analysis approach and selected measures for evaluation based on
the 2019 existing building single family reach code analysis (Statewide Reach Codes Team, 2021) and work to support
the 2025 Title 24 code development cycle as well as from outreach to architects, builders, and engineers.
2.1.2 Prototype Characteristics
The Energy Commission defines building prototypes which it uses to evaluate the cost-effectiveness of proposed
changes to Title 24 requirements. Average home size has steadily increased over time,6 and the Energy Commission
single family new construction prototypes are larger than many existing single family homes across California. For this
analysis, a 1,665 square foot prototype was evaluated. Table 1 describes the basic characteristics of the single family
prototype. Additions are not evaluated in this analysis as they are already addressed in Section 150.2 of Title 24, Part
6. The CEC has proposed changes to the 2025 Energy Code that would remove the allowance of gas space heating
and water heating equipment for additions and instead require additions to follow the same space heating and water
heating equipment requirements as new construction (California Energy Commission, 2023). The proposed
prescriptive requirements for single family new construction homes are heat pump space heaters and water heaters,
with gas equipment only allowed in the performance approach.
6 https://www.census.gov/const/C25Ann/sftotalmedavgsqft.pdf
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Methodology and Assumptions
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Table 1. Prototype Characteristics
Specification
Existing Conditioned Floor Area 1,665 ft2
Num. of Stories 1
Num. of Bedrooms 3
Window-to-Floor Area Ratio 13%
Attached Garage 2-car garage
Three building vintages were evaluated to determine sensitivity of existing building performance on cost-effectiveness
of upgrades. For example, it is widely recognized that adding attic insulation in an older home with no insulation is cost-
effective, however, newer homes will likely have existing attic insulation reducing the cost-effectiveness of an
incremental addition of insulation. The building characteristics for each vintage were determined based on either
prescriptive requirements from Title 24 that were in effect or standard construction practice during that time period.
Homes built under 2001 Title 24 are subject to prescriptive envelope code requirements very similar to homes built
under the 2005 code cycle, which was in effect until January 1, 2010.
Table 2 summarizes the assumptions for each of the three vintages. Additionally, the analysis assumed the following
features when modeling the prototype buildings. Efficiencies were defined by year of the most recent equipment
replacement based on standard equipment lifetimes.
• Individual space conditioning and water heating systems, one per single family building.
• Split-system air conditioner with natural gas furnace.
o Scenarios with an existing natural gas wall furnace without AC were also evaluated.
• Small storage natural gas water heater.
o Scenarios with an existing electric resistance storage water heater were also evaluated.
• Gas cooktop, oven, and clothes dryer.
The methodology applied in the analyses begins with a design that matches the specifications as described in Table 2
for each of the three vintages. Prospective energy efficiency measures were modeled to determine the projected
energy performance and utility cost impacts relative to the baseline vintage. In some cases, where logical, measures
were packaged together.
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Methodology and Assumptions
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Table 2. Efficiency Characteristics for Three Vintage Cases
Building Component Efficiency
Feature
Vintage Case
Pre-1978 1978-1991 1992-2010
Envelope
Exterior Walls 2x4, 16-inch on center wood frame,
R-0a
2x4 16 inch on center wood frame,
R-11
2x4 16 inch on center wood frame,
R-13
Foundation Type & Insulation Uninsulated slab (CZ 2-15)
Raised floor, R-0 (CZ 1 & 16)
Uninsulated slab (CZ 2-15)
Raised floor, R-0 (CZ 1 & 16)
Uninsulated slab (CZ 2-15)
Raised floor, R-19 (CZ 1 & 16)
Ceiling Insulation & Attic Type
Vented attic, R-5 @ ceiling level for CZ
6 & 7,
Vented attic, R-11 @ ceiling level
(all other CZs)
Vented attic, R-19 @ ceiling level Vented attic, R-30 @ ceiling level
Roofing Material & Color Asphalt shingles, dark
(0.10 reflectance, 0.85 emittance)
Asphalt shingles, dark
(0.10 reflectance, 0.85 emittance)
Asphalt shingles, dark
(0.10 reflectance, 0.85 emittance)
Radiant Barrier No No No
Window Type: U-factor/SHGCb Metal, single pane: 1.16/0.76 Metal, dual pane: 0.79/0.70 Vinyl, dual pane Low-E: 0.55/0.40
House Infiltration at 50 Pascals 15 ACH50 10 ACH50 7 ACH50
HVAC Equipment
Heating Efficiency 78 AFUE (assumes 2 replacements) 78 AFUE (assumes 1 replacement) 78 AFUE
Cooling Efficiency 10 SEER (assumes 2 replacements) 10 SEER (assumes 1 replacement) 13 SEER, 11 EER
Duct Location & Details Attic, R-2.1, 30% leakage at 25 Pa Attic, R-2.1, 25% leakage at 25 Pa Attic, R-4.2, 15% leakage at 25 Pa
Whole Building Mechanical
Ventilation None None None
Water Heating Equipment
Water Heater Efficiency 0.575 Energy Factor (assumes 2
replacements)
0.575 Energy Factor (assumes 1
replacement) 0.575 Energy Factor
Water Heater Type 40-gallon gas storage 40-gallon gas storage 40-gallon gas storage
Pipe Insulation None None None
Hot Water Fixtures Standard, non-low flow Standard, non-low flow Standard, non-low flow
a Pre-1978 wall modeled with R-5 cavity insulation to better align wall system performance with monitored field data and not overestimate energy use.
b Window type selections were made based on conversations with window industry expert, Ken Nittler. If a technology was entering the market during the time period (e.g.,
Low-E during 1992-2010 or dual-pane during 1978-1991) that technology was included in the analysis. This provides a conservative assumption for overall building
performance and additional measures may be cost-effective for buildings with lower performing windows, for example buildings with metal single pane windows in the 1978-
1991 vintage.
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-Cost Effectiveness Analysis: Existing Single Family Building Upgrades 10 Methodology and Assumptions
2.1.3 Cost-Effectiveness Approach
2.1.3.1 Benefits
This analysis used two different metrics to assess the cost-effectiveness of the proposed upgrades. Both
methodologies require estimating and quantifying the incremental costs and energy savings associated
with each energy efficiency measure. The main difference between the methodologies is the way they value energy
impacts (the numerator in the benefit cost calculation):
Utility Bill Impacts (On-Bill): This customer-based lifecycle cost (LCC) approach values energy based upon
estimated site energy usage and customer utility bill savings using the latest electricity and natural gas utility tariffs
available at the time of writing this report. Total savings are estimated over a 30-year duration and include discounting
of future utility costs, as well as assumed energy cost inflation over time.
Long-term Systemwide Cost (LSC): Formerly known as Time Dependent Valuation (TDV) energy cost savings, LSC
reflects the Energy Commission’s current LCC methodology, which is intended to capture the total value or cost of
energy use over 30 years. This method accounts for the hourly cost of marginal generation, transmission and
distribution, fuel, capacity, losses, and cap-and-trade-based CO2 emissions (California Energy Commission, 2023).
This is the methodology used by the Energy Commission in evaluating cost-effectiveness for efficiency measures in the
2025 Energy Code.
2.1.3.2 Costs
The Reach Codes Team assessed the incremental costs of the measures and packages over a 30-year analysis
period. Incremental costs represent the equipment, installation, replacement, and maintenance costs of the proposed
measure relative to the 2022 Title 24 Standards minimum requirements or standard industry practices. Present value of
replacement cost is included only for measures with lifetimes less than the 30-year evaluation period. In cases where
at the end of the analysis period the measure has useful life remaining, the value of this remaining life is calculated and
credited in the total lifetime cost.
2.1.3.3 Metrics
Cost-effectiveness is presented using net present value (NPV) and benefit-to-cost (B/C) ratio metrics.
NPV: Equation 1 demonstrates how lifetime NPV is calculated. If the NPV of a measure or package is positive, it is
considered cost-effective. A negative value represents a net increase in costs over the 30-year lifetime.
B/C Ratio: This is the ratio of the present value of all benefits to the present value of all costs over 30 years (present
value benefits divided by present value costs). A value of one indicates the NPV of the savings over the life of the
measure is equivalent to the NPV of the lifetime incremental cost of that measure. A value greater than one represents
a positive return on investment. The B/C ratio is calculated according to Equation 2.
Equation 1 𝑁𝑁𝑁𝑁𝑁𝑁 = 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝 𝑣𝑣𝑣𝑣𝑣𝑣𝑣𝑣𝑝𝑝 𝑜𝑜𝑜𝑜 𝑣𝑣𝑙𝑙𝑜𝑜𝑝𝑝𝑝𝑝𝑙𝑙𝑙𝑙𝑝𝑝 𝑏𝑏𝑝𝑝𝑝𝑝𝑝𝑝𝑜𝑜𝑙𝑙𝑝𝑝 − 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝 𝑣𝑣𝑣𝑣𝑣𝑣𝑣𝑣𝑝𝑝 𝑜𝑜𝑜𝑜 𝑣𝑣𝑙𝑙𝑜𝑜𝑝𝑝𝑝𝑝𝑙𝑙𝑙𝑙𝑝𝑝 𝑐𝑐𝑜𝑜𝑝𝑝𝑝𝑝
Equation 2 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝 𝑣𝑣𝑣𝑣𝑣𝑣𝑣𝑣𝑝𝑝 𝑜𝑜𝑜𝑜 𝑣𝑣𝑙𝑙𝑜𝑜𝑝𝑝𝑝𝑝𝑙𝑙𝑙𝑙𝑝𝑝 𝑏𝑏𝑝𝑝𝑝𝑝𝑝𝑝𝑜𝑜𝑙𝑙𝑝𝑝 𝐵𝐵𝑝𝑝𝑝𝑝𝑝𝑝𝑜𝑜𝑙𝑙𝑝𝑝 − 𝑝𝑝𝑜𝑜 − 𝐶𝐶𝑜𝑜𝑝𝑝𝑝𝑝 𝑅𝑅𝑣𝑣𝑝𝑝𝑙𝑙𝑜𝑜 = 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝 𝑣𝑣𝑣𝑣𝑣𝑣𝑣𝑣𝑝𝑝 𝑜𝑜𝑜𝑜 𝑣𝑣𝑙𝑙𝑜𝑜𝑝𝑝𝑝𝑝𝑙𝑙𝑙𝑙𝑝𝑝 𝑐𝑐𝑜𝑜𝑝𝑝𝑝𝑝
Improving the efficiency of a project often requires an initial incremental investment. In most cases the benefit is
represented by annual On-Bill utility or LSC savings, and the cost is represented by incremental first cost and future
replacement costs. Some packages result in initial construction cost savings relative to the assumed base case
scenario, and either energy cost savings (positive benefits), or increased energy costs (negative benefits). In cases
where both construction costs and energy-related savings are negative, the construction cost savings are treated as
the ‘benefit’ while the increased energy costs are the ‘cost.’ In cases where a measure or package is cost-
effective immediately (i.e., upfront construction cost savings and lifetime energy cost savings), B/C ratio cost-
effectiveness is represented by “>1”.
California Energy Codes & Standards | A statewide utility program 2024-04-25
.
-Cost Effectiveness Analysis: Existing Single Family Building Upgrades 11 Methodology and Assumptions
The lifetime costs or benefits are calculated according to Equation 3.
Equation 3 (𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐 𝑐𝑐𝑜𝑜 𝑏𝑏𝑏𝑏𝐴𝐴𝑏𝑏𝑏𝑏𝑏𝑏𝑐𝑐)𝑡𝑡 𝐴𝐴 𝑁𝑁𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝 𝑣𝑣𝑣𝑣𝑣𝑣𝑣𝑣𝑝𝑝 𝑜𝑜𝑜𝑜 𝑣𝑣𝑙𝑙𝑜𝑜𝑝𝑝𝑝𝑝𝑙𝑙𝑙𝑙𝑝𝑝 𝑐𝑐𝑜𝑜𝑝𝑝𝑝𝑝 𝑜𝑜𝑝𝑝 𝑏𝑏𝑝𝑝𝑝𝑝𝑝𝑝𝑜𝑜𝑙𝑙𝑝𝑝 = ∑𝑐𝑐=0 (1+𝑜𝑜)𝑡𝑡
Where:
1. n = analysis term in years
2. r = discount rate
The following summarizes the assumptions applied in this analysis to both methodologies.
3. Analysis term of 30 years
4. Real discount rate of three percent
Both base case measures and alternative energy efficiency measures may have different lifetime assumptions which
impact life cycle economics. Future costing of many of the evaluated electrification measures are only based on current
cost assumption, which may be overly conservative as the expected growth in heat pump-based technologies is
growing rapidly and will likely lead to future cost reductions (at least relative to current fossil fueled equipment) as
production volumes increase.
2.1.4 Utility Rates
In coordination with the CA IOU rate team (comprised of representatives from Pacific Gas and Electric (PG&E),
Southern California Edison (SCE) and San Diego Gas and Electric (SDG&E)) and two Publicly-Owned-Utilities (POUs)
(Sacramento Municipal Utility District (SMUD) and City of Palo Alto Utilities (CPAU)), the Reach Codes Team
determined appropriate utility rates for each climate zone to calculate utility costs and determine On-Bill cost-
effectiveness for the proposed measures and packages. The utility tariffs, summarized in Chapter 6.2, were determined
based on the appropriate rate for each case in each territory. Utility rates were applied to each climate zone based on
the predominant IOU serving the population of each zone, with a few climate zones evaluated multiple times under
different utility scenarios. Climate Zones 10 and 14 were evaluated with both SCE for electricity and Southern
California Gas Company (SoCalGas) for gas and SDG&E tariffs for both electricity and gas since each utility has
customers within these climate zones. Climate Zone 5 is evaluated under both PG&E and SoCalGas natural gas rates.
Two POU or municipal utility rates were also evaluated: SMUD in Climate Zone 12 and CPAU in Climate Zone 4.
For cases with onsite generation (i.e. solar photovoltaics (PV)), the approved NBT tariffs were applied along with
monthly service fees and hourly export compensation rates for 2024.7 In December 2022, the California Public Utilities
Commission (CPUC) issued a decision adopting NBT as a successor to NEM 2.0 that went into effect April of 20238
Utility rates are assumed to escalate over time according to the assumptions from the CPUC 2021 En Banc hearings
on utility costs through 2030 (California Public Utilities Commission, 2021a). Escalation rates through the remainder of
the 30-year evaluation period are based on the escalation rate assumptions within the 2022 TDV factors. The
Statewide Natural Gas Residential Average Rate for 2023 through 2030 is projected to be 4.6%. The Electric
Residential Average Rate for PG&E, SCE and SDG&E for 2023 through 2030 is projected to be 1.8%,1.6% and 2.8%
respectively. A second set of escalation rates were also evaluated to demonstrate the impact that utility cost changes
have on cost-effectiveness over time. This utility rate escalation sensitivity analysis, presented in Section 3.2.4, was
based on those used within the 2025 LSC factors (LSC replaces TDV in the 2025 code cycle) which assumed steep
7 Hourly export compensation rates were based on the NBT spreadsheet model created by E3 for the CPUC. https://www.cpuc.ca.gov/-/media/cpuc-website/divisions/energy-division/documents/net-energy-metering-nem/nemrevisit/nbt-model--12142022.xlsb
8 https://www.cpuc.ca.gov/nemrevisit
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-Cost Effectiveness Analysis: Existing Single Family Building Upgrades 12 Methodology and Assumptions
increases in gas rates in the latter half of the analysis period. See Appendix 6.2.7 Fuel Escalation Assumptions for
details.
Future electricity tariff structures are expected to evolve over time, and the CPUC has an active proceeding to adopt an
income-graduated fixed charge that benefits low-income customers and supports electrification measures.10 These
were not included in this analysis but may be evaluated later in 2024 once the rates are finalized.
2.1.5 Measure Cost Data Collection Approach
To support this effort, a detailed cost study was completed in the summer of 2023 to gather data from a range of
contractors to inform actual installed costs in the areas they provide services. These areas include HVAC, plumbing,
envelope and air-sealing, and PV installation. Home performance contractors were also approached to collect this
data. Collecting this type of data is challenging, both due to contractor reticence to share cost information and due to
the timing of the survey which unfortunately coincided with the summer busy season for most contractors, especially
HVAC installers. With these known challenges, the outreach effort focused on leveraging existing relationships
between the analysis team and contractors to both gain access and provide assurance that all cost data would remain
confidential and aggregated. Contractors that provided feedback were nominally compensated for their time.
The collected cost data was intended to represent recent costs for a “typical” retrofit installation. Each home in which a
contractor does work has different site-specific issues that will likely affect costs. In addition, different jurisdictions have
different levels of building department installation oversight and permit fees. Finally, each contractor typically has a
different manufacturer product line they prefer to install. All these factors will influence installed costs11.
The most detailed and broad cost request was for the HVAC contractors, as there are a wide range of equipment
replacement scenarios available for an existing ducted gas furnace with central split-system air conditioning. Options
range from a base case scenario (like for like swap out), split-system heat pump replacement, dual fuel heat pumps
(DFHP), ducted mini-split heat pumps, non-ducted mini-splits, etc. For plumbing contractors, a range of scenarios
existed for water heater replacements including like-for-like replacement, HPWHs (in different locations-garage,
indoor), need for electrical upgrade for HPWH installation, need for HPWH ducting, etc. Envelope measures focused
on attic and wall insulation, window replacement, re-roofing (with Cool Roof materials or not), and attic ceiling plane air-
sealing. PV costing included different system sizes, panel upgrades costs, and battery costs. Home performance
contractors were asked to provide as much data as they could on the different measure options. All costing information
requested was intended to represent most recent installations, in an effort to capture current pricing as best as
possible.
The contractors that responded with their cost estimates work in different regions of the state, operate in different
markets with (potentially) different local efficiency incentives, do varying amounts of work based on the size of their
company, target different market demographic sectors, and install different brands of equipment. All these factors will
contribute to price variability. The Team considered applying climate zone specific cost adjustments to reflect some of
these differences, but ultimately decided not to since a climate zone is not a monolithic entity with uniform customer
pricing throughout. The Team recognizes that “zip code” pricing is a reality, but for simplicity, as well as consistency
with Title 24, Part 6 code development costing approaches, applied uniform statewide costs to all measures.
2.2 Measure Details and Cost
This section describes the details of the measures and documents incremental costs. All measure costs were obtained
from the contractor survey unless otherwise noted. All contractor provided costs reflect the cost to the customer and
10 https://www.cpuc.ca.gov/industries-and-topics/electrical-energy/electric-costs/demand-response-dr/demand-flexibility-rulemaking
11 One HVAC contractor mentioned that equipment brand alone may contribute to a +/-%5 variation in the total bid cost.
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-Cost Effectiveness Analysis: Existing Single Family Building Upgrades 13 Methodology and Assumptions
include equipment, labor, permit fees, and required HERS testing. Additional details of the measures can be found in
Appendix Section Error! Reference source not found..
All measures are evaluated assuming they are not otherwise required by Title 24. For example, duct sealing is required
by code whenever HVAC equipment is altered. For this analysis duct sealing was evaluated for those projects where it
is not already triggered by code (i.e., no changes to the heating or cooling equipment). Where appropriate, measure
requirements align with those defined in Title 24. In some cases, cost-effective measures were identified that exceed
Title 24 requirements, such as attic insulation, cool roofs, and duct sealing.
2.2.1 Building Envelope & Duct Measures
The following are descriptions of each of the efficiency upgrade measures applied in this analysis.
Attic Insulation: Add attic insulation in buildings with vented attic spaces to meet either R-38 or R-49. The pre-1978
vintage assumes an existing condition of R-11, the 1978-1991 vintage assumes an existing condition of R-19, and the
1992-2010 vintage assumes R-30 as the existing insulation level. For pre-1978 vintage homes this measure was also
evaluated to include air sealing of the attic. A 14% leakage reduction was modeled such that 15 ACH50 was reduced
to 12.9 ACH50 in this measure. The costs for this measure include removing existing insulation.
Air Sealing and Weather-stripping: Apply air sealing practices throughout all accessible areas of the building. For
this study, it was assumed that older vintage homes would be leakier than newer buildings and that approximately 30
percent improvement in air leakage is achievable through air sealing of all accessible areas. For modeling purposes, it
was assumed that air sealing can reduce infiltration levels from 15 to ten air changes per hour at 50 Pascals pressure
difference (ACH50) in the oldest vintages (pre-1978), to ten to seven ACH50 for the 1978-1991 vintage, and seven to
five ACH50 in the 1992-2010 vintage.
Cool Roof: For steep slope roofs, install a roofing product rated by the Cool Roof Rating Council (CRRC) with an
aged solar reflectance of 0.20 or 0.25 and thermal emittance of 0.75 or higher. This measure only applies to buildings
that are installing a new roof as part of the scope of the remodel; the cost and energy savings associated with this
upgrade reflects the incremental step between a standard roofing product with one that is CRRC rated with an aged
solar reflectance of 0.20 or 0.25. This is similar to cool roof requirements in 2022 Title 24 Section 150.2(b)1Ii but
assumes a higher solar reflectance.
Radiant Barrier: Add radiant barrier to any existing home vintage. This measure only applies to buildings that are
installing a new roof as part of the scope of the remodel; the cost and energy savings associated with this upgrade
reflects the incremental step between a standard roofing product with one that includes a laminated radiant barrier.
Raised Floor Insulation: In existing homes with raised floors and no insulation (pre-1978 and 1978-1991 vintages),
add R-19 insulation. An upgraded R-30 floor insulation, assuming no current insulation, was evaluated in the pre-1978
and 1978-1991 vintages.
Wall Insulation: Blow-in R-13 wall insulation in existing homes without wall insulation (pre-1978 vintages).
Window Replacement: Replace existing windows with a non-metal dual-pane product, which has a U-factor equal to
0.28 Btu/hour-ft2-°F or lower and a Solar Heat Gain Coefficient (SHGC) equal to 0.23 or lower, except in heating
dominated climates (Climate Zones 1, 3, 5, and 16) where an SHGC of 0.35 was evaluated.
Duct Sealing, New Ducts, and Duct Insulation: Air seal all ductwork to meet the requirements of the 2022 Title 24,
Part 6 Section 150.2(b)1E. For this analysis, final duct leakage values of ten percent (proposed revised leakage rate for
2022 Title 24) was evaluated. The pre-1978 and 1978-1992 vintages assume leaky existing ducts (25-30% leakage).
The 1992-2010 vintage assumes moderately leaky existing ducts (15-20% leakage).
Replacing existing ductwork with entirely new ductwork to meet Sections 150.2(b)1Di and 150.2(b)1Diia of the 2022
Title 24 was also evaluated. This assumed new ducts meet 5% duct leakage and the option of R-6 and R-8 duct
insulation in all climate zones.
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-Cost Effectiveness Analysis: Existing Single Family Building Upgrades 14 Methodology and Assumptions
Table 3 summarizes the cost assumptions for the building envelope and HVAC duct improvement measures evaluated.
All the measures in Table 3 assume a 30-year effective useful life.
Table 3. Measure Cost Assumptions – Efficiency & Duct Measures
Measure Performance Level
Incremental Cost –
Single Family Building
Pre 1978 1978 – 1991 1992 -2010
Wall Insulation R-13 $2,950 N/A N/A
Raised Floor Insulation
R-19 $3,633 $3,633 N/A
R-30 $4,113 $4,113 $4,113
Attic Insulation R-38 $6,762 $2,555 $1,781
R-49 $7,446 $3,612 $1,827
Air Sealing
10 ACH50 $4,684 N/A N/A
7 ACH50 N/A $4,684 N/A
5 ACH50 N/A N/A $4,684
Cool Roof
0.25 Aged Solar Reflectance CZs 1-3,5-7,16 $2,407 $2,407 $2,407
0.25 Aged Solar Reflectance CZs 4, 8-15 $1,203 $1,203 $1,203
Window U-factor/SHGC
0.28 U-factor. 0.23 SHGC in CZs 2,4,6-15. $11,463 $11,463 $11,463
0.28 U-factor. 0.35 SHGC in CZs 1,3,5,26 $11,871 $11,871 $11,871
Radiant Barrier Add Radiant Barrier $893 $893 $893
Duct Sealing 10% nominal airflow $2,590 $2,590 $1,400
All New Duct System
R-6 ducts; 5% duct leakage $4,808 $4,808 $4,808
R-8 ducts; 5% duct leakage $6,311 $6,311 $6,311
2.2.2 PV Measures
Installation of on-site PV is required in the 2022 Title 24 code for new construction homes, but there are no PV
requirements for additions or alterations to existing buildings. PV was evaluated in CBECC-Res according to the
California Flexible Installation (CFI) 1 assumptions and 98% solar access. To meet CFI eligibility, the requirements of
2022 Reference Appendices JA11.2.2 (California Energy Commission, 2021b) must be met. A 3 kW PV system was
modeled both as a standalone measure as well as coupled with heat pump installations.
The costs for installing PV are summarized in Table 4. They include the first cost to purchase and install the system,
future inverter replacement costs, and annual maintenance costs. Upfront solar PV system costs are estimated from
the contractor surveys to be $4.58/WDC and are reduced by 30 percent to account for the federal income Residential
Clean Energy Credit. The solar panels are estimated to have an effective useful life of 30 years and the inverter 25
years. The inverter replacement cost of $7,000 (future value) is also from the contractor surveys. System maintenance
costs are taken from the 2019 PV CASE Report (California Energy Commission, 2017) and are assumed to be
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-Cost Effectiveness Analysis: Existing Single Family Building Upgrades 15 Methodology and Assumptions
$0.31/WDC present value. These costs do not include costs associated with electrical panel upgrades, which will be
necessary in some instances.
Table 4. Measure Descriptions & Cost Assumptions – PV
Measure Performance Level
Incremental Cost
Pre 1978 1978 – 1991 1992 -2010
PV 3 kW $9,608
2.2.3 Equipment Fuel Substitution Measures – Heat Pump Equipment
The fuel substitution measures are evaluated as replacements at the end of the life of the existing equipment. This
means the baseline compared against is usually a like-for-like change-out of the natural gas equipment, and the
upgrade is a heat pump.
For most of the space heating and water heating cases, costs for electrical service panel upgrades are not included as
it is assumed many existing homes have the service capacity to support converting one appliance from gas to electric.
For homes with existing air conditioners, any incremental electric capacity necessary to support a heat pump space
heater is marginal. The same applies for homes with existing electric resistance equipment. Section 3.2.4 presents the
impacts for select cases where an upgrade to the electric panel is required.
Heat Pump Space Heating
All the heat pump space heater (HPSH) measures are described below. All were evaluated with HERS verified
refrigerant charge aligned with the proposed code requirements for the 2025 Title 24 code. Dual fuel heat pumps
(DFHPs) were controlled to lockout furnace operation above 35°F.
DFHP (Existing Furnace): Replace existing ducted air conditioner (AC) with an electric heat pump and install controls
to operate the heat pump to use the existing gas furnace for backup heat. A minimum federal efficiency (14.3 SEER2,
11.7 EER2, 7.5 HSPF2) heat pump was evaluated. Savings are compared to a new AC (14.3 SEER2, 11.7 EER2)
alongside the existing furnace (78 AFUE).
DFHP (New Furnace): Replace existing ducted AC and natural gas furnace with an electric heat pump and new gas
furnace plus controls to operate the heat pump and use the new gas furnace for backup heat. A minimum federal
efficiency (14.3 SEER2, 11.7 EER2, 7.5 HSPF2) heat pump and furnace (80 AFUE) were evaluated to replace existing
equipment. Savings are compared to a new ducted AC and natural gas furnace (14.3 SEER2, 11.7 EER2, 80 AFUE).
Heat Pump Space Heater: Replace existing ducted AC and natural gas furnace with an electric heat pump. Minimum
federal efficiency (14.3 SEER2, 11.7 EER2, 7.5 HSPF2) and higher efficiency (17 SEER2, 12.48 EER2, 9.5 HSPF2)
heat pumps were evaluated. Savings are compared to a new ducted natural gas furnace and AC (14.3 SEER2, 11.7
EER2, 80 AFUE).
Ducted Mini-Split Heat Pump (MSHP): Replace existing ducted AC and natural gas furnace with a ducted high
efficiency MSHP (16.5 SEER2, 12.48 EER2, 9.5 HSPF2). Savings are compared to a new ducted AC and natural gas
furnace (14.3 SEER2, 11.7 EER2, 80 AFUE).
Ductless MSHP: In a home without AC, replace existing wall furnace with a ductless MSHP. A standard efficiency unit
meeting minimum federal efficiency standards (14.3 SEER2, 11.7 EER2, 7.5 HSPF2) was evaluated by modeling the
variable capacity heat pump (VCHP) compliance credit in CBECC-Res. A premium, higher efficiency upgrade was also
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-Cost Effectiveness Analysis: Existing Single Family Building Upgrades 16 Methodology and Assumptions
evaluated using CBECC-Res’ detailed VCHP model12 by simulating the performance of a representative high efficiency
product (14.3 SEER2, 11.7 EER2, 7.5 HSPF2). Savings are compared to a new natural gas wall furnace with fan
distribution (75% AFUE) and window AC (9 CEER).
Over the 30-year analysis period, certain changes are assumed when the equipment is replaced that impact both
lifetime costs and energy use. Table 5 presents the lifetime scenario for the DFHP (existing furnace) measure. The
analysis assumed a 20-year effective useful lifetime (EUL) for a furnace, a 15-year EUL for an air conditioner and a 15-
year EUL for a heat pump. Lifetimes are based on the Database for Energy Efficient Resources (DEER) (California
Public Utilities Commission, 2021b). The existing furnace is assumed to be halfway through its EUL at the beginning of
the analysis period. After 10 years when the furnace reaches the end of its life and needs to be replaced, it will be
subject to new federal efficiency standards for residential gas furnaces that go into effect in 2028 requiring 95 AFUE13.
5 years later the air conditioner reaches the end of its life and is replaced with a new air conditioner.
For the DFHP upgrade case, after 10 years when the furnace fails it’s expected that the furnace will be abandoned in
place since the heat pump serves primary heating and was sized to provide the full design heating load. In this case it
is assumed that the fan motor would be replaced with a new aftermarket unit and would operate another 5 years until
the heat pump fails and is replaced with a new heat pump and air handler.
The other ducted heat pump cases similarly apply a 95 AFUE furnace in the baseline when the furnace reaches its
EUL after 20 years.
Table 5. Lifetime Analysis Replacement Assumptions for DFHP (Existing Furnace) Scenario
Year Baseline Upgrade
0 AC fails, install new AC, keep existing furnace AC fails, install new HP, keep existing furnace
10 Furnace fails, install new 95AFUE furnace Furnace fails, replace fan motor
15 AC fails, install new AC HP fails, install new HP
and air handler
Costs were applied based on the system capacity from heating and cooling load calculations in CBECC-Res as
presented in Table 6. Air conditioner nominal capacity was calculated as the CBECC-Res cooling load, rounded up to
the nearest half ton. Heat pump nominal capacity was calculated as the maximum of either the CBECC-Res heating or
cooling load, rounded up to the nearest half ton. In both cases a minimum capacity of 1.5-ton was applied as this
represents the typical smallest available split system heat pump equipment. Load calculations demonstrated that
Climate Zones 2 -15 were cooling-dominated while Climate Zones 1 and 16 were heating-dominated. In the heating
dominated climate zones the heat pump needed to be upsized relative to an air conditioner that only provides cooling.
12 The detailed VCHP option allows for the user to input detailed specifications based on the published National Energy Efficiency Partnership (NEEP) manufacturer specific performance data. It is not currently available for compliance analysis.
13 https://www.energy.gov/articles/doe-finalizes-energy-efficiency-standards-residential-furnaces-save-americans-15-billion#:~:text=These%20furnace%20efficiency%20standards%20were,heat%20for%20the%20living%20space.
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-Cost Effectiveness Analysis: Existing Single Family Building Upgrades 17 Methodology and Assumptions
Table 6. System Sizing by Climate Zone
Climate
Zone
Air Conditioner
Capacity (tons)
Heat Pump
Capacity (tons)
1 1.5 3.0
2 3.5 3.5
3 2.5 2.5
4 3.5 3.5
5 3.0 3.0
6 3.0 3.0
7 3.0 3.0
8 4.0 4.0
9 4.0 4.0
10 4.0 4.0
11 4.5 4.5
12 4.0 4.0
13 4.5 4.5
14 4.0 4.0
15 5.0 5.0
16 3.5 4.0
Table 7 presents estimated first and lifetime costs for the various ducted baseline and heat pump scenarios for 4-ton
equipment. Costs include all material and installation labor including providing new 240 V electrical service to the air
handler location for all new air handler installations and decommissioning of the furnace for the cases where the
furnace is removed. DFHP costs incorporate controls installation and commissioning to ensure the heat pump and the
furnace communicate properly and don’t operate at the same time. Future replacement costs do not include any initial
costs associated with 240V electrical service or furnace decommissioning.
Table 8 presents estimated first and lifetime costs for the ductless baseline and 2 heat pump scenarios, also for 4-ton
heat pump equipment. EULs are based on 20 years for the gas wall furnace, 10 years for the window AC, and 15 years
for the heat pump.14
14 The gas wall furnace and heat pump EULs were based on DEER (California Public Utilities Commission, 2021b). Gas wall furnace lifetime was assumed to be the same as for central gas furnace equipment. Room air conditioner
EUL was based on the DOE’s latest rulemaking for room air conditioned (Department of Energy, 2023). DOE determined an average lifetime of 9.3 years, which was rounded up to 10 years for this analysis.
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-Cost Effectiveness Analysis: Existing Single Family Building Upgrades 18 Methodology and Assumptions
Table 7. Ducted HVAC Measure Cost Assumptions – 4-Ton Electric Replacements
Case AC + Coil
Gas
Furnace
/AC
DFHP
(Existing
Furnace)
DFHP (New
Furnace)
Min. Eff.
Heat Pump
High Eff.
Heat
Pump
Ducted
MSHP
Base Case --AC + Coil
Gas
Furnace
/AC
Gas
Furnace
/AC
Gas
Furnace
/AC
Gas Furnace /AC
First Cost $10,402 $16,653 $12,362 $20,676 $17,825 $20,802 $18,075
Replacement Cost (Future Value) $19,365 $19,365 $19,025 $19,025 $16,825 $19,802 $18,075
Replacement Cost (Present Value) $13,346 $11,639 $12,334 $12,897 $10,800 $12,710 $11,601
Remaining Value at Year 30 $0 ($1,846) $0 ($1,846) $0 $0 $0
Total Lifecycle
Cost $23,748 $26,446 $24,696 $31,727 $28,625 $33,512 $29,676
Incremental Cost --$948 $5,281 $2,179 $7,066 $3,230
Table 8. Non-Ducted HVAC Measure Cost Assumptions – 4-Ton Electric Replacements
Wall Furnace
+ Window AC
Min. Eff.
Ductless
MSHP
High Eff.
Ductless
MSHP
First Cost $4,075 $17,412 $21,342
Replacement Cost (Future Value) $4,075 $17,412 $21,342
Replacement Cost (Present Value) $3,365 $11,176 $13,698
Remaining Value at Year 30 ($532) $0 $0
Total Lifecycle Cost $6,908 $28,588 $35,040
Incremental Cost -$21,680 $28,132
Heat Pump Water Heating:
The heat pump water heater (HPWH) measures are described below, and costs are presented in Table 9 and Table
10. The most typical scenario in California is a home with existing natural gas storage tank water heaters. However,
there are also many existing homes with existing electric resistance storage tank water heaters and this work considers
both baselines. This analysis evaluates the following 65-gallon replacement HPWHs:
1. HPWH that meets the federal minimum efficiency requirements of UEF 2.0
2. HPWH that meets the Northwest Energy Efficiency Alliance (NEEA)15 Tier 3 rating (3.45 UEF)
3. HPWH that meets the NEEA Tier 4 rating and that has demand response (DR) or load shifting control
capability (4.02 UEF)
4. 120V HPWH that meets the NEEA Tier 3 rating (3.3 UEF).
15 Based on operational challenges experienced in the past, NEEA established rating test criteria to ensure newly installed HPWHs perform adequately, especially in colder climates. The NEEA rating requires an Energy Factor
equal to the ENERGY STAR® performance level and includes requirements regarding noise and prioritizing heat pump use over supplemental electric resistance heating.
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-Cost Effectiveness Analysis: Existing Single Family Building Upgrades 19 Methodology and Assumptions
The four cases above were evaluated with the HPWH located within an attached garage. Additionally, three separate
cases for the federal minimum efficiency HPWH were analyzed to consider the impacts of location on performance and
cost-effectiveness. These locations included the following:
1. Exterior closet.
2. Interior closet, no ducting.
3. Interior closet, ducted to the outside.
Additional costs for providing electrical wiring to these locations and for providing ductwork were included. Savings are
compared to a new 50-gallon natural gas storage water heater (UEF 0.63) or a new 50-gallon electric water heater
(UEF 0.92).
For this analysis, a HPWH that just meets the federal minimum efficiency standards of close to 2.0 Uniform Energy
Factor (UEF) was evaluated in order to satisfy preemption requirements. However, the Reach Codes Team is not
aware of any 2.0 UEF products that are available on the market. The lowest UEF reported for certified products in the
Northwest Energy Efficiency Alliance (NEEA)16 database is 2.73. In fact, of the four certification tiers offered by NEEA
for high efficiency HPWHs, those meeting Tier 3 or Tier 4 are the dominant products on the market today. According to
NEEA all major HPWH manufacturers are represented in NEEA’s qualified product list17 and there are fewer than 10
integrated products certified as Tier 1 or Tier 2, all of which have UEFs greater than 3.0.18 Therefore, in this analysis,
we refer to the NEEA rated HPWH as the “market standard” HPWH.
The HPWH costs for the 120V and NEEA certified units are based on a larger (60 or 65 gallon) HPWH, as most
contractors are upsizing the HPWH tank size relative to an equal volume, but higher capacity gas storage water heater.
Costs include all material and installation labor including providing a new 240 V electrical service to the water heater
location (not needed for the 120V product). Water heating equipment lifetimes are based on DOE’s recent water heater
rulemaking (Department of Energy, 2022) and assume 15-year EULs for both the baseline water heaters and the
HPWHs.19 Future replacement costs for 240V HPWHs do not include any initial costs associated with 240V electrical
service, condensate disposal, etc.
Table 9. Water Heating Measure Cost Assumptions – Existing Gas
Gas
Storage
Water
Heater
240V
Fed.
Min.
HPWH
240V
Market
Std. NEEA
HPWH
240V
Market
Std. NEEA
HPWH +
DR
120V
Market
Std. NEEA
HPWH
240V Fed.
Min.
HPWH,
Exterior
Closet
240V Fed.
Min. HPWH,
Interior
Closet, Not
Ducted
240V Fed.
Min. HPWH,
Interior
Closet,
Ducted
First Cost $2,951 $7,283 $8,144 $8,144 $5,844 $7,702 $7,363 $8,442
Replacement Cost
(Future Value) $2,951 $6,413 $7,274 $7,274 $5,101 $6,413 $6,413 $6,413
Replacement Cost (Present Value) $1,894 $4,116 $4,669 $4,669 $3,274 $4,116 $4,116 $4,116
Total Lifecycle Cost $4,845 $11,399 $12,813 $12,813 $9,118 $11,818 $11,479 $12,558
Incremental Cost -$6,554 $7,968 $7,968 $4,273 $6,973 $6,634 $7,713
16 Based on operational challenges experienced in the past, NEEA established rating test criteria to ensure newly installed HPWHs perform adequately, especially in colder climates. The NEEA rating requires products comply with ENERGY STAR and includes requirements regarding noise and prioritizing heat pump use over supplemental electric resistance heating. 17 https://neea.org/success-stories/heat-pump-water-heaters
18 As of 12/21/23: https://neea.org/img/documents/residential-unitary-HPWH-qualified-products-list.pdf
19 The recent DOE rulemaking references a lifetime of 14 years for gas storage water heaters and 14.8 years for electric storage water heaters. 15 years for each was used in this analysis for both types for simplification.
California Energy Codes & Standards | A statewide utility program 2024-04-25
-Cost Effectiveness Analysis: Existing Single Family Building Upgrades 20 Methodology and Assumptions
Table 10 presents similar costs to Table 9, except that the costs assume replacement of an existing 50-gallon electric
storage water heater and does not include the 240 V electrical service cost.
Table 10. Water Heating Measure Cost Assumptions – Existing Electric Resistance
Electric
Storage
Water
Heater
240V
Fed. Min.
HPWH
240V
Market
Std. NEEA
HPWH
240V
Market
Std. NEEA
HPWH +
DR
120V
Market
Std. NEEA
HPWH
240V Fed.
Min.
HPWH,
Exterior
Closet
240V Fed.
Min. HPWH,
Interior
Closet, Not
Ducted
240V Fed.
Min. HPWH,
Interior
Closet,
Ducted
First Cost $2,583 $6,413 $7,274 $7,274 $5,101 $6,413 $6,413 $7,492 Replacement Cost (Future Value) $2,583 $6,413 $7,274 $7,274 $5,101 $6,413 $6,413 $6,413
Replacement Cost (Present Value) $1,658 $4,116 $4,669 $4,669 $3,274 $4,116 $4,116 $4,116
Total Lifecycle Cost $4,241 $10,529 $11,943 $11,943 $8,375 $10,529 $10,529 $11,608
Incremental Cost -$6,288 $7,702 $7,702 $4,134 $6,288 $6,288 $7,367
California Energy Codes & Standards | A statewide utility program 2024-04-25
-Cost Effectiveness Analysis: Existing Single Family Building Upgrades 21 Results
3 Results
The primary objective of the evaluation is to identify cost-effective energy upgrade measures and packages for existing
single family buildings, to support the design of local ordinances requiring upgrades, which may be triggered by
different events, such as at the time of a significant remodel or at burnout of mechanical equipment. In this report, the
1992-2010 vintage is shown for the equipment measures because it is the most conservative case (lowest loads), while
the pre-1978 vintage is shown for the envelope and duct measures because some of those measures only apply to the
pre-1978 vintage. A full dataset of all results can be downloaded at https://localenergycodes.com/content/resources.
Results alongside policy options can also be explored using the Cost-effectiveness Explorer at
https://explorer.localenergycodes.com/.
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3.1 Cost-Effectiveness Results
The extensive analysis for this type of report leads to an overwhelming number of scenarios including different base
cases, house vintages, replacement options, and climate zones. To simplify the reporting, the Statewide Reach Codes
Team has relied on graphical representation of select key cases indicating high level measure cost effectiveness from
either an On-Bill perspective, an LSC perspective, both metrics, or neither. Figure 1 through Figure 13 present this
reduced set of results of the LSC and On-Bill cost-effectiveness conclusions across the 16 climate zones. In the cases
where there are multiple utilities serving a single climate zone, an asterisk “*” label is added to separately show the
alternate utility cases. These graphs provide a general sense of the findings. A full dataset of all results can be
downloaded at https://localenergycodes.com/content/resources. Results alongside policy options can also be explored
using the Cost-effectiveness Explorer at https://explorer.localenergycodes.com/.
3.1.1 HPSH Measures
Figure 1 through Figure 5 show the cost-effectiveness of space heating equipment replacement measures for the
1992-2010 vintage including the following cases. The 1992-2010 vintage results are presented here as this is the most
conservative scenario for HPSH measures. In general, where a HPSH measure is cost-effective for a new home it was
also found to be cost-effective for older homes.
• Dual fuel heat pump with existing furnace as backup.
• Standard efficiency ducted central heat pump replacement.
• High efficiency ducted central heat pump replacement.
• Ducted mini-split heat pump replacement.
• Standard efficiency ducted central heat pump replacement with 3kW PV system.
Figure 1: DFHP with Existing Furnace Figure 2: Standard Efficiency HPSH
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Figure 3: High Efficiency HPSH Figure 4: Ducted MSHP
Figure 5: HPSH + PV
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3.1.2 HPWH Measures
Figure 6 through Table 11 show the cost-effectiveness of water heater measures for the 1992-2010 vintage including
the following cases. HPWH energy savings and LSC cost-effectiveness is not sensitive to home vintage but rather
depends on the magnitude of hot water loads, which are typically driven by the number of occupants. On-Bill cost-
effectiveness does vary slightly by vintage due to the impact of the electrification tariff relative to the load profile of the
existing home. The impact is largest for the HPWH + PV case where On-Bill cost-effectiveness improves for older
homes or homes with overall higher energy use resulting in less exports to the grid for a fixed size PV system.
• 240V federal minimum HPWH
• 240V market standard NEEA HPWH
• 120V market standard NEEA HPWH
• 240V federal minimum HPWH with 3kW PV
Figure 6: 240V Federal Minimum HPWH Figure 7: 240V Market Standard NEEA HPWH
Figure 8: 120V Market Standard NEEA HPWH Figure 9: 240V Federal Minimum HPWH + PV
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• Envelope and Duct Measures
Figure 10 through Figure 13 show the cost-effectiveness results of envelope and duct measures for the pre-1978
vintage including the following measures. The pre-1978 vintage is presented as representing the most favorable
existing conditions for cost-effective upgrades. Newer homes with higher performing envelope may still benefit from
these types of upgrade measures, but cost-effectiveness is reduced. Some measures, like R-13 wall insulation, aren’t
applicable to newer homes which would have been constructed originally with insulated walls.
• New R-6 ducts
• 10% duct leakage
• R-13 wall insulation
• R-49 attic insulation
California Energy Codes & Standards | A statewide utility program 2024-04-25
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Figure 10: R-6 Ducts
Figure 11: 10% Duct Leakage
Figure 12: R-13 Wall Insulation Figure 13: R-49 Attic Insulation
3.2 Climate Zone Case Studies
To better understand the details of the results, a few climate zones were selected to provide a more detailed
presentation of cost-effectiveness results. Section 3.2.1 through 3.2.3 show the first-year incremental cost, first-year
utility savings, and NPV for a variety of cases. Section 3.2.4 shows the sensitivity of the cost effectiveness results due
to varying utility escalation rates, the impact of CARE rates, future equipment cost assumptions, and the need for
electrical panel upgrades. The climate zones were selected to be representative of areas of significant reach code
activity. Please refer to the Cost-Effectiveness Explorer (Statewide Reach Codes, 2023) or the source dataset for the
full analysis.
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3.2.1 HPSH Cost-Effectiveness
Cost-effectiveness of heat pump space heating measures for Climate Zones 12 and 16 is summarized in Table 11 and
Table 12 below. In Climate Zone 12, HPSH measures are cost-effective based on LSC in all cases except the ductless
MSHP cases and are cost-effective On-Bill with SMUD rates in all cases except the DFHP case with a new furnace
and the ductless MSHP cases. These measures are cost-effective On-Bill with PGE for the DFHP with an existing
furnace and ducted MSHP measures. Climate Zone 16 provides an example of HPSH cost-effectiveness in a cold
climate where almost all HPSH measures are cost effective based on LSC but not cost-effective On-Bill.
Table 11. HPSH CZ 12 [1992-2010]
Measure First Incremental Cost
2025 LSC NPV
PGE SMUD
First-yearUtilitySavings
On-Bill NPV
First-yearUtilitySavings
On-Bill NPV
DFHP Existing Furnace $1,960 $7,093 ($19) $1,633 $247 $7,693
DFHP New Furnace $4,023 $3,915 ($34) ($3,134) $234 $2,979 HPSH (Std Efficiency) $1,172 $6,990 ($147) ($2,151) $246 $6,812
HPSH (High Efficiency) $4,149 $5,366 $13 ($3,368) $300 $3,160
Ducted MSHP $1,421 $9,136 $10 $378 $298 $6,951
Ductless MSHP (Std Efficiency) $13,336 ($9,175) $30 ($18,039) $276 ($12,428)
Ductless MSHP (High Efficiency) $17,266 ($6,753) $409 ($15,853) $423 ($15,532)
HPSH + PV $10,780 $5,289 $452 ($59) $885 $9,821
Table 12. HPSH CZ 16 [1992-2010]
Measure First Incremental Cost
2025 LSC NPV
PGE
First-yearUtility Savings On-Bill NPV
DFHP Existing Furnace $2,397 $7,289 ($116) ($1,891)
DFHP New Furnace $4,757 $2,457 ($133) ($6,322)
HPSH (Std Efficiency) $2,725 $11,142 ($480) ($8,532)
HPSH (High Efficiency) $5,701 $12,099 ($204) ($7,125) Ducted MSHP $2,155 $16,554 ($221) ($2,853)
Ductless MSHP (Std Efficiency) $13,336 ($134) ($170) ($19,742)
Ductless MSHP (High Efficiency) $17,266 $9,397 $539 ($10,031)
HPSH + PV $12,333 $10,640 $316 ($1,949)
California Energy Codes & Standards | A statewide utility program 2024-04-25
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3.2.2 HPWH Cost-Effectiveness
Cost-effectiveness of heat pump water heating measures for Climate Zones 12 and 16 is summarized in Table 13 and
Table 14 below. This sensitivity study looks at a wider range of HPWH tank locations and whether or not the unit has
ducting for supply and exhaust air. All the HPWH measures in Climate Zones 12 and 16 are cost effective based on
LSC.
Table 13. HPWH CZ 12 [1992-2010]
Measure First Incremental Cost
2025 LSC NPV
PGE SMUD First-Year Utility
Savings
On-Bill NPV
First-Year Utility
Savings
On-Bill NPV
240V Fed. Min. HPWH $4,332 $3,536 ($213) ($8,738) $191 $477
240V Market Std. NEEA HPWH $5,193 $4,304 ($82) ($7,164) $230 ($56)
240V Market Std. NEEA HPWH + DR $5,193 $5,536 ($21) ($5,773) $248 $362
120V Market Std. NEEA
HPWH $2,893 $9,730 ($2) ($1,651) $254 $4,203
240V Fed. Min. HPWH (Exterior Closet) $4,751 $2,834 ($224) ($9,431) $186 ($78)
240V Fed. Min. HPWH (Interior Closet) $4,413 $3,123 ($71) ($6,138) $188 ($235)
240V Fed. Min. HPWH (Interior Closet, ducted) $5,492 $3,359 ($202) ($9,505) $205 ($231)
240V Fed. Min. HPWH + PV $13,940 $3,567 $577 ($2,300) $831 $3,486
Table 14. HPWH CZ 16 [1992-2010]
Measure First Incremental Cost
2025 LSC NPV
PGE
First-Year Utility Savings On-Bill NPV
240V Fed. Min. HPWH $4,332 $4,186 ($250) ($9,307)
240V Market Std. NEEA HPWH $5,193 $4,088 ($160) ($8,652)
240V Market Std. NEEA HPWH + DR $5,193 $5,653 ($79) ($6,804
120V Market Std. NEEA HPWH $2,893 $10,646 ($13) ($1,602)
240V Fed. Min. HPWH (Exterior Closet) $4,751 $3,317 ($268) ($10,154)
240V Fed. Min. HPWH (Interior Closet) $4,413 $5,004 ($18) ($4,690)
240V Fed. Min. HPWH (Interior Closet, ducted) $5,492 $4,857 ($202) ($9,174)
240V Fed. Min. HPWH + PV $13,940 $5,049 $620 ($1,043)
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3.2.3 Envelope & Duct Improvement Cost-Effectiveness
Cost-effectiveness of envelope and duct measures for Climate Zones 3, 10, and 12 is summarized in Table 15 through
Table 17.
Table 15. Envelope and Duct Measures CZ 3 [Pre-1978]
Measure
First
Incremental Cost
2025 LSC NPV
PG&E
First-year UtilitySavings On-Bill NPV
R-6 Ducts $4,808 $2,851 $188 $463 R-8 Ducts $6,311 $1,747 $198 ($776)
10% Duct Sealing $2,590 $1,956 $104 $397
R-13 Wall Insulation $2,950 $3,476 $144 $1,221
R-38 Attic Insulation $6,762 ($1,567) $127 ($3,178)
R-49 Attic Insulation $7,446 ($1,768) $139 ($3,520)
R-30 Raised Floor Insulation $4,113 $9,008 $224 $2,975
Cool Roof (0.20 Ref) $893 ($2,419) ($18) ($1,811)
Table 16. Envelope and Duct Measures CZ 10 [Pre-1978]
Measure First Incremental Cost
2025 LSC NPV
SCE/SCG SDGE
First-yearUtilitySavings
On-Bill NPV
First-yearUtilitySavings
On-Bill NPV
R-6 Ducts $4,808 $7,463 $783 $13,168 $1,100 $22,155
R-8 Ducts $6,311 $6,326 $800 $12,076 $1,125 $21,268
10% Duct Sealing $2,590 $3,438 $370 $5,969 $518 $10,166
R-13 Wall Insulation $2,950 $1,795 $179 $1,476 $250 $3,494
R-38 Attic Insulation $6,762 $664 $416 $2,951 $582 $7,654
R-49 Attic Insulation $7,446 $796 $467 $3,435 $655 $8.756
R-30 Raised Floor Insulation $4,113 ($999) ($29) ($4,235) ($46) ($4,687)
Cool Roof (0.20 Ref) $893 $428 $174 $2,647 $246 $4,656
Table 17. Envelope and Duct Measures CZ 12 [Pre-1978]
Measure First Incremental Cost
2025 LSC NPV
PG&E SMUD
First-yearUtilitySavings
On-Bill NPV
First-yearUtilitySavings
On-Bill NPV
R-6 Ducts $4,808 $11,609 $804 $14,727 $413 $5,816
R-8 Ducts $6,311 $10,722 $828 $13,849 $427 $4,711
10% Duct Sealing $2,590 $6,418 $397 $7,280 $222 $3,281
R-13 Wall Insulation $2,950 $5,774 $262 $4,054 $187 $2,342
R-38 Attic Insulation $6,762 $3,727 $499 $5,461 $261 $19
R-49 Attic Insulation $7,446 $4,092 $552 $6,063 $288 $33
R-30 Raised Floor Insulation $4,113 $5,245 $27 ($1,176) $156 $1,175
Cool Roof (0.20 Ref) $893 ($354) $154 $2,123 $44 ($386)
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3.2.4 Sensitivities
Table 18 shows the On-Bill NPV results of Climate Zone 12 with PG&E utility rates and the impacts of escalation rates, and CARE rates. The “Standard Results”
in Table 18 assumes the escalation rates used in the analysis presented elsewhere in this report. Table 19 shows the impact of electrical panel upgrades. The
“Standard Results” in Table 19 does not assume a panel upgrade is required.
Table 18. Sensitivity Analysis Results for On-Bill NPV Cost-Effectiveness in Climate Zone 12, PG&E
Measure Vintage Standard Results 2025 LSC Escalation CARE
DFHP Existing Furnace 1992-2010 $1,063 $8,443 $1,884
DFHP New Furnace 1992-2010 ($6,770) $383 ($5,846)
HPSH (Std Efficiency) 1992-2010 ($2,151) $6,011 ($220)
HPSH (High Efficiency) 1992-2010 ($3,368) $4,987 ($2,721)
Ducted MSHP 1992-2010 $378 $8,729 $1,057
Ductless MSHP (Std Efficiency) 1992-2010 ($18,039) ($10,732) ($17,623)
Ductless MSHP (High Efficiency) 1992-2010 ($15,853) ($8,091) ($18,460)
HPSH + PV 1992-2010 ($59) $8,822 ($1,255)
240V Fed. Min. HPWH 1992-2010 ($8,738) ($2,433) ($6,448)
240V Market Std. NEEA HPWH 1992-2010 ($7,164) ($694) ($5,918)
240V Market Std. NEEA HPWH + DR 1992-2010 ($5,773) $770 (5,014)
120V Market Std. NEEA HPWH 1992-2010 ($1,651) $4,930 (1,038)
240V Fed. Min. HPWH (Exterior Closet) 1992-2010 ($9,431) ($3,184) ($7,055)
240V Fed. Min. HPWH (Interior Closet) 1992-2010 ($6,138) ($1,000) ($5,098)
240V Fed. Min. HPWH (Interior Closet, ducted) 1992-2010 ($9,505) ($2,836) ($7,271)
240V Fed. Min. HPWH + PV 1992-2010 ($2,300) $4,952 ($4,858)
R-6 Ducts Pre-1978 $14,727 $18,685 $8,592
R-8 Ducts Pre-1978 $13,849 $17,990 $7,532
10% Duct Sealing Pre-1978 $7,280 $9,752 $4,294
R-13 Wall Insulation Pre-1978 $4,054 $6,898 $2,196
R-38 Attic Insulation Pre-1978 $5,461 $8,126 $1,668
R-49 Attic Insulation Pre-1978 $6,063 $8,978 $1,864
R-30 Raised Floor Insulation Pre-1978 ($1,776) $2,468 ($1,602)
Cool Roof (0.20 Ref) Pre-1978 $2,123 $1,848 $851
Table 19. Electric Panel Upgrade Sensitivity for CZ 12 [1992-2010]
Measure Standard Results Electric Panel Upgrade
On-Bill NPV LSC NPV On-Bill NPV LSC NPV
HPSH (Std Efficiency) ($2,151) $6,990 ($4,931) $4,210
240V Fed. Min. HPWH ($8,738) $3,536 ($11,624) $756
California Energy Codes & Standards | A statewide utility program 2024-04-25
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3.3 Gas Pathways for Heat Pump Replacements
Many jurisdictions are exploring policy options to accelerate the decarbonization of existing homes. A recent Ninth
Circuit Court ruling in California Rest. Ass'n v. City of Berkeley20 invalidated Berkeley’s ordinance banning the
installation of gas infrastructure in new construction. The ruling stated that the ordinance effectively banned covered
products and was preempted by the Energy Policy and Conservation Act (“EPCA”), 42 U.S.C. § 6297(c). Given the
possible impacts of that ruling, the Reach Codes Team analyzed policy options targeting equipment replacements that
allow for the installation of either electric or gas-fueled equipment. These packages include gas equipment combined
with additional efficiency measures resulting in options that are reasonably energy or LSC cost equivalent, to the extent
feasible.
For space heating, the heat pump path is a DFHP (existing furnace).. The gas pathway is a new air conditioner with the
following list of efficiency upgrades:
• 400 cfm/ton system airflow (HERS verified).
• 0.35 W/cfm fan efficacy (HERS verified).
• Refrigerant charge verification (HERS verified).
• R-8 ducts, 5% leakage (HERS verified).
• R-49 (from R-30) attic insulation.
• Air sealing of the ceiling from 7 to 6.5 ACH50.
The two pathways are presented in Figure 14 comparing total LSC energy use relative to the existing home for the
1992-2010 vintage. In most climate zones, the DFHP (existing furnace) path results in higher energy savings, in the
milder climates the air conditioner path saves marginally more energy. A reach code that establishes requirements
when an air conditioner is replaced or installed new, could allow for either a heat pump to be installed or an air
conditioner as long as the performance measures listed above are met. Note that in this analysis a DFHP (existing
furnace) was used; however, a reach code could require a different heat pump measure for the heat pump path. This
approach aligns with the CEC’s proposal for the 2025 Title 24 code cycle for heat pump alterations in single family
homes (California Energy Commission, 2023).
20 California Rest. Ass'n v. City of Berkeley, 65 F.4th 1045 (9th Cir. 2023) amended by 89 F.4th 1094 (9th Cir. 2024).
California Energy Codes & Standards | A statewide utility program 2024-04-25
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Figure 14. Heat pump space heater path compared to the air conditioner path.
For water heating, the federal minimum HPWH case was used to develop the package. The HPWH was compared to a
new gas storage water heater with a 50% solar thermal backup system.
Figure 15. Heat pump water path compared to gas with solar thermal.
The two pathways are presented in Figure 15 comparing total LSC energy use relative to the existing home for the
1992-2010 vintage. In all climate zones, the heat pump path results in higher energy savings than the gas path. A
reach code that establishes requirements when a water heater is replaced could allow for either a HPWH to be
installed or a gas water heater in combination with a solar thermal system that meets the solar fraction requirements
listed above.
California Energy Codes & Standards | A statewide utility program 2024-04-25
-Cost Effectiveness Analysis: Existing Single Family Building Upgrades 33 Recommendations and Discussion
4 Recommendations and Discussion
This analysis evaluated the feasibility and cost-effectiveness of retrofit measures in California existing homes built
before 2010. The Statewide Reach Codes Team used both On-Bill and LSC-based LCC approaches to evaluate cost-
effectiveness and quantify the energy cost savings associated with energy efficiency measures compared to the
incremental costs associated with the measures.
Conclusions and Discussion:
1. Envelope measures. Improving envelope performance is very cost-effective in many older homes. In addition
to reducing utility costs these measures provide many other benefits such as improving occupant comfort and
satisfaction and increasing a home’s ability to maintain temperatures during extreme weather events and
power outages. Below is a discussion of the results of specific measures.
a. Adding attic insulation is cost effective based on both LSC and On-Bill in many climate zones in homes
with no more than R-19 existing attic insulation levels. Increasing attic insulation from R-30 to R-49
was still found to be cost-effective based on at least one metric in the colder and hotter climates of
Climate Zone 10 (SDG&E territory only) through 16.
b. Insulating existing uninsulated walls is very cost-effective based on both metrics everywhere except
Climate Zones 6 and 7 (in Climate Zone 8 it’s only cost-effective based on LSC).
c. Adding R-19 or R-30 floor insulation is cost-effective based on LSC in the older two vintages (Pre-1978
and 1978-1991) in all climate zones except Climate Zones 6-10.
d. Replacing old single pane windows with new high-performance windows has a very high cost and is
typically not done for energy savings alone. However, energy savings are substantial and justify cost-
effectiveness of this measure based on at least one metric in Climate Zones 4, 8 through 12 (PG&E
territory only), and 13 through 16.
e. At time of roof replacement, a cool roof with an aged solar reflectance of 0.25 was found to be cost-
effective in Climate Zones 4, 6 through 12 (PG&E territory only), and 13 through 15. When the roof
deck is replaced during a roof replacement, adding a radiant barrier is low cost and provides
substantial cooling energy savings to be cost-effective in almost all climate zones and homes.
2. Duct measures: Many older homes have old, leaky duct systems that should be replaced when they reach the
end of life, typically 20-30 years. In this case, installing new ducts was found to be cost-effective based on at
least one metric (both in most cases) everywhere except mild Climate Zone 7 and Climate Zones 5 and 6 in
the 1978-1991 vintage. If duct systems still have remaining life they should be sealed and tested to meet 10%
leakage or lower; however, duct upgrades alone were only found to be cost-effective for newer homes in
Climate Zones 10 (SDG&E territory only), 11, and 13 through 16. Duct upgrades may be able to be coupled
with other measures to reduce the cost.
3. Heat pump space heating: HPSHs were found to be LSC cost-effective in many cases. The DFHP (existing
furnace) was LSC cost-effective everywhere except Climate Zone 15. The HPSH was LSC cost-effective
everywhere except Climate Zones 8 and 15.
a. Challenges to On-Bill cost-effectiveness include higher first costs and higher first-year utility costs due
to higher electricity tariffs relative to gas tariffs. SMUD and CPAU are two exceptions where first year
utility costs are lower for heat pumps than for gas equipment. Table 11 shows the impact of utility rates
on cost-effectiveness of HPSH where the standard and high efficiency HPSH and the HPSH + PV
measures are cost-effective under SMUD but not PG&E. Even with higher first year utility bills, there
were some cases that still proved On-Bill cost-effective including the DFHP with an existing furnace in
the central valley and northern coastal PG&E territories, the ducted MSHP in the central valley as well
as Climate Zone 14 in SDG&E territory, and the HPSH + PV measure in CZ 3-5 (PGE), 7-11, and 12
(SMUD) – 15.
b. The ductless MSHPs, evaluated for homes with existing ductless systems, were only found to be cost-
effective based on either metric in Climate Zones 1 and 16. Ductless MSHPs have a high incremental
cost because it is a more sophisticated system than the base model of a wall furnace with a window
AC unit. However, the ductless MSHP would provide greater comfort benefits if properly installed to
California Energy Codes & Standards | A statewide utility program 2024-04-25
-Cost Effectiveness Analysis: Existing Single Family Building Upgrades 34 Recommendations and Discussion
directly condition all habitable spaces (as is required under the VCHP compliance credit as evaluated
in this study) which may be an incentive for a homeowner to upgrade their system.
c. Higher efficiency equipment lowered utility costs in all cases and improved cost-effectiveness in many
cases, particularly with a ducted MSHP.
4. Heat pump water heating: All the HPWH measures were LSC cost-effective in all climate zones. Most
measures were not On-Bill cost-effective with the exception of the HPWH + PV which was cost-effective On-
Bill in CPAU, SMUD, and SDG&E territories in addition to Climate Zones 11, 13, 14, and 15. The HPWH
measures share many of the same challenges as the HPSH measures to achieving cost-effectiveness
including high first costs and utility rates and assumptions. Table 13 shows the impact of utility rates on cost-
effectiveness where some HPWH measures are cost-effective under SMUD utility rates but are not cost-
effective anywhere under PG&E rates in Climate Zone 12.
a. Various HPWH locations were also explored, however there are some factors outside of cost-
effectiveness that should also be considered.
i. HPWHs in the conditioned space can provide benefits such as free cooling during the
summer, reduced tank losses, and shorter pipe lengths, and in some cases show improved
cost-effectiveness over garage located HPWHs. However, there are various design
considerations such as noise, comfort concerns, and condensate removal. Ducting the inlet
and exhaust air resolves comfort concerns but adds costs and complexity. Split heat pump
water heaters address these concerns, but currently there are limited products on the market
and there is a cost premium relative to the packaged products.
ii. Since HPWHs extract heat from the air and transfer it to water in the storage tank, they must
have adequate ventilation to operate properly. Otherwise, the space cools down over time,
impacting the HPWH operating efficiency. This is not a problem with garage installations but
needs to be considered for water heaters located in interior or exterior closets. For the 2025
Title 24 code the CEC is proposing that all HPWH installations meet mandatory ventilation
requirements (California Energy Commission, 2023).
5. The contractor surveys revealed overall higher heat pump costs than what has been found in previous
analyses. This could be due to incentive availability raising demand for heat pumps and thereby increasing the
price. This price increase may be temporary and may come down once the market stabilizes. There are also
new initiatives to obtain current costs including the TECH Clean California program21 that publishes heat pump
data and costs; however, at the time of this analysis, the TECH data did not contain incremental costs because
it only had the heat pump costs but not the gas base case costs.
6. Table 18 shows how CARE rates and escalation rate assumptions will impact cost-effectiveness.
a. Applying CARE rates in the IOU territories has the overall impact to increase utility cost savings for an
all-electric building compared to a code compliant mixed fuel building, improving On-Bill cost-
effectiveness. This is due to the CARE discount on electricity being higher than that on gas. The
reverse occurs with efficiency measures where lower utility rates reduce savings and subsequently
reduce cost-effectiveness.
b. If gas tariffs are assumed to increase substantially over time, in-line with the escalation assumption
from the 2025 LSC development, cost-effectiveness substantially improves for the heat pump
measures over the 30-year analysis period and many cases become cost-effective that were not found
to be cost-effective under the CPUC / 2022 TDV escalation scenario. There is much uncertainty
surrounding future tariff structures as well as escalation values. While it’s clear that gas rates will
increase, how much and how quickly is not known. Future electricity tariff structures are expected to
evolve over time, and the CPUC has an active proceeding to adopt an income-graduated fixed charge
that benefits low-income customers and supports electrification measures for all customers.22 The
CPUC will decide in mid-2024 and the new rates are expected to be in place later that year or in 2025.
21 TECH Public Reporting Home Page (techcleanca.com)
22 https://www.cpuc.ca.gov/industries-and-topics/electrical-energy/electric-costs/demand-response-dr/demand-flexibility-rulemaking
California Energy Codes & Standards | A statewide utility program 2024-04-25
-Cost Effectiveness Analysis: Existing Single Family Building Upgrades 35 Recommendations and Discussion
While the anticipated impact of this rate change is lower volumetric electricity rates, the rate design is
not finalized. While lower volumetric electricity rates provide many benefits, it also will make building
efficiency measures harder to justify as cost-effective due to lower utility bill cost savings.
7. Under NBT, utility cost savings for PV are substantially less than what they were under prior net energy
metering rules (NEM 2.0); however, savings are sufficient to be On-Bill cost-effective in all climate zones
except Climate Zones 1 through 3 and 5 through 6.
a. Combining a heat pump with PV allows the additional electricity required by the heat pump to be offset
by the PV system while also increasing on-site utilization of PV generation rather than exporting the
electricity back to the grid at a low rate.
b. While not evaluated in this study, coupling PV with battery systems can be very advantageous under
NBT increasing utility cost savings because of improved on-site utilization of PV generation and fewer
exports to the grid.
Recommendations:
1. There are various approaches for jurisdictions who are interested in reach codes for existing buildings. Some
potential approaches are listed below along with key considerations.
a. Prescriptive measures: Non-preempted measures that are found to be cost-effective may be
prescriptively required in a reach code. One example of this type or ordinance is a cool roof
requirement at time of roof replacement. Another example is requiring specific cost-effective measures
for larger remodels, such as high-performance windows when new windows are installed or duct
sealing and testing where ducts are in unconditioned space.
b. Replacement equipment: This flavor of reach code sets certain requirements at time of equipment
replacement. This study evaluated space heating and water heating equipment. Where a heat pump
measure was found to be cost-effective based on either LSC or On-Bill, this may serve as the basis of
a reach code given the following considerations.
i. Where reach codes reduce energy usage and are not just fuel switching, cost-effectiveness
calculations are required and must be based on equipment that does not exceed the federal
minimum efficiency requirements.
ii. Where reach codes are established using cost-effectiveness based on LSC, utility bill impacts
and the owner’s first cost should also be reviewed and considered.
iii. A gas path should also be prescriptively allowed to safely satisfy federal preemption
requirements considering the CRA v. Berkeley case.23 Additional requirements may apply to
the gas path, as described in Section 3.3, as long as the paths are reasonably energy or cost
equivalent.
c. “Flexible Path”, minimum energy savings target: This flexible approach establishes a target for
required energy savings based on a measure or a set of measures that were found to be cost-effective
based on either LSC or On-Bill. A points menu compares various potential upgrades ranging from
efficiency, PV, and fuel substitution measures, based on site or source energy savings. The applicant
must select upgrades that individually or in combination meet the minimum energy savings target. The
measures used to set the target should be non-preempted measures.
2. Equipment replacement ordinances should consider appropriate exceptions for scenarios where it will be
challenging to meet the requirements, such as location of the HPWH, total project cost limitations, or the need
for service panel upgrades that wouldn’t have been required as part of the proposed scope of work in absence
of the reach code.
3. Consider extending relevant proposals made by the CEC for the 2025 Title 24 code (California Energy
Commission, 2023) in ordinances that apply under the 2022 Title 24 code, such as the following:
a. Mandatory ventilation requirements for HPWH installations (Section 110.3(c)7).
23 https://www.publichealthlawcenter.org/sites/default/files/2024-01/CRA-v-Berkeley-Ninth-Circuit-Opinion-Jan2024.pdf
California Energy Codes & Standards | A statewide utility program 2024-04-25
-Cost Effectiveness Analysis: Existing Single Family Building Upgrades 36 Recommendations and Discussion
b. Requirement for HERS verified refrigerant charge verification for heat pumps in all climate zones
(Table 150.1-A24).
4. When evaluating reach code strategies, the Reach Codes Team recommends that jurisdictions consider
combined benefits of energy efficiency alongside electrification. Efficiency and electrification have symbiotic
benefits and are both critical for decarbonization of buildings. As demand on the electric grid is increased
through electrification, efficiency can reduce the negative impacts of additional electricity demand on the grid,
reducing the need for increased generation and storage capacity, as well as the need to upgrade upstream
transmission and distribution equipment.
5. Education and training can play a critical role in ensuring that heat pumps are installed, commissioned, and
controlled properly to mitigate grid impacts and maximize occupant satisfaction. Below are select
recommended strategies.
a. The Quality Residential HVAC Services Program25 is an incentive program to train California
contractors in providing quality installation and maintenance while advancing energy-efficient
technologies in the residential HVAC industry. Jurisdictions can market this to local contractors to
increase the penetration of contractors skilled in heat pump design and installation.
b. Educate residents and contractors of available incentives, tax credits, and financing opportunities.
c. Educate contractors on code requirements. Energy Code Ace provides free tools, trainings, and
resource to help Californians comply with the energy code. Contractors can access interactive
compliance forms, fact sheets, and live and recorded trainings, among other things, on the website:
https://energycodeace.com/. Jurisdictions can reach out to Energy Code Ace directly to discuss
offerings.
6. Health and safety
a. Combustion Appliance Safety and Indoor Air Quality: Implementation of some of the recommended
measures will affect the pressure balance of the home which can subsequently impact the safe
operation of existing combustion appliances as well as indoor air quality. Buildings with older gas
appliances can present serious health and safety problems which may not be addressed in a remodel
if the appliances are not being replaced. It is recommended that the building department require
inspection and testing of all combustion appliances located within the pressure boundary of the
building after completion of retrofit work that involves air sealing or insulation measures.
b. Jurisdictions may consider requiring mechanical ventilation in homes where air sealing has been
conducted. In older buildings, outdoor air is typically introduced through leaks in the building envelope.
After air sealing a building, it may be necessary to forcefully bring in fresh outdoor air using supply
and/or exhaust fans to minimize potential issues associated with indoor air quality.
24 This requirement does not show up in the Express Terms for alterations in Section 150.2(b)1F, but the Statewide Reach Codes Team expects that it will be added to the next release of the proposed code language in the 45-day language as it aligns with the proposal made by the Codes and Standards Enhancement Team (Statewide CASE
Team, 2023).
25 https://qualityhvac.frontierenergy.com/
California Energy Codes & Standards | A statewide utility program 2024-04-25
-Cost Effectiveness Analysis: Existing Single Family Building Upgrades 37 References
5 References
California Energy Commission. (2017). Rooftop Solar PV System. Measure number: 2019-Res-PV-D Prepared by
Energy and Environmental Economics, Inc. Retrieved from
https://efiling.energy.ca.gov/getdocument.aspx?tn=221366
California Energy Commission. (2021b). Final Express Terms for the Proposed Revisions to the 2022 Energy Code
Reference Appendices. Retrieved from https://efiling.energy.ca.gov/Lists/DocketLog.aspx?docketnumber=21-
BSTD-01
California Energy Commission. (2022b). 2022 Reference Appendices for the 202 Building Energy Efficiency Standards.
CEC-400-2022-010-AP. Retrieved from https://www.energy.ca.gov/sites/default/files/2022-08/CEC-400-
2022-010-AP.pdf
California Energy Commission. (2022c, Feb). 2022 Single-Family Residential Alternative Calculation Method Reference
Manual. CEC-400-2022-008-CMF-REV. Retrieved from https://www.energy.ca.gov/publications/2022/2022-
single-family-residential-alternative-calculation-method-reference-manual
California Energy Commission. (2023). 2025 Energy code Hourly Factors. Retrieved from
https://www.energy.ca.gov/files/2025-energy-code-hourly-factors
California Energy Commission. (2023). Draft 2025 Energy Code Express Terms. Retrieved from
https://efiling.energy.ca.gov/GetDocument.aspx?tn=252915&DocumentContentId=88051
California Public Utilities Commission. (2021a). Utility Costs and Affordability of the Grid of the Future: An Evaluation
of Electric Costs, Rates, and Equity Issues Pursuant to P.U. Code Section 913.1. Retrieved from
https://www.cpuc.ca.gov/-/media/cpuc-website/divisions/office-of-governmental-affairs-
division/reports/2021/senate-bill-695-report-2021-and-en-banc-whitepaper_final_04302021.pdf
California Public Utilities Commission. (2021b). Database for Energy-Efficient resources (DEER2021 Update). Retrieved
April 13, 2021, from http://www.deeresources.com/index.php/deer-versions/deer2021
Department of Energy. (2022). Preliminary Analysis Technical Support Document: Energy Efficiency Program for
Consumer Products and Commercial and Industrial Equipment. Retrieved from
https://www.regulations.gov/document/EERE-2017-BT-STD-0019-0018
Department of Energy. (2023). Technical Support Document: Energy Efficiency Program for Consumer Products and
Commercial and Industrial Equipment: Room Air Conditioners. Retrieved from
https://www.regulations.gov/document/EERE-2014-BT-STD-0059-0053
E-CFR. (2020). https://www.ecfr.gov/cgi-
bin/retrieveECFR?gp=&SID=8de751f141aaa1c1c9833b36156faf67&mc=true&n=pt10.3.431&r=PART&ty=HTM
L#se10.3.431_197. Retrieved from Electronic Code of Federal Regulations: https://www.ecfr.gov/cgi-
bin/retrieveECFR?gp=&SID=8de751f141aaa1c1c9833b36156faf67&mc=true&n=pt10.3.431&r=PART&ty=HTM
L#se10.3.431_197
Statewide CASE Team. (2023). Residential HVAC Performance. Codes and Standards Enhancement (CASE) Initiative
2025 California Energy Code. Prepared by Frontier Energy. Retrieved from
https://title24stakeholders.com/wp-content/uploads/2023/11/Revised_2025_T24_Final-CASE-Report-RES-
HVAC-Performance.pdf
Statewide Reach Codes. (2023). Cost Effectiveness Explorer. Retrieved from Cost Effectiveness Explorer:
https://explorer.localenergycodes.com/
Statewide Reach Codes Team. (2021). 2019 Cost-Effectiveness Study: Existing Single Family Residential Buidling
Upgrades. Retrieved from https://localenergycodes.com/content/resources
California Energy Codes & Standards | A statewide utility program 2024-04-25
-
lding Climate Zones
California, 2017
cJ Building Climate Zones
[] County Boundary
SOurc.. C.~omll Ene,gyCOmm-
Cost Effectiveness Analysis: Existing Single Family Building Upgrades 38 Appendices
6 Appendices
6.1 Map of California Climate Zones
Climate zone geographical boundaries are depicted in Figure 16. The map in Figure 16 along with a zip-code search
directory is available at: https://ww2.energy.ca.gov/maps/renewable/building_climate_zones.html
Figure 16. Map of California climate zones.
California Energy Codes & Standards | A statewide utility program 2024-04-25
-
2023 Electric California Climate Credit Schedule
PG&E
SCE
SDG&E
February or
March
$38.39
$71.00
$60.70
April May June July
Residential Natural Gas California Climate Credit
Aug
In 2023, the 2023 Natural Gas California Climate Credit will be distributed in February or March instead of April.
Sept Oct
$38.39
$71.00
$60.70
2019 2020 2021 2022 2023 Total Value Received Per Household 2018-2023
PG&E $30 $25 $27 $25 $48 $52.78 $208
SDG&E $34 $21 $18 $43 $43.40 $162
Southwest Gas $22 $25 $27 $28 $49 $56.35 $207
SoCalGas $50 $26 $22 $44 $50.77 $194
Cost Effectiveness Analysis: Existing Single Family Building Upgrades 39 Appendices
6.2 Utility Rate Schedules
The Reach Codes Team used the CA IOU and POU rate tariffs detailed below to determine the On-Bill savings for
each package. The California Climate Credit was applied for both electricity and natural gas service for the IOUs using
the 2023 credits shows below.26 The credits were applied to reduce the total calculated annual bill, including any fixed
fees or minimum bill amounts.
Electricity rates reflect the most recently approved tariffs. Monthly gas rates were estimated based on recent gas rates
(November 2023) and a curve to reflect how natural gas prices fluctuate with seasonal supply and demand. The
seasonal curve was estimated from monthly residential tariffs between 2014 and 2023 (between 2017 and 2023 for
CPAU). 12-month curves were created from monthly gas rates for each of the ten years (Seven years for CPAU).
These annual curves were then averaged to arrive at an average normalized annual curve. This was conducted
separately for baseline and excess energy rates. Costs used in this analysis were then derived by establishing the
most recent baseline and excess rate from the latest tariff as a reference point (November 2023), and then using the
normalized curve to estimate the cost for the remaining months relative to the reference point rate.
26 https://www.cpuc.ca.gov/industries-and-topics/natural-gas/greenhouse-gas-cap-and-trade-program/california-climate-credit
California Energy Codes & Standards | A statewide utility program 2024-04-25
-Cost Effectiveness Analysis: Existing Single Family Building Upgrades 40 Appendices
6.2.1 Pacific Gas & Electric
The following pages provide details on the PG&E electricity and natural gas tariffs applied in this study. Table 20
describes the baseline territories that were assumed for each climate zone. A net surplus compensation rate of
$0.07051/ kWh was applied to any net annual electricity generation based on a one-year average of the rates between
December 2022 and November 2023.
Table 20. PG&E Baseline Territory by Climate Zone
Climate Baseline
Zone Territory
CZ01 V
CZ02 X
CZ03 T
CZ04 X
CZ05 T
CZ11 R
CZ12 S
CZ13 R
CZ16 Y
The PG&E monthly gas rate in $/therm was applied on a monthly basis according to the rates shown in Table 21.
These rates are based on applying a normalization curve to the November 2023 tariff based on ten years of historical
gas data. Corresponding CARE rates reflect the 20 percent discount per the GL-1 tariff.
Table 21. PG&E Monthly Gas Rate ($/therm)
Month Total Charge Baseline Excess
January $2.05 $2.43 February $2.08 $2.46
March $1.92 $2.31
April $1.80 $2.20
May $1.77 $2.18
June $1.78 $2.18
July $1.80 $2.20
August $1.85 $2.26
September $1.92 $2.33
October $1.99 $2.40
November $2.06 $2.46
December $2.05 $2.44
California Energy Codes & Standards | A statewide utility program 2024-04-25
-
GAS
Baseline Territories and Quantities 11
---
Effective April 1, 2022 -Present
BASELINE QUANTITIES (Therms Per Day Per Dwelling Unit)
Individually Metered
Baseline Summer Winter Off.Peak
Territories (April-October) (Nov, Feb, Mar)
Effective Apr. 1, 2022 Effective Nov. 1, 2022
p 0.39 1.88
Q 0.56 1.48
R 0.36 1.24
s 0.39 1.38
T 0.56 1.31
V 0.59 1.51
w 0.39 1.14
X 0.49 1.48
y 0.72 2.22
Master Metered
Baseline Summer
Territories (April-October)
Effective Apr. 1, 2022
p 0.29
Q 0.56
R 0.33
s 0.29
T 0.56
V 0.59 w 0.26
X 0.33
y 0.52
Summer Season: Apr-Oct
Winter Off-Peak: Nov, Feb, Mar
Winter On-Peak: Dec, Jan
Advice Letter: 4589-G
Decision 21-11-016
GRC 2020 Ph II [Application 19-11-019]
Filed: Nov 22, 2019
Winter Off.Peak
(Nov, Feb, Mar)
Effective Nov. 1, 202.2
1.01
0.67
0.87
0.61
1.01
1.28
0.71
0.67
1.01
Winter On-Peak
(Dec,Jan)
Effective Dec, 1, 2022
2.19
2.00
1.81
1.94
1.68
1.71
1.68
2.00
2.58
Winter On-Peak
(Dec,Jan)
Effective Dec. 1, 2022
1.13
0.77
1.16
0.65
1.10
1.32
0.87
0.77
1.13
Cost Effectiveness Analysis: Existing Single Family Building Upgrades 41 Appendices
California Energy Codes & Standards | A statewide utility program 2024-04-25
-
Gas and
Electric Company· Revised
Cancelling Revised
Cal. P.V.-C. Sheet No.
Cal. P.V.C. Sheet No.
U 39 Oakland, Ca/ifomia
ELECTRIC SCHEDULIE E-TOU-C Sheet 2
RESIDENTIAL TIME-OF-USE (PEft/K PRICING 4 -Q, p.m. EVERY DAY)
RATES:
(Cont'd.)
E-TOU-C TOTAL BUNDLED RATES
Total Energy Rates($ PE!f kWh)
Summer
Total Usage
Baseline Credit (Applied 1o Baseline Usage Only)
Winter
Total Usage
Baseline Credil (Applied 1o Baseline Usage Only)
Delivei:y Minimum Bil Amount($ per meter per day)
California Climate Cred".rt (per hoosehold. per semi
annual paymenl ocourring, in the Marcil' and October
bill cydes)
PEAK
$0.53933 (I)
(S0.08S5 t ) {R)
$0.43662 (I)
($0.08S51 ), (R)
$0.37612
($38.39)
OF:F-PEAK
$0.4558Q (I)
($0.08851) ,(R)
S0.40827 (I)
($0.08851) ,(R)
56550-E
5622:Q-'E
Total bundled service charges shown on customE!f's bills are unbundled acoording to the component
rates shown bel'ow. Where the defive:ry minimum bill amount applies. lhe customer's bill will equal lhe•
sum of (1) the delivery minimum bill amounl plus (2) for bundled servic:e, the generation rate times the
number of kWh used. For revenue• accounting purposes. lne r·evenues from the delivery minimum billl
amounl will be assigned lo the Transmission. Transmission Rate Adjustments. Reliability Services,
Public Purpose P,ograms, Nuclear Ole-commissioning, Competition Transition Charg:es, Energy Cost
Recovery Amou:nl. Wildfire Fund Charge, and New System Gene,ralion Charges based on kWh
usage limes the corresponding unbundled rate, component per kWh, w'ith any residual revenue
assigned 1o Disb:ibution.
• Pursuant to D.23-02-014. disbursement of the April 2023 residential Climate Credit shall begin by
March 1. 2023.
Advice
Decision
7009-E Issued by
Mereruth Allen
Vice President, Regulatory Affaint
Submitted
Effective
Resolution
(Continued)
August 25. 2023
September 1, 2023
Cost Effectiveness Analysis: Existing Single Family Building Upgrades 42 Appendices
California Energy Codes & Standards | A statewide utility program 2024-04-25
-
ific Gas and
Electric Campany' Revised
Caooe1!ing Revised
Cal. P.LJ.C. Stteet No.
Cal. P. LJ. C. Street No.
U 39 Oal<Jand, Ga!lfomia
ELECTRIC SCHEDULE E-lOU-C Sheet 3
RATES:
(Cont'd.)
IRESID8NTIAL TIME-OF-USE (PEAK PRICING 4 -Q p.m. EVERY DAY}
UHBUNDLIHG OF E-TOU-C TOTAl!..IRAl ES
Enargy Rllll!s by Companor,l IS I"" l \'llh) PEAK OFF-PEAK
c;e_,...r.mon:;
Sun:sner 1• usage) so.19ns
W..ler f•u••ge) $0.14918
Disuibtiti'on•it:
Surmruor (d u•oge) $0.17029
w .,1e;r 1• u••ge) $0.11618
ConH•rv..tion ln<Hlli-.. Adjus'lnmnl (&...tino Usage)
Consl!'JV>dioo lnc:l!'llliY<I Adjustrruont (Ow!r B.uelin" I.Jsa!ll")
Transmiu iod (al """9") Transmission llbrte AIIJu!ltmenls" (all usa;a)
'Reli;abiltiy Se-rviioes' (all usa,~)
Public PulJ>Ose P.ograms (al usage>
'Ml,cl9r Decommissionin9 1• u•"9")
C'ampetman Transili0<1 Charges (211 usage)
'En"'V)' Cosl ROGOYK)' Amount (all usagr,)
Wildfire FtJnd Ch..-g,e (aD usage)
New Sys'!=> G=-erall0t1 Cb..-90 (all ..,_.,9"r'
Wildfire H;udonlng Ch;u-ge {all U5"!11!)
Reconry IBond Ch..-ge (•II usztgel
Rec:onrylBond Credit (al u•ag•)
Bundlod P,owK Charg1t lncll~,enc-e Adjustmoenl (all u.age)"""
(I)
(I)
W.13432:
$0.12413-
ro.15029
$0.112811
(S0..02:216) (I)
S0..061135 (I)
$1)..(15254
S0.00059
S0..00069
$1)..(12578
$0.00135
S0.00030
($1),,000711
$1)..00530
$1),,00046
$000254
Sl).0052:8 (R)
($ll..0052:8) (I)
$1),,01309
(I)
(I)
• Transmission, Transmission Rate ~ls and R~ Selvice dnarges are combined for
presenliltion on ,aJStx>mer bills.
llistrilution and New Sys1em Gena-ation Charges are conm.ed for iwesentation on c115tomer
bills .
.. • Direct Aca», Corn-nunity Chcioe J¼lgr,,g;,tion and T ransillonal Bundliod Senrioe Cuslomen pay a,.,
""'plicable V°"1laged Power Clmrge lndi!ll!femc., Adjus11111!nl.. Gen""'51ion "r>:f Bur>:fled PCIA are mmbilllkl
far pr6"'tt:ation on bundled customer bills.
Advice Dea~ 7009-E ~.sued by
Meredith Allen
V-.ice Pn:-sidenf, Regulato,y Alfilifs
Submitted
Effective
Re:whmon
(Continued)
August 25. 2023
September 1. 2023
Cost Effectiveness Analysis: Existing Single Family Building Upgrades 43 Appendices
California Energy Codes & Standards | A statewide utility program 2024-04-25
-
ific Gas and
Electric Company· Revised
Cancelling Revised
Cal. P.U.C. Sheet No.
Cal. P.U.C. Sheet No.
56547-E
56226-E
u 39 Oakland, California
ELECTRIC SCHEDULE E-ELEC Sheet 2
RESIDENTIAL TIME-OF-USE (ELECTRIC HOME)
SERVICE FOR CUSTOMERS WITH QUALIFYING ELECTRIC TECHNOLOGIES
RA TES:(Cont'd.)
TOTAL BUNDLED RATES
Base Services Charge (S per meter per day) $0.49281
PEAK PART-PEAK OFF-PEAK Total Energy Rates ($ per kWh)
Summer Usage
Winter Usage
$0.56589 (I)
$0.33438 (I)
$0.40401 (I)
$0.31229 (I)
$0.34733 (I)
$0.29843 (I)
California Climate Credit (per household, per
semi-annual payment occurring in the March'
and October bill cydes)
($38.39)
Total bundled service charges shown on a customer's bills are unbundled according to the component rates shown below.
UNBUNDLING OF TOT AL RA TES
Energy Rates by Component($ per kWh) PEAK PART-PEAK OFF-PEAK
t
Generation:
Summer Usage $0.28164 $0.18253 $0.13743
Winter Usage $0.11951 $0.09954 $0.08619
Distribution-:
Summer Usage $0.17932 (I) $0.11655 (I) $0.10497
Winter Usage $0.10994 (I) $0.10782 (I) $0.10731
Transmission* (all usage) $0.05254 $0.05254 $0.05254
Transmission Rate Adjustments* (all usage) $0.00059 $0.00059 $0.00059
Reliability Services• (all usage) $0.00069 $0.00069 $0.00069
Public Purpose Programs (all usage) $0.02578 $0.02578 $0.02578
Nuclear Decommissioning (all usage) $0.00135 $0.00135 $0.00135
Competition Transition Charges (all usage) $0.00030 $0 00030 $0.00030
Energy Cost Recovery Amount (all usage) ($0.00071) ($0.00071) ($0.00071)
Wildfire Fund Charge (all usage) $0.00530 $0.00530 $0.00530
New System Generation Charge (all usager $0 00346 $0.00346 $0.00346
Wildfire Hardening Charge (all usage) $0.00254 $0.00254 $0.00254
Recovery Bond Charge {all usage) $0 00528 (R) $0.00528 {R) $0.00528
Recovery Bond Credit (all usage) ($0.00528) (I) ($0.00528) (I) ($0.00528)
Bundled Power Charge Indifference $0 01309 $0 01309 $0.01309
Adjustment (all usage)* ..
Transmission, Transmission Rate Adjustments and Reliability Service charges are combined for presentation on customer
bilts.
Distribution and New System Generation Charges are combined for presenlation on oustomer bills.
Direct Access, Community Choice Aggregation and Transitional Bundled Service Customers pay the applica·ble Vintaged
Power Charge Indifference Adjustment. Generation and Bundled PCIA are combined for presenlation on bundled customer
bills.
Pursuant to D.23-02-014, disbursement of the April 2023 residential Climate Credit shall begin by March 1, 2023.
(I)
(I)
(R)
(I)
(Continued)
Advice
Decision
7009-E Issued by
Meredith Allen
Vice President, Regulatory Affairs
Submitted
Effective
Resolution
August25,2023
September 1, 2023
Cost Effectiveness Analysis: Existing Single Family Building Upgrades 44 Appendices
California Energy Codes & Standards | A statewide utility program 2024-04-25
-
Gas and
Electric Company· Original Cal. P.U.C. Sheet No. 54738-E
U 39 San Francisco, California
ELECTRIC SCHEDULE E-ELEC Sheet 3 (N)
RESIDENTIAL TIME-OF-USE (ELECTRIC HOME) (N)
SERVICE FOR CUSTOMERS WITH QUALIFYING ELECTRIC TECHNOLOGIES
SPECIAL
CONDITIONS:
1. TIME PERIODS: Times of the year and limes of the day are defined as follows: (N)
Advice
Decision
All Year:
Peak: 4:00 p.m. to 9:00 p.m. every day including weekends arid holidays.
Partial-Peak: 3:00 p.m. to 4:00 p.m. and 9:00 p.m. to 12:00 a.m. every day including
weekends and holidays.
Off-Peak: All other hours.
2. SEASONAL CHANGES: The summer season is June 1 through September 30 and
the winter season is October 1 through May 31. When biUing includes use in both the
summer and winter periods, charges will be prorated ba.sed upon the number of days
in each period.
3. ADDITIONAL METERS: If a residential dwelling unit is served by more than one
elecbic meter, the customer must designate which meter is the primary meter and
which is (are) the additional meter(s).
4. BILLING: A customer's bill is calculated based on the option applicable to the
customer.
Bundled Service Customers receive generation and delivery services solely from
PG&E. The customer's bill is based on the Unbundling of Total Rates set forth above.
Transitional Bundled Service (TBS) Customers take TBS as prescribed in Rules
22.1 and 23.1, or take PG&E bundled service prior to the end of the six (6) month
advance notice period required to elect PG&E bundled service as prescribed in Rules
22.1 and 23.1. TBS customers shall pay all charges shown in the Unbundling of Total
Rates except for the Bundled Power Charge Indifference Adjustment and the
generation charge. TBS customers shall also pay for their applicable Vintaged Power
Charge Indifference Adjustment provided in the table below, and the short-term
commodity prices as set forth in Schedule TBCC.
(N)
(Continued}
6768-E
D.21-11-016
Issued by
Meredith Allen
Vice President, Regulatory Affairs
Submitted
Effective
Resolution
November 18, 2022
December 1, 2022
Cost Effectiveness Analysis: Existing Single Family Building Upgrades 45 Appendices
California Energy Codes & Standards | A statewide utility program 2024-04-25
-
Gas and
Electric Company· Revised
Cancelling· Revised
Cal. P.U.C. Sheet No.
Cal. P.U.C. Sheet No.
54734-E
53424-E
U 39 San Francisco, Cafifom;a
ELECTRIC SCHEDULE 0-CARE Sheet 1
LINE-ITEM IJl1SOOUNT FOR CALIFORNIAALTERNATE RAT1ES FOR ENERGY (CARE)
CUSTOMERS
APPUCABILHY: This sclledule is applicable to single-phase andl polyphase residential service in
single.family dwellings and in flats and apantments separately metered by PG&E
and domestic submetered tenants residing in multifamily accommodations,
mobi!ehome parks and to q,ualifying recreational ·vehicle par:ks and marinas and to
tarm selVice on the premises operated by lhe person whose residence is supplied
lhrough the same meter, where the applicanl qualifies for Cerrfomia Ailternate
Rates for Energy (CARE) under the eligibility and certification criteria set forth in
Electric Rule HI. 1. CARE service is available on Schedules E-~. E~. IE-TOU-lB,
E-TOU-C. E-TOU-0. EV2. E-ELEC. EM. ES. ESR. Eir and EM-TOU. (T)
TE:RRITORY:
RATES:
This rate schedule applies everywhere PG&E provides electric serv.ice.
Customers. taking seNice on this rate schedule whose o.therwi.se applicable rate
sclledule has no Delivery Minimum Bill Amount (Schedule E-El EC) will receive a
CARE percentage disooont of 35.000% on ·their total bundled dlarges (except tor
ihe California Climate Credit, which will no! be d'iscounted). Customers takil)Q
service on this rate schedule whose otherwise applicable rate schedu'le has e
Delivery Minimum Bi!I Amount (ell other sched'ules) will receive e CARE
percentage disoount ('A" or ·c· below) on, lheir total bundled charges on ,their
otherwise applicable rate schedule (except tor the Califomie Climate Credit .. which
will not be discounted) and .also will receive a percentage discounl ("8" or ·o·
below), on the delivery minimum biU amount. ,if epp1icabte. The CARIE discount will
be celoolated for direct a.ooess and community choice aggJegation customers
based on the total charges as 1if they were subjecl to bundled service rafes.
Discounts will be applied es a 1residual reduction to distribulion cllarges .. afte:r 0-
CARE customers are exempted from the Wil'dfire Fund Charge, Reco..,ery Bond
Charge, Rec0'.lery Bond Credit. end !tie CARE surcharg;e portion of the public
purpose program chmge used to fund ltie CARE discount These conditions al.so
apply to master-metered customers and to, qualified sub-metered tenants where
the master-meter customer is join1fy served under PG&Es Rate Sclledule 0-
CARE and either Schedule EM. ES. ESR. ET. ,or EM-TOU.
for master-metered customers where one or more of the submetered tenants
qualffie-s. for CARE rates under the eligibility and certifi.celion criteria sel forth in
Rule HU, 19.2. or 19.3. the CARE discount is equal to a percentage re· below)
of the total bundled charges, multiplied by the numbe:rof CARE unfts divided by
lhe lotall number ot unils. In addition, m aster-metered customers eligible for
D-CARIE will receive· a percentage discount ("O" below) on the delivery minimum
biD amount. if applicable.
Iii is the responsibility of the master-metered customer to advise PG&E within 15
days following any chall!Je in the number of dweOing units andfor any decrease· in
ihe number of qualifyill!J CARE e,pplicants that results when such applicants move
out of their su'.bmetered or ncn-submetered dwelfing unit. or ·submeter,ed
permanent-residence RV or permanent-reside.nee boat.
(N)
I
I
(N)
(T)
I
(T)
(T)
(l )
I
(L}
(Continued)
Cost Effectiveness Analysis: Existing Single Family Building Upgrades 46 Appendices
California Energy Codes & Standards | A statewide utility program 2024-04-25
-
Gas and
Electric Company• Revised
Cancelling Revised
Cal. P. U. C. Sheet No.
Cal. P.U.C. Sheet No.
56208-E
56020,E
U 39 5.in Francisco, California
ELECTRIC SCHEOU l E D-CARE Sheet 2
LINE-ITEM DISCOUNT FOR CALIFORNIA.A/LllERNATE RATES FOR ENERGY (CARE)
CUSTOMERS
RATES: (Cont'd)
SPECIAL
CONOITIONS:
Advice
Decision
6968-E
A. D-CARE Discount
B. Delivery Minim11m Bill Discount:
C. Master-Meter D-CARE Discount
D. Master-Meter Delivery MinimYm
BiD Discount:
34.965
50.000
34.965
50.000
'% (Percent) (I)
%{Percent)
'% (Percent) (I)
% {P,ercent)
1. OTHERW,ISE APPLICABLE SCHEDULE: The Special Cond[ti<lns of the
Ou.stomer's otherwise applicable rate schedule will appl'y lo this schedule.
2. ELIGIBILITY: To be eligible to receive D-CARE the .applicant nnusl qualify
\llooer lhe criteria set forth in PG&E·s IElectric Rules 19.1. H>.2. and Ul.3 and meel
1he cerlificalion requirements I1-lereof to the s.alisfacticm of PG&E. Qualifying Direct
Access. CommYnity Choice Aggregation, SeNice. and Transitional Bundled
Service customers are also eligible to take s.ervice on Sdled'ule D-CARE.
Applicanls may q11alifyfor D-CARE at their primary residence ,onl'y. Customers or
sub-metered tenants participating in the Family Electric Rate Assistance {FERA)
program cannot concurrently participate in Ille CARE program.
Issued by
.Meredi th Alferi
Vice Pn,sident, Regulata<y Affairs
Submitted
Effective
ResoJution
June-23. 2023
July 1, 2023
Cost Effectiveness Analysis: Existing Single Family Building Upgrades 47 Appendices
California Energy Codes & Standards | A statewide utility program 2024-04-25
-
Summer Daily Allocations (June through September)
Baseline Region Number
5
6
8
9
10
13
14
15
16
SPECIAL CONDITIONS
All-
Daily kWh Electric
Allocation Allocation
17.2 179
11.4 8.8
12.6 9 8
16.5 12.4
18 9 15.8
22.0 24.6
18.7 18.3
46.4 24.1
14.4 13.5
Schedule TOU-D
TIME-OF-USE
DOMESTIC
(Continued)
1. Applicable rate time periods are defined as follows:
Option 4-9 PM. Option 4-9 PM-CPP. Option PRIME. Option PRIME-CPP :
Winter Daily Allocations (October through May)
All-
Daily kWh Electric
Baseline Region Number Allocation Allocation
5 18.7 20.1
6 11.3 13.0
8 10.6 12.7
9 12.3 14.3
1C 12.5 17.0
12 12.6 243
14 12.0 21.3
1~ 9.9 18.2
Hi 12.6 23.1
Sheet 12 (T)
(T)
TOU Period Weekdays Weekends and Holidays
Summer Winter Summer Winter
On-Peak 4 p.m. -9 p.m. N/A NIA NIA
Mid-Peak N/A 4 p.m. - 9 p.m. 4 p.m. - 9 p.m. 4 p.m. -9 p.m.
Off-Peak All other hours 9 p.m. - 8 a.m. All other hours 9 p.m. - 8 a.m.
Super-Off-Peak N/A 8 a.m. -4 p.m. NIA 8 a.m. -4 p.m.
CPP Event 4 p.m. - 9 p.m. 4 p.m. - 9 p.m. NIA NIA Period
Cost Effectiveness Analysis: Existing Single Family Building Upgrades 48 Appendices
6.2.2 Southern California Edison
The following pages provide details on the SCE electricity tariffs applied in this study. Table 22 describes the baseline
territories that were assumed for each climate zone. A net surplus compensation rate of $ 0.06030/ kWh was applied to
any net annual electricity generation based on a one-year average of the rates between December 2022 and
November 2023
Table 22: SCE Baseline Territory by Climate Zone
Climate Baseline Zone Territory
CZ06 6
CZ08 8
CZ09 9
CZ10 10
CZ14 14 CZ15 15
California Energy Codes & Standards | A statewide utility program 2024-04-25
-
rn Cslifomis Edison
Ros,emead. Caritomia (U 338-E)
Revised
Car1Celli"9 Revised
Cal. PUC Sheet No_ 85111--E
CaL PUC Sheet No_ 74502-E
RATES
Schedule IOV:P
TIME-OF-USE
DOMESTIC
(Continued)
Sheet 2
Customers receiving service under ihis Schedule will be charged the applicable rates under O ption 4-9 1PM,
Option 4-Q PM-CPP. Op1ion 5-8 PM, Option 5-8 PM·CPP, Option PRIME .. Option PRIME-CPI? Option A,
Option A-CPP. Oplioll B. or-Option B-CRP. as listed beww. CPP Event Charges will apply to all energy
usage during CPP Event Energy Charge periods alld CPP Non,-Event Energy Credits will apply as a
reduction or, CPP f'lon-<Event Energy Credit Periods during Summer Season days. 4:00 p_m_ to Q:OCl p.m .. as
described ill Special Conditions 1 and 3. below:
,Qplfpn +R FM J NIAJ +R PM::¢FP
1::,n..,W °'1-w■ • 1.ik.W.h
8t.Jrnm•t S .. •on -On.-~.._ O.UDYI lfiJ
h1hl-h.a. 0.7'1~11 IIRJ
O il,.P.,o1, 0.:1' ..... 1!2' IA I
W11ntat Sauan -1.1Jt11-~-. O.Ul~s, IIRJ
Ofi.~_,. D.2441-82' tA:J
~upt1r..Off..P.._., 0.221)11) tR)
8-;; .. ic Ctta~• -S~•Y
Sangl__,.affllly R-idanca O.O·~ 1
MuN..,.-•md'I Raalidanca 0 .024
Manunum CNlrg■·-• Sid•~
:Sine• ... nm., R_ld.,c::• o.34s
IMYlt~■md)' R_Ki.,c• O.:!M8
MW11m:um Cha"R• -4.t.ted1c .. 8 ..... lln■)"" ~ • $Jday
"!lmv·• lf'■mlly A--=t .. c:• 0 .1 rs
1M1.ifb-F■md)' R--=t_.c::• 0 .1 tS
C.bfam .. , A'tt■rr:1111ta R ... ■ '°'
En4N1iJY Ooccu.-.l • '%,
t--,,111 t:.~1r.c KIib■ Aaaa.1•nc::• ~Ill
·Qpbpp +I: PM:CPP
CP~ EvwnJ: En..rw,Ch.,1:1" -SJkWh
:kJrnm•r CT•P Non-iE'Hnll c,..c111
On-""";ak t:..1-vr e ... sW -SIII.Wh
Mlil:dmum A VMllim'l-tl Cr•dtl. Sncw,,·--·
~umrnar !s•aaan
111,00) «•►
1DU.00"'
10000
O 2-eS-43'Ctt
0.11101 Cit
0.11 :US::i Cit
0~21,~:l CIJ
0.136~1 Cit
0 11800Ct►
ouooou
oilOOOo
(0.'l!liln:tl
o .OUOOO
o.ooouo
<),C>l)O(l(J
0.00000
<l.OUOllo
0.00000
I
• Rtlanlill'.G 1~ a1 IIMI dsic<l<Jnl !"'"'""'.age aoa -In.,_ awlk•lllo Spod•1 c«dlxin ol lhls _,._
•• Tllo ~li>llffllln Olal!J• IS"~ -.,. Dolt."Gf) -.. El\ll!Q', Chal\jll, p"5 Iha ~ a....: Ch•rge i. loss -.,. Mlninum Charg,a.
••• Tho.,,_ CompoOlon Tranollon Ol•Jtl• CTC ol CW.00000) po, lY/11 Is ,__ In lho UG com-ol -,lion. (Tl
••••Tna Baalna Cra.S1.a~L1p,U> 1001'. alrana l!.-alna.Ali0caUon.ro91nU15•of lima4...US. lDapa,'ald. Adlldan,alB.11MIAbaAlbc..nofl1111f:'lP)'ID'
CUMDmars wll'I Ha.al Purn_p w.-, HuNn. sar¥ad t.ftiar a..s Optl0ft Thu ~Dina A.lloc~llons ara 5411 b1h ift fl.ra«hin;a~ SQlamonl, Part H .
........... -A.-Ctodh rs Ncoppo<lu.<il"mwMlorCPPC....lamond.lal P•~-119mod'-«dllllo>nd .... pan .. --·
1 To"'l = Jo1.110olt.•!)I S.000 , .... •"' app-• loBrdad S.W...lli111c1Acoass(DAI and Comm•"')> 000.,0 ~ s.n<oo (OCA -)
CUStama.rs,timi:01 DA ilnd Cc.A Sa~ Ousmm.Gf'S .lll'lllnot SJ.bioa: tDlhA OL\lR9C nat■compona.m at'lla k'hodub but.btllildp;lf lha OWR9Cm
.,,.-,idad l¥ S-IQ DA-CRS « SCIIOdUII OCA-CRS.
2 GanGrallor1 = Tha Gon '"""' •111 applic.atia oott ID 6'.rlded 54rnce OJslomws. Sff !lpeclot C<ntt.on bal:lw tor !'CIA,._
~ m\REC.=~011111., .. -iIJ'IIR) lE""f0 c.-, _~or,_. llflOnnalxin OR lhJI D\YR &>orirt en.cu, -h ea,,q ~ SpQd•l
COodllonOll lhl• ~-
4 ~lid on an iftq~ bi1Sdo, per~ sam~t,. SM: b Spoci.111 c«dUXIS ,O'I au,; &:.hOdUlt fOf' a'ICt'e: ~
(To be inserted by uliliiyl
Advice 4Q2Q•E -----------Decision
:!tnJ
(Continued)
Issued by
Michael Backstrom
~ice President
(To be iMerled by Cal. PUC}
Date Submitted Dee 28, 2022
Effective
Resolution
Jan 1, 2023,
E-5217
Cost Effectiveness Analysis: Existing Single Family Building Upgrades 49 Appendices
California Energy Codes & Standards | A statewide utility program 2024-04-25
-
"
-IVff>ll.~•nCl!'LIILC--
Southem California Edison
Rosemead, California (U 338-E) Cancelling
Revised
Revised
Cal. PUC Sheet No.
Cal. PUC Sheet No.
RA TES (Continued)
Schedule TOU-D
TIME-OF-USE
DOMESTIC
(Continued)
Option PRIME I Option PRIME-CPP
Energy Cllarge -$/kWh/Meter/Day
Summer Season
I De'livery Service
Total'
On-Peak 0.22789 (I)
Mid-Peak 0.22789 (I)
Off.Peak 0.151111 (I)
Winter Season
Mid-Peak 0.23353 (I)
Off-Peak 0.14530 (I)
Super-Off-Peak 0.14530 (I)
Fixed Re<oYery Charge -$'1<Wh 0.00260 (I)
Ba•ic Cllarge -S/MeterJDay 0.427 (I)
EV Meter Crl'cfrt (Sep,arately Met..,ed E (0.323) (N)
EV Submeler Credit -S/Mell'JiDay (0. 111) (R)
Caifomia Climate Credit '0 (71.00)
Caifomia Alternate Rates fo,
Energy Disoount-'-100.00'
Family Electri<: Rate A••istonce Di•cou 100.00
Medical Lile Item Discount -% 100.000
Option PRIME-CPP
CPP Event Energy Charge -$'1<Wh
Summer CPP Non-Event Credit
On.Peak Energy Credit -$/kWh
Maximum AY&ilable Credit -$/kWh"••
Summer Season
Generation
UG" I DWRE~-
0.42769(1) 0.00000
0.15221 (I) 0.00000
0.10162(1) 0.00000
0.38028(1) 0.00000
0.08630(1) 0.00000
0.08630(1) 0.00000
0.80000
(0. 71812) (R)
R~p,es.MtS 100% of the discount peroe,rmge as shown SI the applic.ible Special Condition Qf Bas Schedule.
• • The CflllO'ng Ganpelition T tanSition Charge (CTC) ct (S0.00003) peer kWh is tee:OYered in lhe UG companen1 al Gener.nion.
Sheet 6
I
I
"" The MillCinun Available Credit is lhe capped aedit amount lor CPP Cu5lomers dual p;,rticip;r.ire in other demand response pr __
86132-E
85624-E
I Tcc.,i = Tccal Delivery Servicl' -• are appicable 10 Buncled Service. llRd Acee•• (DA) and Comnunity Choice Aggregation Service (CCA SeMce)
~ exoept DA and CCA SeMce Custome<,; are n01 subject to me DWRBC rate compcnen, ct lhs SdledJle bu! instead pay the DWRBC as
provided by Sche<l.je OA-CRS er SchecUe CCA-CRS.
2 Genera:ion = The Gen me• are ~ Oliy to Buncled SeMce Customers. See Special Condition below for PClA reoovery.
3 O'WREC = Department al Waler Resources (!>WR) Energy C.edit -Fer more information on the DWR Energy Crecil. ""' the Billing Calcw:ion
Special Caiciticn ct this Schedule.
4 Applied on an equal basis. per household, semi-annually. See the Special Conditions of this SchedlAe lor more infonnalion.
(To be inserted by utility)
Advice -'50=-.c.41'--E=-----
Decision -
(Continued)
Issued by
Michael Backstrom
Vice President
(To be inserted by Cal. PUC)
Date Submitted May 30, 2023
Effective Jun 1, 2023
Resolution
Cost Effectiveness Analysis: Existing Single Family Building Upgrades 50 Appendices
California Energy Codes & Standards | A statewide utility program 2024-04-25
-
Caflfomia Edison Revised Cal. PUC Sheet N'o. 85618-E
Rosemead, California (U 338-E) Cancelling Revised Cal. PUC Sheet No. -85109-E
Scbedu;te,D;CABE Sheet 1
CALIFORtNIA AL TERNA TE RA TES FOR ENERGY
DOMESTIC SERVICE
APPLICABILITY
Applicable to domestic service to CARE househofds residing in a pennartenl Single-Family
Accommodation DI' Mul1ifamily Accommodation where the customer meels all the Special Col'\di:tions of
this Schedule. Customers enrolled in the CARE program are not eligible for !he Family Electric Rate
Assistance (FERA) program.
P•ursuartt to Special Coooi1iion 12 herein, customers receiving servioe under this Schedule are e'-olble lo
receive the Califomia Clunate Credit as shown in the Rates section below.
JEBBIIPBY
Wrthin the entire territory s&Ved.
The applicable charges set forth in Schedufe D shall apply to Customers served under this Schedule.
CARE Discount:
A 29.8 percent discount is eppliedl to a CARE Customer's bill prior to the application of lhe Public Utilities
Commission Reimburs.emenl Fee (PUCRF) artd any applicable user fees. taxes. and late payment
charges. CARE Ci.istomers are re.:iuired to :pay the PIJCRF and any .applicable, user fees. taxes. and
late paymertt charges in full. In addition. CARE Customers .are exempt from paying lhe CARE
Surd'large of $0.00888, per kWh aoo the Wildfire Furld Nor..Bypassable Cha:r,ge of $0.00530 per kWh.. (R)
The 2{1.8 percent discount, in additior1 to these exemp1ions result in an average effective• CARE Disco.mt
of 32.5 percenl
(To, be inserted by utility)
Advice 4!977-lE ----------O e c i sio n 23-01--002
lhJ2 22-12•031
(Continued)
Issued by
Michael Backstrom
Vice Ptesident
(To be inserted by Cal. PUC)
Date Submitted Feb 27. 2023
Effective
Resolution
Cost Effectiveness Analysis: Existing Single Family Building Upgrades 51 Appendices
California Energy Codes & Standards | A statewide utility program 2024-04-25
-
utliern California Gas Company
Residential Rates
NoY-23
Procurement Transponallon N&w Rate New Rate Absolute
Customer Type Commodity Rate Charge Charge Elfedlve Elfec11ve Rate % I Rate Schedule Charge Type ¢/therm ¢/therm 111112023 1011/2023 Change Change
Rasklentlal lndlvldually Metered
Schedule No. GR GR BaseDne 67.806 86.490 154296 125.096 29.200 23.3%
Res.SelVlce GR NonBaselne 67.806 131-037 198.843 169.726 29.117 17.2%
GT-R Baselne 00.000 86.490 86.490 87.038 -00.548 -0.6%
GT-R Non Baselne 00.000 131.037 131.037 131.668 -00.631 -0.5%
Cost Effectiveness Analysis: Existing Single Family Building Upgrades 52 Appendices
6.2.3 Southern California Gas
Following are the SoCalGas natural gas tariffs applied in this study. Table 23 describes the baseline territories that
were assumed for each climate zone.
Table 23. SoCalGas Baseline Territory by Climate Zone
Climate Baseline Zone Territory
CZ05 2
CZ06 1
CZ08 1
CZ09 1
CZ10 1
CZ14 2
CZ15 1
The SoCalGas monthly gas rate in $/therm was applied on a monthly basis according to the rates shown in Table 24.
These rates are based on applying a normalization curve to the November 2023 tariff based on ten years of historical
gas data. Long-term historical natural gas rate data was only available for SoCalGas’ procurement charges.27 The
baseline and excess transmission charges were found to be consistent over the course of a year and applied for the
entire year based on 2023 rates. CARE rates reflect the 20 percent discount per the GR tariff.
Table 24. SoCalGas Monthly Gas Rate ($/therm)
Month Procurement Charge
Transportation Charge Total Charge
Baseline Excess Baseline Excess
January $0.72 $0.86 $1.31 $1.92 $2.36 February $0.50 $0.86 $1.31 $1.57 $2.02
March $0.44 $0.86 $1.31 $1.48 $1.93
April $0.39 $0.86 $1.31 $1.39 $1.84
May $0.41 $0.86 $1.31 $1.43 $1.87
June $0.46 $0.86 $1.31 $1.49 $1.93
July $0.47 $0.86 $1.31 $1.51 $1.96
August $0.51 $0.86 $1.31 $1.58 $2.03
September $0.46 $0.86 $1.31 $1.52 $1.96
October $0.45 $0.86 $1.31 $1.48 $1.92
November $0.48 $0.86 $1.31 $1.54 $1.99
December $0.57 $0.86 $1.31 $1.63 $2.08
27 The SoCalGas procurement and transmission charges were obtained from the following site:
https://www.socalgas.com/for-your-business/energy-market-services/gas-prices RES2023.xlsx (live.com)
California Energy Codes & Standards | A statewide utility program 2024-04-25
-
ine Usage: The following quantities of gas used in individually metered residences are to be
billed at the baseline rates:
All Customers:
Summer (May to Oct)
Winter On-Peak (Dec, Jan & Feb)
Winter Off-Peak (Nov, Mar, & Apr)
Daily Therm
Allowance
0.359
1.233
0.692
Cost Effectiveness Analysis: Existing Single Family Building Upgrades 54 Appendices
6.2.4 San Diego Gas & Electric
Following are the SDG&E electricity and natural gas tariffs applied in this study. Table 25 describes the baseline
territories that were assumed for each climate zone. A net surplus compensation rate of $0.04542/ kWh was applied to
any net annual electricity generation based on a one-year average of the rates between December 2022 and
November 2023.
Table 25. SDG&E Baseline Territory by Climate Zone
Climate Baseline Zone Territory
CZ07 Coastal
CZ10 Inland
CZ14 Mountain
The SDG&E monthly gas rate in $/therm was applied on a monthly basis according to the rates shown in Table
26. These rates are based on applying a normalization curve to the November 2023 tariff based on ten years of
historical gas data. CARE rates reflect the 20 percent discount per the G-CARE tariff.
Table 26. SDG&E Monthly Gas Rate ($/therm)
Month Total Charge Baseline Excess
January $2.34 $2.63
February $2.28 $2.57
March $2.21 $2.51
April $2.14 $2.45
May $2.18 $2.48 June $2.23 $2.55
July $2.26 $2.57
August $2.32 $2.62
September $2.26 $2.59
October $2.21 $2.55
November $2.24 $2.57
December $2.38 $2.70
California Energy Codes & Standards | A statewide utility program 2024-04-25
-
,.,,,,..'E
San Diego Gas & Electric Campany
S•n Diego. Calif"'".,
Totell Rates:
Description -JOU DR1
Summer:
On,Pe,k
Olf0Peok
Super Off,Pe>k
Winter.
a.,.P,,:,k
Olf-Ploal<
&Jper Off,Peak
Summer B:,seliM Adju,tmenl C:relfll up to
130% ol B:,seline
Win'ler 803<!lin~ 1u:1,.,stniml Credit up ID
130% ol 8:,seJiM
t.i.,imum Bill (S/day)
Description -JOU DR1-UDC Tot;>!
CARE Rate
Summe.r-CARE lbtes:
O.,,Pe:ik 0.25682
Off0Peok 0.25682
Super Off.J>e•k 0.25682
Winter -CARE Rates :
°'1•Pe•k 0.43739
Olf,Pe;ak 0.43739
Super Off•Pe•k 0.4-1739
Summer B~~ine
Ad),slm"'1l Cradil up ID
130% ol Bueline
(0.117241
Win'le-r B.iseline Adju!1itme11l
C:n,rfit up ID 110% cd
Ba~fine
[0.11724►
taii1T11Jm Bill ($/day) 0.190
Note:
Revised CaL P.U.C. Sheet No.
Canceling Revised CaL P.U.C. Sheet No.
SCHEDULE 10ll-OR1
RESIOENrTIAl TIME-OF-USE
lJOC Total Rau DWRIBC• E:ECC IR.ato ♦
Wl'.t.lBC DWR Cn,dat
0.25752 R 0.00530 I 0.57043
0.25752 R 0.00530 I 0.25697
0.25752 R 0.00530 I 0.09233
0.43809 I 0.00530 I 0.19307
0.43809 I 0.00530 I 0.10855
0.4-3809 I 0.00530 I 0.08402
(0.11724) R
(0.11724) R
0.380 I
DWRBC+ EECCRate • T,ot•I
WF-NBC DWR.Cnodlt IR:alo•
R 0..00000 0.57043 I 0.82725
R 0.00000 0.25697 I 0.5137!1
R 0..00000 0.09233 I 0.34915
I 0.00000 0.19307 I 0.630441
I 0.00000 0.10855 I 0.54594
I O.QOOOO 0.08402 I 0.52141
R (0.11724)
R (0.11724)
I ,0.190
[
[
[
[
[
[
37022-E
36337-E
Sheet 2
Total
Rai-e
0.33326 I
0.51979 I
0.35515 I
0.63646 I
0.55194 I
0.52741 I
(0.11724) IR
(0.11724) It
0.380 I
Total
Effedive
,care ltllte
l 0..55366 l
I 0.33'965 I
l 0.22725 l
I O.A1930 I
l 0..36160 l
I 0..34485 I
R (0.08004) R
R (0.08004) R
I 0.190 I
(1) Jai,,f R>""' ax,,isl ol LDC, Schedul~ D\'/R-8C (Ol!Jl•rtml!nll ol W:,1i,r Re,..,..101!< Bond Cll:iri,,I, Sdled.JI!! WF -HBC (CA Wldfre
Fund d!"'JliO) and SdledJI!! EEOC~ Eneogy Commoditt Casl) r.sles, ,,.;th 'lho EECC rote• relledi~ .a DWR Cledtt. EECC rarles
""' ;>pplicobh, IO t:undl!!d OJ.tomen only Sae Special CondlllOn HI b POIA (Fl'o,,o.., ct...rg~ ~iWerence Adju.aiier11) reC:Jve<y.
(2) Talal R•tes p,esenli:d ...e lor w,slcmen !hat reooiYe commocily ~ ""d dewory """'°' rromUIJily.
(l} DWR-8C •nd WF,NllC chorgos do not apply lo CARE ru,lomo,rs.
(4) As idenb6oil 11 11,a RIies labh,s., amomer bih ..,11 also jncl,di, lim,oi,em •llllTVller ,.r,d winier medtts lo< ll»fl'! lljl ID 130111 of
ba2line ID prDWGe Iha ral<! cappmg banefils nd~d by Assembly Bill lX and Senllle Bil 1195-.
(6} WF •N'BC r•te is 0.00630 • DWR-BC 8ond °'"'9" is 0.00000 .
Continued.
2C8 ISasued by Submitted Dec 30, 2022
Advice Ur. No. 4129-E Dan Skopec Effective Jan 1. 2023
Seflior Vioe Presidenl
Decision Na. R.egu1atary A.ffai-s Resolrtion No. E-5217
R,I
Cost Effectiveness Analysis: Existing Single Family Building Upgrades 55 Appendices
California Energy Codes & Standards | A statewide utility program 2024-04-25
-
Time Periods
All time periods listed are applicable to local time. The definition of time will be based upon the date service
is rendered_
TOU Periods -Weekdays
On-Peak
Off-Peak
Super Off-Peak
TOU Period -Weekends and
Holidays
On-Peak
Off-Peak
Super Off-Peak
Seasons: Summer
Winter
Summer
4:00 p_m_ -9:00 pm_
6:00 a.m. -4:00 p.m.;
9:00 p.m. -midnight
Midnight - 6:00 a.m.
Summer
4:00 o.m. - 9:00 o.m.
2:00 p_m_ -4:00 p.m.;
9:00 p.m. -midnight
Midniqht -2:00 p m.
June 1 -October 31
November 1 -May 31
Winter
4:00 p_m_ -9:00 p_m_
6:00 a.m. -4:00 p.m.
Excluding 10:00 a.m. -2:00 p.m. in March and April;
9:00 p.m. -midnight
Midnight - 6:00 a.m.
10:00 a.m. -2:00 p_m in March and April
Winter
4:00 o.m. - 9:00 o.m.
2:00 p.m. -4:00 p.m.;
9:00 p.m. -midnight
Midnight -2:00 p_m_
15. Baseline Usage: The following quantities of electricity are used to calculate the baseline adjustment
credit.
Baseline Allowance For Climatic Zones•
Coastal Inland Mountain Desert
Basic Allowance
Summer (June 1 to October 31) 9.0 10.4 13.6 15.9
Winter (November 1 to May 31) 9.2 9.6 12.9 10.9
Alli Elecmic,..
Summer (June 1 to October 31) 6.0 8.7 15,2 17.0
Winter (November 1 to May 31 ) 8.8 12.2 22.1 17.1
" ""
a lmatic Zones are shown on the Tenilory Served, Map No. 1.
All Electric allowances are available upon appEcatlon to those customers who have permanently Installed
spaoe healing or who have electrlc water heating1 and receive no enes-gy from another source.
Cost Effectiveness Analysis: Existing Single Family Building Upgrades 56 Appendices
California Energy Codes & Standards | A statewide utility program 2024-04-25
-
....,.f
San Diego Gas & Elecbic Company
San Diego, California
Revised CaL PU.C. Sheet No. 37217-E
Canceling Revised CaL PU.C. Sheet No. 37016-E
SCHEDULE EV-TOU-5 Sheet 1
COST-BASED DOMESTIC TIME-OF-USE FOR HOUSEHOLDS WITH ELECTRIC VEHICLES
APPLICABILITY
Service under this schedule is specifically limited to customers who require service for charging of a currently
registered Motor Vehicle, as defined by the California Motor Vehicle Code, which is: 1) a battery electric
vehicle (BEV) or plug-in hybrid electric vehicle (PHEV) recharged via a recharging outlet at the customer's
premises: or 2) a natural gas vehicle (NGV) refUeled via a home refueling appliance (HRA) at the customer's
premises. This schedule is not available to customers with a conventional charge sustaining (battery
recharged solely from the vehicle's on-board generator) hybrid electric vehicle (HEY).
Residential customers taking service on Schedule NBT, who are required to utilize EV-TOU-5 as their
otheiwise applicable schedule (OAS) for electric service, do not require a qualifying motor vehicle, as
described above to participate on Schedule EV-TOU-5.
Customers on this schedule may also qualify for a semi-annual California Climate Credit $(60. 70) per Schedule GHG-ARR.
TERRITORY
Within the entire territory served by the utility.
Total Rates:
UDC Total DWRBC+ Description -EV-TOU-S Rates Rate WF-NBC
Basic Service Fee 16.00
Summer
On-Peak 028032 I 0.00530
Off-Peak 0.28032 I 0.00530
Super Off-Peak 0.05588 I 0.00530
Winter
On-Peak 028032 I 0.00530
Off-Peak 028032 I 0.00530
Super Off-Peak 0.05588 I 0.00530
1C5
Advice Ur. No. 4154-E
Decision No. D.22-12-056
EECC Rate +
DWR Credit
I 0.53067 I
I 0.19567 I
I 0.09233 I
I 0.22587 I
I 0.16213 I
I 0.08402 I
Continued
Issued by
Total
Rate
16.00
0.81629 I
0.48129 I
0.15351 I
0.51149 I
0.44775 I
0.14520 I
Submitted
Effective
Resolution No.
Jan 30, 2023
Mar 1, 2023
N
N
N
Cost Effectiveness Analysis: Existing Single Family Building Upgrades 57 Appendices
California Energy Codes & Standards | A statewide utility program 2024-04-25
-
....,,/E Revised Cal. P.U.C. Sheet No_
San Diego Gas & Electnc Company
San Diego, Cal~omia Canceling Revised Cal. P.lJ.C. Sheet No. 35912-E
SCHEDULE EV-TOU-5 Slleet4
COST-BASED DOMESTIC TIME-OF-USE FOR HOUSEHOLDS WITH ELECTRIC VEHICLES
Notes: Transmission Energy charges indude the Transmission Revenue Balancing Account Adjustment (l;RBAA) of
S(0.00242) per kWh and lhe Transmissicm Access Charge Balancing Account Adjustment (TACBAA) of S(0.01631) per
kWh. PPP Energy charges includes Low Income PPP rate (LI-PPP) S0.01669/kWh, Non-low Income PPP rate (Non-U
PPP) S0_00333"'Wh (pursuant to PU Code Section 399.8, lhe Non-LI-PPP rate may not exceed January 1, 2000 levels),
Procurement Energy Efficiency Surcl\arge Rate of SQ.00422 /kWh, Galifom1a Solar lnrtiative rate (CSI) of $0.00000/kWh
and Self-Generation Incentive Program rate (SGIP) $0.00122/kWh. The basic service fee of $16 per monlh is applied to a
customer's bil and a 50% discount is applied for CARE, Medical Baseline, 0< Family Electric Rate Assistance Program
(FERA) customers resumng in their basic service fees to be SB per monlh.
Rate Components
The Utility Distribution Company Total Rates (UDC Total) shown above are comprised of the following
components (if applicable): (1) Transmission (Trans) Charges, (2) Distribution (Distr) Charges, (3) Public
Purpose Program (PPP) Charges, (4) Nuclear Decommissioning (ND) Charge, (5) Ongoin9 Competition
Transition Cnarges (CTC). (6) Local Generation Charge (LGC), (7) Reliability Services (RS), and (8) the
Total Rate Adjustment Component (TRAC).
Certain Direct Access customers are exempt from the TRAC, as defined in Rule 1 -Definitions.
Franchise Fee Differential
A Franchise Fee Differential of 5.78% will be applied to the monthly billings calculated under this
schedule for all customers within the corporate limits of the City of San Diego. Such Franchise Fee
Differential shall be so indicated and added as a separate item to &ills rendered to such customers.
Time Periods:
All time periods listed are applicable to actual "clock" time)
TOU Period -Weekdays Summer Winter
On--Peak 4:00 p.m. -9:00 p.m. 4:00 p.m. -9:00 p.m.
b:w a.m. -4:UU p.m.
Off-Peak 6:00 a.m. - 4:00 p.m.;
9:00 p.m. -midnight Exduding 10:00 a.m.-2:00 p.m.in March and April;
9:00 p.m. -midnight
Super-Off-Peak Midnight -6:00 a.m. Midnight -6:00 a.m.
10:00 a.m. - 2:00 p.m. in March and April
I uu t"enuu -vveeKenas Summer Winter and Holidays
On--Peak 4:00 p.m. - 9:00 p.m. 4:00 p.m. - 9:00 p.m.
Off-Peak 2:00 p.m. - 4:00 p.m.;
9:00 p.m. -midnight
2:00 p.m. - 4:00 p.m.
9:00 p.m. -midnight
Super-Off-Peak Midnight -2:00 p_m_ Midnight -2:00 p_m_
Seasons:
Summer June 1 -October 31
Winter November 1 -May 31
Continued
4C8 Issued by Submitted Dec 30, 2022
Advice Llr. No. 4129-E Dan Skopec Effective Jan 1, 2023
Senior Vice President
Decision No. Regulatory Affairs Resolution No. E-5217
R,R
I
R
I
I
Cost Effectiveness Analysis: Existing Single Family Building Upgrades 58 Appendices
California Energy Codes & Standards | A statewide utility program 2024-04-25
-
-f
s.., Die90 Gas & Elecliic; Cttnpan)'
San Diego. califmria
Orjglnel Cal. P.U.C. Sheel No. 37195-'E
Canceling Cal. P.U.C. Sheel No.
SCHEDULE TOU-ELIEC Sheet 11
DOMEST1IC llt,IE-OFJUSE FOR HOI..IS8HOLOS Wln-t ELECTRIC VEHICUES. ENERGY STORAGE.
OR !ELECTRIC HEAT Pll!Jt.tPS
ARPLICABILllY
Service under this scl'ledul'e is available on a volun1ary basis. for all resiidential ruslomBfS who meet one or
more of Iha tollowing c~eria: 1) require sernce for clhargin,g or a currenlly ragislarad Motor Va'hida. as
de'1ned by the California Motor Vehicle C-ooe, 'Whkh ris: a) a battery el.ectric VBhlcle (BEV) or plug-,ln hybrid
eleciric ve:hicle (f>HEV) recharged via a recharging ou1Jet at the customer's premises: or b) a natural gas
\lehide (NGV) refoeled I/fa a home rerualing appliance (HRA) al 11\e customer's premises; 2) have a bahind
lhe-miiler energy storage device th.at is intsrconnecied through Elednie Rule 21; or 3) have an electric heat
pump •for water lhaatlng or climate controL This sc'had ule iS not available to customa-rs with a conventional
charge sw;taining (battery teeharged solsly from, the vehicle"s on-board generatot) hybrid a!iicittic vehidle
(HEV).
This schedule is also available lo, customers who meet ll'le above criteria ,as wel as quality for lhe California
Alla-mate Rates for Energy {CARE) Program as outline<I in Schedule E-CARE, and/or Medical IBasa!ine as
oullineo in Special Conchoon (SC) 5. The ra!es for CARE customers anc:llor Medical IBas8line are ident.-lild in
lhe rate rabies below as TOU-ELEC-CARE and TOU-8LEC-MB rates. respectiv1tty.
lbiire is a cap of 10,00CI customers w'ho may take service on lrns rats. as d.e6ned rn SC 10.
Pu.rsuant to, o .22-·11-022. customilrs that opt-in to seheduta TOU-ElEC Within its fust year or b8in9 offered
have the qplion to return to lheir previous rate sdledule prior lo lhe 12-month imquiremenL See $C4 Tern,s
or SGl'\rioe lor al requuaments.
CtJstomM; on Ill.is schedule may also qualify re, a sem..a.nnual California Cllmate Credit $(611'.70) per Sdiedu.e
GHG-ARR.
iERRJTORY
Within lhe entire terrilory seNed by lhe utility.
RATES
Total Rates:
lltiotiptian-TOU-.El.EC Rams UDCTOUI DWRBC•
R.al1> WF0N8C
Mcn!hty SeMCB f;ee 18..00
Summer
On-Pmk D.22228 0.00530
011°Pmk 0.22228 0.00530
Super Off~""k 0.22228 0.00530
WJnter
O..,Peak 0.22228 0,00530
Oll>Pmk 0.22228 0.00530
Super Off~""k 0.22228 0,00530
tH6
Adw:e Ur. No. 4152-E
OedSIOfl No. 0.22-11-022
EECC Riite
0.61588
0.14644
0.09785
0.27480
0.13323
0.08905
Conlin11ed
Issued by
T-
Rate
18.00
0.74328
0.3740:2
0.32543
0.50218
0.36081
0.31663
Submitted
ElfeciJve
Resolution l'lo.
Jan 31. 2023
Jan 31. 2003
N
N
N
N
Cost Effectiveness Analysis: Existing Single Family Building Upgrades 59 Appendices
California Energy Codes & Standards | A statewide utility program 2024-04-25
-
San Diego Gas & Elecrric Canp;any
San IJiesa. ~rcrri.s
Original
Canoe.ling
CaL P.U.C. Sheel No.
CaL P.U.C. Sheel No.
SCHEDULE TOU-ELEC
37196-E
Sheet 2
DOMESTIC TIME-OF-USE FOR HOUSEHOLDS Wllll ELEC1RIC VEHICLES. ENERGY STORAGE.
OR ELIECTRIC HEAT PUMPS
.BAIES. ·(Contiru.ie<J)
Description -TOU,E:LE.C CARE UDC Toial DWRIIIC ♦ TO!lal Tow
EEOC Fttu, Eff;;ctl.,. Rates Rat,, WF.JiBC Rm CARERm
Monlhly SeMCe Fee HUX! 16.00 16.00
Summer -CAR,E Rates:
OII.P<>ak 0.221158 0.00000 0.515611 0.73726 0 .. 49222
Qa.P""k 0.221158 0.00000 0..14644 0.36Ml2 0.2401!
&l"'f Ofl.P,ea 0.22158 0.00000 0..09735 0;31943 0.20698
Winter-CAAE Rates:
a,,,p,.,,k 0.221158 0·.00000 0.27480 DA9618 0.32763
Cla.PRl< 0.221158 0,00000 0..13323 0.35481 0.23U1
s.,""' Otl,.Pea 0.221158 0,00000 0..08905 0.31063 0.201195
Description -TOU,E:LEC MB UDC Total DWRIIIC • Total Tow
EECC Rat,i, Elf6ctM MB Rates Rat,, WF-HBC Raia -· Monlhly SeMCe Fee HI.DO 16.00 16.00
Summer -MB Rates:
o,,,p..,,, 0.22228 0,00000 0.515611 0.73796 0.59037
Qa,P.,.ak 0.22228 0.00000 0..14644 0,38872 0..29498
s.,""' Ofl.Poa 0.22228 0.00000 0..09735 0:32013 0.251110
Winter -MB Rates:
a,,.p..,,, 0.22228 0.00000 0.27480 OA96118 0.39760
Qa.Pe.il< 0.22228 0.00000 0..1332:3 0-35551 0.28441
Silp<!f QIW'<,al 0.22228 0.00000 0.08905 0.31133 0.24906
Noll!:
(1) Toltlt Rates oo,.,,is1 d UOC. &hodiJi<-OWR.SC {~ cl W:tr.t Re"'°1le5 Bcnl Ctwg,,). Schedule \'IF.NBC (CA 'Mklft"'
FLnf chag!!) and Sdled:Jle· E:ECC jElec:lric Ens9)' Canm:xfily CMQ ral!ts. EECC rai..s .,., "l'f'lica~ II, bundl!,d cummon t11ly.
SeeSp:dal Ooodilla, 9roi PCIA(P<lWer Cliar~ ~hljustmenl) """'Yefl'•
(2) T olOI Roil!s P"'""""'d ,.,., lbt __,,,., lhai ...,.,;,,, oormncxliiy "'4'f'ly and di!lw,ry ~ llom UBty. o..,.,rces in tmt.ol r,,11,s
paid by Oiled! AazS> (DA) an! Canrrunity O!aice Aggr9bDn (OCA) aJslameB ""' i:!,ntifrod in Sdledi.e llA.CRS and OCA.
CRS, ,,,,spec•,.;,.
($) DWR<BC a,d WF-NBC chorg,,s do not a.l'\lly lo CA.RE or Medical B:ISl!line """1<lrlH!n.
(4) ltW"-"IBC raleis0Jl0530 + C111/R.SC BandOusg,, is 0.00000
2HS l!lsued by
Adw:e Llr. No. 4152-E
DeclSiOO No. D.22-1i~
Submitted
Effective
Resolution No.
Jan 31. 2023,
Jan 31. 2023
N
N
N
N
Cost Effectiveness Analysis: Existing Single Family Building Upgrades 60 Appendices
California Energy Codes & Standards | A statewide utility program 2024-04-25
-
llio(IO G.,s & IElecbic Cmnp,o11J
S.m Dw,go. Califmna
Orlglnel
Canceling
Cel. P.U.C. Sheet No.
Cel P U C Sheet No ..
SCHEDULE TOl!J-ELEC
37197-E
Sheel3
DOMESTIC TIME-OF-USE FOR HOUSEHOLDS Willi ELEClRIC VEHtCLES, ENERGY STORAGE,
RATES (CONTINUED)
UDC RalH
Oe5U11flm -Trmism Distr JOU-El.EC
MonlNyS-fN 18-CIO 1$11.kl)
StJmmer.
On.P .. .u 0.07340 0.10796
Ol.f'e-ak 0.07340 D.10796
~pe,OM'eak 0.07340 0.10798
Winur.
On.f' .. .u 0.07340 0.10796
OI.P .. .u 0.07340 0.10796
&ipe,Otf.l'l,al 0.07340 0.10798
Dastnplian -
TOU-ELEC • CARE Transna Dlsb:
Ribls
~S-fN
lll1.kl ,a..oo
S<Jmnl«C-6!RiE
lblle3:
On.f'e;;k 0.07340 0.10726
OI.P..,;,k 0.07340 0.10726
&!per Ot!.l'l,al 0.07340 0.10726
W111~r ~I! Rain:
On.f'-l!'ak 0.07340 0.10726
Ol-k 0.07340 0.10726
&ipe,Ot!.1'1,a 0.07340 0.10726
Deoacr(pllon -
TOU-ELEC • l&S -T~m Dlsb:
~ SeNi>I f.M 16,.00 15'1.kl))
5.,....,,.. -MB-Ral<l,o
On.f'-1!'.u 0.073-44) 0.107911
OI.P ... ak 0.073-44) 0.107911
&iper Ot!.1'1,-. 0.073441 0.107911
W.inucr ,. M:B R:iltas
On.P ....... 0.073441 0.107911
Ol.f'!!cl 0.0~ 0.107911
&i.per Ot!.1'1,a 0..073-44) 0.107911
3Htl
Adwce Llr. ND. 4152-E
Decision No. 0.22-11-022
OR ELECTRIC HEAT PUMPS
PPP ND CTC
D,02548 0.00007 0.00153
0,02546 0.00007 0.00153
0,02546 0.00007 0.00153
0,02546 000007 0.00153
0·,02548 000007 0.00153
0,02548 000007 0.00153
PPP ND CTC
0.02548 0•.00007 0.00153
0.02548 0.00007 0.00153
0.0254t 0.00007 0.00163,
0.0254t 0.00007 0.00153,
0.02548 0.00007 0.00163,
OJl2546 0.00007 0.00163,
PPP ND CTC
0.0254t 11.00007 0.00153,
0.0254t 11.00007 0.00163,
0.0254t 0.00007 0.00153,
0.02548 0.00007 0.00163
0.0254t 0.00007 0.00163
0.0254t 0.00007 0..00153
(Cootlnuedl
l~!IUl!d by
LGC RS
0.01383 0.00000
0.01383 0.00000
0.01383 0.00000
0.01383
0.01383
0.01383
ILGC
0.01383
0.01383
0.01383
0.01383
0.01383
0,01383
1LGC
0.01383
0.01383
0.01383
0.01383
0.01383
0.01383
0.00000
0.00000
0.00000
R:S
0.00003
0.00003
0.00003
0.00003
0.00000
D..00003
R:S
D..00003
0.00000
D..00003
D..00003
D..00003
D..00003
Submitted
Effective
TRAC
0.00000
0.00000
0.00000
0.00000
0.00000
0.00000
TRAC
0.00000
0.00000
0.00000
0.00000
0.00000
0.00000
TRAC
0.00000
0.00000
0.00000
0.00000
0.00000
0.00000
Resolution No.
uoc
Total
18_()1)
0.22228
0.22228
0.22228
0.22228
0.22228
0.22228
UDC
Toial
16..00
0.22161!
0.22161!
0.22161!
G.22161!
Q.22161!
0.22161!
UDC
Total
16..00
D.22228
G.22228
0.22228
0.22228
G.22228
0.22228
Jan 31. 2023
Jen 31. 2023
N
N
N
N
Cost Effectiveness Analysis: Existing Single Family Building Upgrades 61 Appendices
California Energy Codes & Standards | A statewide utility program 2024-04-25
-
l Cel. P.U.C. Sheet No. 37198-E
Canceling Cel. P.U.C. Sheet No.
SCHEDULE TOU-ELEC Sheel4
DOMESTIC TIME-OF-USE FOR HOUSEHOLDS WITl·t ELEClRIC VEHICLES. ENERGY STORAGE,
OR ELECTRIC HEAT PUMPS
Note..: Tran!lrrl!l!IIOM, Energy i:narges linmJCle he Transmission R'e~ Balancing Acoan Adjuslrmnt (TRBAA) al
${0.oo2A2) per kWh and lhe Transml!ism Aooesa Charge Balan~ Aa:ol.lll f141as~ (TACSAA) of $(0.01631) per
kWh. PPP EnEfllY charges~ law Income PPP ra11! (LI-PPP) S0.01668/k:Wh, Non-low lnoome PPP rera (Non-U
PPP) S0..0033JJkWh (pursuant 1D PU Code Section 399.8. lhe Non-4..1-PPP ra1a may not exceed Ja,uary 1. 2000 levels).
Procurement Energy 6flcieocy SWdlerge, Rate of $0.00422 /kWh, California Soler tnitia11ve rate (CSI) cl $0.0000MWh
and Self.Generabo11, Incentive 1Pr<9am rate (SGIPj $0.00122/kWh.
Rate Component$ The Utility 0islribu'liion Company Totall IRates (UDC Total) shown above are comp,rised c:11 the ldllowing
components (ii appUcabJe): (1) Transmission (Trans) Charges, (2) Distlib<Ulion (Dislt) Oiarges.. (3) Public
P,wpose Program (PPP) Charges .. (4) Nuclear Oooommissioning (ND) Charge, (5) O"-)oin,g Competition
Tratwlion Charges (CTC), ·(6) Local Genetalion Chat9e (LGC). (7) Reliability Services (RS), and (8) lhe
Total Rate Adjustm811lCornponent (llRAC).
Certain DilectAocess.customers are !Hlempt from lhe TRAC, M def111ed in Rule 1 -Daf111ilions ..
EcaOdlist fee Piftere01,;a1
A Franchi:se Fee Differential of 5. 78% wiD be applied lo Iha monthly billings calculaled under 'thiss schedule
ror all custome<:s wilhin Ille oorporate limits ol lhe City or San Diego. Suc:11 IFfaochiH Fee Differential shall
be so indicated a.nd added as a separale [tern lo bills rendered to sudh cus'klmer!;.
Tlma Periods:
All time periods listed are applicable Lo actual "dock" lime)
TOU Period -Wae'kdayt; SummBf Wini.er
On-Peak 4i00 Ip.m. - 9:001rn;_ 4:00 p.m. -9i00 p•.m.
16:00a..m. -4:00p•.m. 6:00 a.m. - 4:00 p.m,; Off.P-eak 9~00 Ip.m. -midnighl Exdlidin,g 10:00 a.rn.-2:00 p.m.i:n Marth aoo April;
'9:00 p.m. -midnight
Midnight - 6:00 am. Super-Off.P1tak Midnight -6:00 rum. 10:00 ajm. -2:00 p.m. in March andAprli
TOU Penod -Weekend~ SummBf and Holidays
On..f>-eak 4i00 Ip.m. - 9:00 p.m, 4:00 p.m. -9:00 p•.m.
Ott-Peak 2l00 Ip.m. - 4:00 p.rn,; 2:00p.m. - 4 :00 p-.rn.
9~00 Ip.m. -midnighl '9:00 p.m. -midnight
Super-Off..P1tak Midnigh.t -2:00 p.m. Midnight - 2:00 p.rn.
Seasons;
Summer June l -Odober 31
Winter Novernber 1 -May 3-1
Continued
4H1 Issued by
Adw:e Llr. No. 4152-E
D.22-tt-022
Winl8r
Submitted
Effective
Resolution No.
Jen 31. 2023
Jan 31. 2023
N
N
N
N
Cost Effectiveness Analysis: Existing Single Family Building Upgrades 62 Appendices
California Energy Codes & Standards | A statewide utility program 2024-04-25
-
•1111111/E Revised Cal. P.U.C. Sheet No.
San Diiago Gas & Electric Company
San Diego, Califomia Canceling Revised Cal. P.U.C. Sheet No.
APPLICABILITY
SCHEDULE E-CARE
CALIFORNIA AL TERNA TE RA TES FOR ENERGY
35718-E
32576-E
Sheet 1
This schedule provides a California Alternate Rates for Energy (CARE) discount to each of the
following types of customers listed below that meet the requirements for CARE eligibility as defined
in Rule 1, Definitions, and herein, and is taken 1in conjunction with the customer's otherwise
applicable service schedule.
1) Customers residing in a permanent single-family accommodation, separately metered by
the Ullllty.
2) Multi-family dwelling units and mobile home parks supplied through one meter on a single
premises where the individual unit is submetered.
3) Non-profit group living facilities.
4) Agricultural employee housing facilities.
TERRITORY
Within the entire territory served by the Utility.
DISCOUNT
1) Residential CARE: Qualified residential CARE customers will receive a total effective
discount according to the following:
2015 2016 2017 2.018 2019 2020 and
beyond
crrect1ve 40% 39% 38% 38% 36%R 35% Discount
1C5
Pursuant to Commission Decision (D.) 15-07-001, the average effective CARE discount for
residential customers will decrease 1% each year until an average effective discount of
35% is reached in 2020.
The average effective CARE discount consists of: (a) exemptions from paying the CARE
Surcharge, Department of Water Resources Bond Charge (DWR-BC), Vehld e-Grid
Integration (VGI) costs, and California Solar !Initiative (CSI); (b) a 50% minimum bill relative
to Non-CARE; (c) the California Wildfire Fund Charge (WF-NBC) and (d) a separate line-T
item bill discount for all qualified residential CARE customers with the exclusion of CARE
Medical Baseline customers taking service on tiered rates schedules. D.15~07-001
retained the rate subsidies in Non-CARE Medical Baseline tiered rates and thereby a
separate line-item discount is provided for these GARE Medical Baseline customers
Continued
Dec 30, 2021
Advice ltr. No. 3928-E
Issued by
Dan Skopec
Submitted
Effective Jan 1, 2022
\/if"Q PrP---t;i.if'tir;,nt
Cost Effectiveness Analysis: Existing Single Family Building Upgrades 63 Appendices
California Energy Codes & Standards | A statewide utility program 2024-04-25
-Cost Effectiveness Analysis: Existing Single Family Building Upgrades 64 Appendices
6.2.5 City of Palo Alto Utilities
Following are the CPAU electricity and natural gas tariffs applied in this study. The CPAU monthly gas rate in
$/therm was applied on a monthly basis according to the rates shown in Table 27. These rates are based on applying a
normalization curve to the October 2023 tariff based on seven years of historical gas data. The monthly service charge
applied was $14.01 per month per the November 2023 G-1 tariff.
Table 27. CPAU Monthly Gas Rate ($/therm)
Month G1 Volumetric Total Baseline G1 Volumetric Total Excess
January $1.83532 $3.35639
February $1.38055 $2.59947
March $1.32506 $2.47695
April $1.29680 $2.44038 May $1.29511 $2.43804
June $1.32034 $2.45406
July $1.35688 $2.61519
August $1.40696 $2.67944
September $1.42130 $2.70301
October $1.42310 $2.48300
November $1.46286 $2.45547
December $1.62415 $2.62128
California Energy Codes & Standards | A statewide utility program 2024-04-25
-
. APPLICABILITY:
RESIDENTIAL ELECTRJC SERVICE
UTILITY RATE SCHEDULE E-1
This Rate Schedule applies to separately metered single-family residential dwellings receiving
Electric Service from the City of Palo Alto Utilities.
B. TERRJTORY:
This rate schedule applies everywhere the City of Palo Alto provides Electric Service.
C. UNBU DLED RA TES:
Per kilowatt-hour (kWh) Commodity
Tier l usage
Tier 2 usage
Any usage over Tier l
Minimum Bill ($/day)
D. SPECIAL NOTES:
$ 0.09999
0.13873
I. Calculation of Cost Components
Distribution Public Benefits
$ 0.06954 $ 0.00568
0.10225 0.00568
Total
$ 0.17521
0.24666
0.4181
The actual bill amount is calculated based on the applicable rates in Section C above and
adjusted for any applicable discounts, surcharges and/or taxes. On a Customer's bill
statement, the bill amount may be broken down into appropriate components as calculated
under Section C.
2. Calculation of Usage Tiers
Tier I Electricity usage shall be calculated and billed based upon a level of 11 kWh per
day, prorated by Meter reading days of Service. As an example, for a 30-day bill, the Tier
I level would be 330 kWh. For further discussion of bill calculation and proration, refer
to Rule and Regulation 11.
ClTY OF PALO ALTO UTILITIES
Issued by the City Council
Supersedes Sheet No E-1-1
dated 7-1-2022
O CITYOF
PALO A LTO
UTILITIES
{End}
Sheet o E-1-1
Effective 7-1-2023
Cost Effectiveness Analysis: Existing Single Family Building Upgrades 65 Appendices
California Energy Codes & Standards | A statewide utility program 2024-04-25
-
Firm Service Rates
A. Tim.,..,r-D•;v (S-ll p.m.) R•le
Residential Time-of-Day Service
Rate Schedule R-TOD
•l'rf'.ctiwlt!I ul O'htlle Id J Of'ttlhir•li ul El'kct.lw u at fflntiwn u/
h■uryl.lOU JJtns· I.JU• .\1a\'1.2•u J101uar, l.lGlS ~b,d.2015
IHIIMG!MINl5lh
Nu•S•nantr Stbun (Octohn-• M:ty)
s,1 lfnl lntraslrvcru.rt fl....ed Clriilrlt prr ""1fl ,A p#!'rlM.tU
lltt1rlcii1~1 l.lt-f'O.artt
P.,l$/lH~
Off.Peak SIi H"'
Summer SrbOd (June-• Sep1mftr}
S~'Jltrd lntrascrucru.rt fi.1.-ed('kartt pb' "'°'1tA pn-mnu
ll«lril"i.l~ 11'11(t.t Cliara.e
P.,l$/1H~
Mod-l',,ak$/Hll
Off.Peak Sil it•
B. Optional Critical P~'8k Pricing Rate
m.so $24.IS $24.llO W.30
SO.ISO SO.Im S0.16" $0.1678
S0.1120 $0.IISI S0.1183 S0.1215
m.so $24.IS $2◄.llO $2S.$0
SO.l-"79 S0.33<,9 S0.3462 $0.JS57
$0.11164 $0.1914 $0.1967 $0.2001
$0.13$0 S0.1387 SO. 14:!S $0.1464
I. The CPP R.ale base prices per time-or-<lay period arc lhe same as lhe prices per time-or-day period for TOD (S--8 p.m. ).
2. The CPP Ra1e prosidcs o discount per kWb on the Mid-Peak and Off-Peak prices during summer months.
3. During CPP EvenlS. customers will be charged for ""''llY used 31 the applicable Li~r-<lay period rate plus the CPP
Ralc Event Price per k \l.'h :as :sho"'TI on www .srnud._org..
$26.20
$0.17'..A
$0.1248
$2t,.20
$0.36S5
$0.2077
$0.ISQS
4. During CPP EvenlS. energy exported lo the grid will be compensated al the CPP Rate Event Price per kWh as shown oo
www.smud.org..
S. The CPP Rale Event Price and discount will be upda1ed annu.ally al SMUD's discn,1ion and posted on www.smud.org.
C. Plug-In Ell-d ric Vehicle CndH (r•k cafl-gorin RTOl and RTCI)
Thi!i credit is for l"Qidcntia.l customcn. who have a licensed passenger battery electric plug-in or plug-in hybrid dt'Clric ,·chide.
Cred.iL applies lo all clcclricity usage charges from midnight to 6,00 a.m. daily.
Electric Vehicle Credit.. ........................................................ -$0.0ISOlkWh
Ill. Electricity Usage Surcharges
Refer to the follo\\'Jng rate schedu1es for details on these: surcharges_
A. Hydro Gcnr•tion Adju5fmenl (HCA). Refor to Rate Schedule HGA.
IV. Rate OpUon Menu
A~ E:ntrgy A.ni5htncc Pn~nm Ride. Refer to Rate Schedule EAPR.
B. Medi0tl Equipmtnt Di,count Program. Rder to Rate Schedule MED.
C. Joint Participation in MnliCJiJ Equipment Di~unt a nd Encr-gy Assi!!itance Pl"o-gr:iim Rate. Refer lo Rate Schedule
MED.
SACRAMENTO MUNICIPAL UTILITY DISTRICT
Resolution No. 23-09.09 adopted September 21, 2023
Sheet No. R-TOD-2
Effective: September 22, 2023
Cost Effectiveness Analysis: Existing Single Family Building Upgrades 66 Appendices
6.2.6 Sacramento Municipal Utilities District (Electric Only)
Following are the SMUD electricity tariffs applied in this study. The rates effective January 2023 were used.
California Energy Codes & Standards | A statewide utility program 2024-04-25
-
. 11,ne-of-Da~ (5--8 p.m.) Rate (r111e category RT0-2)
1. The TOD (5-8 p.m.) Rate is tbe standard rate for SMUD's res_idential customers. Eligjble customers can elect the fixed
.Rate under Rate Schedule Ras an alternative m1e.
2. The TOD (5-8 p.m.) .Rate is an optional rate for cm,tomers who have an e-ligible renewable electrical generation facility
under Rate Schedule NEM I that was approved for installation by SMUD prior 10 January I, 2018.
3. This rate has five kilowan-h.ou:r (kWh) prices, depending on rhe rime-of-day and season as shown below. Holidays are
de10iled in Section V. Conditions of Service.
Peak Weekdays be1ween 5:00 p.m. and 8,00 p.m.
Summe:r Mid-Pe11J.: Weekdays between noon and midnight ex.cept d'uring lhe
{JUl'I E -Sept 30) Pe.ak hours.
Off-Peak All other hours, including weekerids and '1olidays1.
on-Sommer Peak Weekdays belween 5:00 p.m. and 8,00 p.m.
(Ocl l -May JIJ Off-Peak AH other hours, including weekends and holidays1.
1 See Section V. Condi1ion:s of Service
Cost Effectiveness Analysis: Existing Single Family Building Upgrades 67 Appendices
California Energy Codes & Standards | A statewide utility program 2024-04-25
-Cost Effectiveness Analysis: Existing Single Family Building Upgrades 68 Appendices
6.2.7 Fuel Escalation Assumptions
The average annual escalation rates in Table 28 were used in this study. These are based on assumptions from the
CPUC 2021 En Banc hearings on utility costs through 2030 (California Public Utilities Commission, 2021a). Escalation
rates through the remainder of the 30-year evaluation period are based on the escalation rate assumptions within the
2022 TDV factors. No data was available to estimate electricity escalation rates for CPAU and SMUD, therefore
electricity escalation rates for PG&E and statewide natural gas escalation rates were applied. Table 29 presents the
average annual escalation rates used in the utility rate escalation sensitivity analysis shown in Section 3.2.4. Rates
were applied for the same 30-year period and are based on the escalation rate assumptions within the 2025 LSC
factors from 2027 through 2053.28 These rates were developed for electricity use statewide (not utility-specific) and
assume steep increases in gas rates in the latter half of the analysis period. Data was not available for the years 2024,
2025, and 2026 and so the CPUC En Banc assumptions were applied for those years using the average rate across
the three IOUs for statewide electricity escalation.
Table 28: Real Utility Rate Escalation Rate Assumptions, CPUC En Banc and 2022 TDV Basis
Statewide Natural Gas Residential Average Rate (%/year, real)
Electric Residential Average Rate(%/year, real)
PG&E SCE SDG&E
2024 4.6% 1.8% 1.6% 2.8%
2025 4.6% 1.8% 1.6% 2.8%
2026 4.6% 1.8% 1.6% 2.8%
2027 4.6% 1.8% 1.6% 2.8%
2028 4.6% 1.8% 1.6% 2.8%
2029 4.6% 1.8% 1.6% 2.8%
2030 4.6% 1.8% 1.6% 2.8%
2031 2.0% 0.6% 0.6% 0.6%
2032 2.4% 0.6% 0.6% 0.6%
2033 2.1% 0.6% 0.6% 0.6%
2034 1.9% 0.6% 0.6% 0.6%
2035 1.9% 0.6% 0.6% 0.6%
2036 1.8% 0.6% 0.6% 0.6%
2037 1.7% 0.6% 0.6% 0.6%
2038 1.6% 0.6% 0.6% 0.6%
2039 2.1% 0.6% 0.6% 0.6%
2040 1.6% 0.6% 0.6% 0.6%
2041 2.2% 0.6% 0.6% 0.6%
2042 2.2% 0.6% 0.6% 0.6%
2043 2.3% 0.6% 0.6% 0.6%
2044 2.4% 0.6% 0.6% 0.6%
2045 2.5% 0.6% 0.6% 0.6%
2046 1.5% 0.6% 0.6% 0.6%
2047 1.3% 0.6% 0.6% 0.6%
2048 1.6% 0.6% 0.6% 0.6%
2049 1.3% 0.6% 0.6% 0.6%
2050 1.5% 0.6% 0.6% 0.6%
2051 1.8% 0.6% 0.6% 0.6%
2052 1.8% 0.6% 0.6% 0.6%
2053 1.8% 0.6% 0.6% 0.6%
28https://www.energy.ca.gov/files/2025-energy-code-hourly-factors. Actual escalation factors were provided by consultants E3.
California Energy Codes & Standards | A statewide utility program 2024-04-25
-Cost Effectiveness Analysis: Existing Single Family Building Upgrades 69 Appendices
Table 29: Real Utility Rate Escalation Rate Assumptions, 2025 LSC Basis
Year
Statewide Natural Gas Residential Average Rate (%/year, real)
Statewide
ElectricityResidential Average Rate (%/year, real)
2024 4.6% 2.1%
2025 4.6% 2.1%
2026 4.6% 2.1%
2027 4.2% 0.6%
2028 3.2% 1.9%
2029 3.6% 1.6%
2030 6.6% 1.3%
2031 6.7% 1.0%
2032 7.7% 1.2%
2033 8.2% 1.1%
2034 8.2% 1.1%
2035 8.2% 0.9%
2036 8.2% 1.1%
2037 8.2% 1.1%
2038 8.2% 1.0%
2039 8.2% 1.1%
2040 8.2% 1.1%
2041 8.2% 1.1%
2042 8.2% 1.1%
2043 8.2% 1.1%
2044 8.2% 1.1%
2045 8.2% 1.1%
2046 8.2% 1.1%
2047 3.1% 1.1%
2048 -0.5% 1.1%
2049 -0.6% 1.1%
2050 -0.5% 1.1%
2051 -0.6% 1.1%
2052 -0.6% 1.1%
2053 -0.6% 1.1%
California Energy Codes & Standards | A statewide utility program 2024-04-25
-Cost Effectiveness Analysis: Existing Single Family Building Upgrades 70 Appendices
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California Energy Codes & Standards | A statewide utility program 2024-04-25
Application of the 2022 Studies to the 2025 Energy Code: Existing Single Family Building Upgrades
Prepared by: Frontier Energy, Inc Misti Bruceri & Associates, LLC Prepared for: Kelly Cunningham, Codes and Standards Program, Pacific Gas and Electric Revision: 1.0 Last modified: 2025/08/15
2025 Energy Code: Existing Single Family Building Upgrades 1
2025/08/15
Table 1 Summary of Revisions
Date Description Reference (page or section)
8/15/2025 Original Release N/A
Legal Notice
This report was prepared by Pacific Gas and Electric Company and funded by the California utility customers under the auspices of the California Public Utilities Commission.
Copyright 2025, Pacific Gas and Electric Company. All rights reserved, except that this document may be used, copied, and distributed without modification.
Neither PG&E nor any of its employees makes any warranty, express or implied; or assumes any legal liability or responsibility for the accuracy, completeness or usefulness of any data, information, method, product, policy or process disclosed in this document; or represents that its use will not infringe any privately-owned rights including, but not limited to, patents, trademarks or copyrights.
2025 Energy Code: Existing Single Family Building Upgrades 2
2025/08/15
Acronym List
B/C – Lifecycle Benefit-to-Cost Ratio
CASE – Codes and Standards Enhancement
CFL – Compact Fluorescent Lamps
CPAU – City of Palo Alto Utilities
CPUC – California Public Utilities
Commission
CZ – California Climate Zone
kWh – Kilowatt Hour
NPV – Net Present Value
PG&E – Pacific Gas and Electric Company
PV – Photovoltaic
SCE – Southern California
Edison
SDG&E – San Diego Gas and
Electric
SMUD – Sacramento Municipal Utility District
SoCalGas – Southern California
Gas Company
Therm – Unit for quantity of heat
that equals 100,000 British thermal units
2025 Energy Code: Existing Single Family Building Upgrades 1
2025/08/15
Table of Contents
1 Summary ...................................................................................................................... 2
2 Air Sealing at the Ceiling ............................................................................................. 4
3 Lighting Measures ..................................................................................................... 10
4 Water Heating Package .............................................................................................. 14
5 PV ................................................................................................................................ 15
6 References ................................................................................................................. 22
List of Tables
Table 1 Summary of Revisions ............................................................................................. 1
Table 2. [Pre-1978] Air Sealing at the Ceiling (Std) ............................................................... 4
Table 3. [1978-1991] Air Sealing at the Ceiling (Std) ............................................................ 5
Table 4. [1992-2010] Air Sealing at the Ceiling (Std) ............................................................ 6
Table 5. [Pre-1978] Air Sealing at the Ceiling (CARE) .......................................................... 7
Table 6. [1978-1991] Air Sealing at the Ceiling (CARE) ........................................................ 8
Table 7. [1991-2010] Air Sealing at the Ceiling (CARE) ........................................................ 9
Table 8. [All Vintages] LED Lamp vs. CFL ........................................................................... 11
Table 9. [All Vintages] Exterior Photosensor ........................................................................12
Table 10. [All Vintages] LED and Photosensor ....................................................................13
Table 11. [All Vintages] Water Heating Package ..................................................................14
Table 12. [Pre-1978] 3 kW PV without Solar Tax Credit (Std) ..............................................16
Table 13. [1978-1991] 3 kW PV without Solar Tax Credit (Std) ...........................................17
Table 14. [1992-2010] 3 kW PV without Solar Tax Credit (Std) ............................................18
Table 15. [Pre-1978] 3 kW PV without Solar Tax Credit (CARE) ..........................................19
Table 16. [1978-1991] 3 kW PV without Solar Tax Credit (CARE) .......................................20
Table 17. [1992-2010] 3 kW PV without Solar Tax Credit (CARE) .......................................21
List of Figures
No table of figures entries found.
2025 Energy Code: Existing Single Family Building Upgrades 2
2025/08/15
1 Summary
The California Codes and Standards (C&S) Reach Codes program provides technical
support to local governments considering adopting a local ordinance (reach code) intended
to support meeting local and/or statewide energy efficiency and greenhouse gas reduction
goals. The program facilitates adoption and implementation of the code when requested by
local jurisdictions by providing resources such as cost-effectiveness studies, model
language, sample findings, and other supporting documentation.
In April 2024, the Statewide Reach Codes Team published the 2022 Cost-Effectiveness
Study: Existing Single Family Building Upgrades. This study focuses on existing single
family buildings identifying cost-effective measures and measure package upgrades in all 16
California climate zones. The study was conducted to complement Part 6 of the California
Building Code (the Energy Code) for the 2022 code cycle, effective January 1, 2023. In the
2019 code cycle the 2019 Cost-Effectiveness Study: Existing Single Family Residential
Building Upgrades study included outdoor lighting and a water heater package that was
discontinued in the 2022 study but has been brought back in this memo by request from
jurisdictions. The studies document the estimated costs, benefits, energy impacts and
greenhouse gas emission reductions that may result from implementing an ordinance to
help local leadership, residents, and other stakeholders make informed policy decisions.
The Statewide Reach Codes Team reviewed the cost-effectiveness study for impacts of
code changes implemented in the 2025 Energy Code. Measures that are now required by
code may alter the results presented in the 2022 study. Below is a summary of the changes
to the additions and alterations for residential buildings sections of the 2025 Energy Code.
• Mandatory wall insulation R-value has been increased from R-13 to R-15. [Section
150.2(a) of the Energy Code]
• Prescriptive window U-factor has decreased from 0.30 to 0.27 in Climate Zones 1-5,
11-14, and 16. [Section 150.2(b)1B of the Energy Code]
The wall insulation measure has been re-evaluated with R-15 instead of R-13. There is
generally a slight increase in utility cost savings as expected with the increase in efficiency.
However, there is not a substantial impact on the cost-effectiveness results.
For the prescriptive window U-factor, the original study modeled U-0.28 in all climate zones.
This updated memo drops the U-factor from 0.28 to 0.27 in all climate zones. The SHGC is
maintained at 0.23 for climate zone 2, 4, and 6-15 and 0.35 for CZ 1, 3, 5, 16. There is
minimal impact on the cost-effectiveness results due to this update. However, there are two
instances in the 1978-1991 vintage where cost-effectiveness flips from cost-effective to not
cost-effective. Climate zone 4 in PGE territory utilizing standard rates and the modest gas
escalation is no longer cost-effective on-bill by the smallest margin. Climate zone 10 in
SDGE territory utilizing CARE rates and the modest gas escalation has also become no
longer cost-effective on-bill.
2025 Energy Code: Existing Single Family Building Upgrades 3
2025/08/15
The 2022 study included a whole building air sealing measure defined as a 30% reduction in
air leakage. A new measure – air sealing of the ceiling floor, representing a 14% reduction in
air leakage – is added in this memo. Further details and cost-effectiveness results are
provided in Section 2.
Lighting measures were previously presented in the 2019 Cost-Effectiveness Study: Existing
Single Family Residential Building Upgrades study but were not analyzed in the 2022 study.
Updated cost-effectiveness analysis for this measure is presented in Section 3.
The water heating package measure was previously presented in 2019 Cost-Effectiveness
Study: Existing Single Family Residential Building Upgrades study. Updated cost-
effectiveness analysis for this measure is presented in Section 4.
The 3 kW PV measure from the 2022 study is revised here with an updated cost-
effectiveness analysis that accounts for the elimination of the Federal Solar tax credit
December 31, 2025. Additional details and analysis are provided in Section 5.
The 2022 report, model ordinance language and other resources are posted on the C&S
Reach Codes Program website at LocalEnergyCodes.com. Local jurisdictions that are
considering adopting an ordinance may contact the program for further technical support at
info@localenergycodes.com.
2025 Energy Code: Existing Single Family Building Upgrades 4
2025/08/15
2 Air Sealing at the Ceiling
Unlike full air sealing, which has previously been presented, air sealing of the ceiling floor
may be an attractive measure for an attic remodel project. The whole building air sealing
measure estimated a 30% reduction in air leakage, while air sealing at the ceiling measure
results in a 14% reduction in air leakage.
Table 2 through Table 7 present the cost-effectiveness results for the air sealing at the
ceiling plane measure. The estimated incremental cost for air sealing at the ceiling plane is
$1,963 which is from the 2022 Residential Additions and Alterations CASE Report
(Statewide CASE Team, 2020).
Table 2. [Pre-1978] Air Sealing at the Ceiling (Std)
Climate Zone Electric/ Gas Utility
First Incremental Cost
First-year Utility Savings
Lifecycle NPV Savings
2025
LSC NPV
On-Bill NPV Modest Gas Escalation
On-Bill NPV High Gas Escalation
CZ01 PGE $1,963 $33 ($465) ($997) ($432)
CZ02 PGE $1,963 $18 ($1,114) ($1,433) ($1,118)
CZ03 PGE $1,963 $17 ($1,180) ($1,463) ($1,171)
CZ04 PGE $1,963 $25 ($1,081) ($1,290) ($979)
CZ04 CPAU $1,963 $21 ($1,081) ($1,379) ($1,069)
CZ05 PGE $1,963 $16 ($1,230) ($1,500) ($1,235)
CZ05 PGE/SCG $1,963 $14 ($1,230) ($1,555) ($1,325)
CZ06 SCE/SCG $1,963 ($2) ($1,797) ($1,987) ($1,937)
CZ07 SDGE $1,963 ($3) ($1,813) ($2,008) ($1,934)
CZ08 SCE/SCG $1,963 $7 ($1,680) ($1,775) ($1,703)
CZ09 SCE/SCG $1,963 $10 ($1,597) ($1,693) ($1,592)
CZ10 SCE/SCG $1,963 $17 ($1,497) ($1,540) ($1,420)
CZ10 SDGE $1,963 $23 ($1,497) ($1,366) ($1,237)
CZ11 PGE $1,963 $32 ($1,014) ($1,120) ($816)
CZ12 PGE $1,963 $22 ($1,147) ($1,348) ($1,064)
CZ12 SMUD/PGE $1,963 $17 ($1,147) ($1,468) ($1,190)
CZ13 PGE $1,963 $31 ($1,114) ($1,162) ($918)
CZ14 SCE/SCG $1,963 $32 ($897) ($1,130) ($832)
CZ14 SDGE $1,963 $42 ($897) ($845) ($519)
CZ15 SCE/SCG $1,963 $40 ($1,297) ($1,041) ($946)
CZ16 PGE $1,963 $30 ($581) ($1,071) ($551)
2025 Energy Code: Existing Single Family Building Upgrades 5
2025/08/15
Table 3. [1978-1991] Air Sealing at the Ceiling (Std)
Climate Zone Electric/ Gas Utility
First Incremental Cost
First-year Utility Savings
Lifecycle NPV Savings
2025
LSC NPV
On-Bill NPV Modest Gas Escalation
On-Bill NPV High Gas Escalation
CZ01 PGE $1,963 $23 ($931) ($1,292) ($903)
CZ02 PGE $1,963 $13 ($1,364) ($1,570) ($1,341)
CZ03 PGE $1,963 $10 ($1,480) ($1,668) ($1,496)
CZ04 PGE $1,963 $16 ($1,330) ($1,522) ($1,292)
CZ04 CPAU $1,963 $13 ($1,330) ($1,575) ($1,356)
CZ05 PGE $1,963 $11 ($1,447) ($1,649) ($1,466)
CZ05 PGE/SCG $1,963 $10 ($1,447) ($1,684) ($1,522)
CZ06 SCE/SCG $1,963 ($1) ($1,830) ($1,967) ($1,934)
CZ07 SDGE $1,963 ($4) ($1,896) ($2,040) ($1,991)
CZ08 SCE/SCG $1,963 $4 ($1,797) ($1,860) ($1,813)
CZ09 SCE/SCG $1,963 $5 ($1,747) ($1,823) ($1,764)
CZ10 SCE/SCG $1,963 $10 ($1,663) ($1,722) ($1,652)
CZ10 SDGE $1,963 $14 ($1,663) ($1,603) ($1,517)
CZ11 PGE $1,963 $25 ($1,264) ($1,320) ($1,096)
CZ12 PGE $1,963 $16 ($1,380) ($1,520) ($1,314)
CZ12 SMUD/PGE $1,963 $12 ($1,380) ($1,604) ($1,402)
CZ13 PGE $1,963 $23 ($1,364) ($1,373) ($1,199)
CZ14 SCE/SCG $1,963 $22 ($1,230) ($1,397) ($1,182)
CZ14 SDGE $1,963 $28 ($1,230) ($1,212) ($974)
CZ15 SCE/SCG $1,963 $32 ($1,463) ($1,225) ($1,154)
CZ16 PGE $1,963 $21 ($1,014) ($1,357) ($1,001)
2025 Energy Code: Existing Single Family Building Upgrades 6
2025/08/15
Table 4. [1992-2010] Air Sealing at the Ceiling (Std)
Climate Zone Electric/ Gas Utility
First Incremental Cost
First-year Utility Savings
Lifecycle NPV Savings
2025
LSC NPV
On-Bill NPV Modest Gas Escalation
On-Bill NPV High Gas Escalation
CZ01 PGE $1,963 $14 ($1,314) ($1,550) ($1,309)
CZ02 PGE $1,963 $9 ($1,530) ($1,687) ($1,529)
CZ03 PGE $1,963 $7 ($1,613) ($1,744) ($1,618)
CZ04 PGE $1,963 $11 ($1,530) ($1,653) ($1,501)
CZ04 CPAU $1,963 $9 ($1,530) ($1,701) ($1,557)
CZ05 PGE $1,963 $7 ($1,613) ($1,759) ($1,637)
CZ05 PGE/SCG $1,963 $6 ($1,613) ($1,788) ($1,686)
CZ06 SCE/SCG $1,963 $1 ($1,863) ($1,936) ($1,911)
CZ07 SDGE $1,963 $0 ($1,896) ($1,944) ($1,911)
CZ08 SCE/SCG $1,963 $3 ($1,830) ($1,885) ($1,851)
CZ09 SCE/SCG $1,963 $3 ($1,780) ($1,892) ($1,853)
CZ10 SCE/SCG $1,963 $6 ($1,763) ($1,814) ($1,767)
CZ10 SDGE $1,963 $8 ($1,763) ($1,741) ($1,681)
CZ11 PGE $1,963 $14 ($1,530) ($1,581) ($1,437)
CZ12 PGE $1,963 $10 ($1,580) ($1,693) ($1,560)
CZ12 SMUD/PGE $1,963 $8 ($1,580) ($1,737) ($1,606)
CZ13 PGE $1,963 $12 ($1,580) ($1,643) ($1,531)
CZ14 SCE/SCG $1,963 $12 ($1,530) ($1,639) ($1,503)
CZ14 SDGE $1,963 $16 ($1,530) ($1,537) ($1,382)
CZ15 SCE/SCG $1,963 $17 ($1,680) ($1,572) ($1,532)
CZ16 PGE $1,963 $14 ($1,314) ($1,556) ($1,314)
2025 Energy Code: Existing Single Family Building Upgrades 7
2025/08/15
Table 5. [Pre-1978] Air Sealing at the Ceiling (CARE)
Climate Zone Electric/ Gas Utility
First Incremental Cost
First-year Utility Savings
Lifecycle NPV Savings
2025
LSC NPV
On-Bill NPV Modest Gas Escalation
On-Bill NPV High Gas Escalation
CZ01 PGE $1,963 $26 ($465) ($1,212) ($766)
CZ02 PGE $1,963 $14 ($1,114) ($1,550) ($1,302)
CZ03 PGE $1,963 $13 ($1,180) ($1,574) ($1,343)
CZ04 PGE $1,963 $18 ($1,081) ($1,459) ($1,216)
CZ04 CPAU $1,963 $0 ($1,081) ($1,963) ($1,963)
CZ05 PGE $1,963 $12 ($1,230) ($1,604) ($1,395)
CZ05 PGE/SCG $1,963 $11 ($1,230) ($1,648) ($1,467)
CZ06 SCE/SCG $1,963 ($1) ($1,797) ($1,969) ($1,928)
CZ07 SDGE $1,963 ($1) ($1,813) ($1,976) ($1,918)
CZ08 SCE/SCG $1,963 $5 ($1,680) ($1,824) ($1,768)
CZ09 SCE/SCG $1,963 $8 ($1,597) ($1,764) ($1,686)
CZ10 SCE/SCG $1,963 $12 ($1,497) ($1,659) ($1,566)
CZ10 SDGE $1,963 $16 ($1,497) ($1,546) ($1,443)
CZ11 PGE $1,963 $23 ($1,014) ($1,353) ($1,116)
CZ12 PGE $1,963 $17 ($1,147) ($1,503) ($1,279)
CZ12 SMUD/PGE $1,963 $11 ($1,147) ($1,623) ($1,406)
CZ13 PGE $1,963 $22 ($1,114) ($1,394) ($1,205)
CZ14 SCE/SCG $1,963 $23 ($897) ($1,352) ($1,120)
CZ14 SDGE $1,963 $30 ($897) ($1,163) ($905)
CZ15 SCE/SCG $1,963 $27 ($1,297) ($1,334) ($1,266)
CZ16 PGE $1,963 $24 ($581) ($1,270) ($859)
2025 Energy Code: Existing Single Family Building Upgrades 8
2025/08/15
Table 6. [1978-1991] Air Sealing at the Ceiling (CARE)
Climate Zone Electric/ Gas Utility
First Incremental Cost
First-year Utility Savings
Lifecycle NPV Savings
2025
LSC NPV
On-Bill NPV Modest Gas Escalation
On-Bill NPV High Gas Escalation
CZ01 PGE $1,963 $18 ($931) ($1,442) ($1,135)
CZ02 PGE $1,963 $10 ($1,364) ($1,658) ($1,477)
CZ03 PGE $1,963 $8 ($1,480) ($1,734) ($1,598)
CZ04 PGE $1,963 $12 ($1,330) ($1,627) ($1,446)
CZ04 CPAU $1,963 $0 ($1,330) ($1,963) ($1,963)
CZ05 PGE $1,963 $8 ($1,447) ($1,719) ($1,575)
CZ05 PGE/SCG $1,963 $7 ($1,447) ($1,746) ($1,619)
CZ06 SCE/SCG $1,963 ($0) ($1,830) ($1,959) ($1,933)
CZ07 SDGE $1,963 ($2) ($1,896) ($2,003) ($1,964)
CZ08 SCE/SCG $1,963 $3 ($1,797) ($1,886) ($1,848)
CZ09 SCE/SCG $1,963 $4 ($1,747) ($1,859) ($1,813)
CZ10 SCE/SCG $1,963 $7 ($1,663) ($1,790) ($1,736)
CZ10 SDGE $1,963 $10 ($1,663) ($1,710) ($1,641)
CZ11 PGE $1,963 $18 ($1,264) ($1,500) ($1,325)
CZ12 PGE $1,963 $12 ($1,380) ($1,631) ($1,469)
CZ12 SMUD/PGE $1,963 $8 ($1,380) ($1,716) ($1,558)
CZ13 PGE $1,963 $16 ($1,364) ($1,545) ($1,411)
CZ14 SCE/SCG $1,963 $16 ($1,230) ($1,545) ($1,378)
CZ14 SDGE $1,963 $20 ($1,230) ($1,422) ($1,233)
CZ15 SCE/SCG $1,963 $22 ($1,463) ($1,460) ($1,410)
CZ16 PGE $1,963 $16 ($1,014) ($1,491) ($1,211)
2025 Energy Code: Existing Single Family Building Upgrades 9
2025/08/15
Table 7. [1991-2010] Air Sealing at the Ceiling (CARE)
Climate Zone Electric/ Gas Utility
First Incremental Cost
First-year Utility Savings
Lifecycle NPV Savings
2025
LSC NPV
On-Bill NPV Modest Gas Escalation
On-Bill NPV High Gas Escalation
CZ01 PGE $1,963 $11 ($1,314) ($1,642) ($1,452)
CZ02 PGE $1,963 $7 ($1,530) ($1,749) ($1,625)
CZ03 PGE $1,963 $6 ($1,613) ($1,793) ($1,693)
CZ04 PGE $1,963 $8 ($1,530) ($1,729) ($1,609)
CZ04 CPAU $1,963 $0 ($1,530) ($1,963) ($1,963)
CZ05 PGE $1,963 $5 ($1,613) ($1,804) ($1,708)
CZ05 PGE/SCG $1,963 $5 ($1,613) ($1,827) ($1,747)
CZ06 SCE/SCG $1,963 $1 ($1,863) ($1,940) ($1,920)
CZ07 SDGE $1,963 $0 ($1,896) ($1,944) ($1,918)
CZ08 SCE/SCG $1,963 $2 ($1,830) ($1,905) ($1,879)
CZ09 SCE/SCG $1,963 $2 ($1,780) ($1,908) ($1,878)
CZ10 SCE/SCG $1,963 $4 ($1,763) ($1,855) ($1,819)
CZ10 SDGE $1,963 $6 ($1,763) ($1,805) ($1,758)
CZ11 PGE $1,963 $10 ($1,530) ($1,685) ($1,572)
CZ12 PGE $1,963 $7 ($1,580) ($1,759) ($1,654)
CZ12 SMUD/PGE $1,963 $5 ($1,580) ($1,802) ($1,700)
CZ13 PGE $1,963 $9 ($1,580) ($1,732) ($1,644)
CZ14 SCE/SCG $1,963 $9 ($1,530) ($1,722) ($1,615)
CZ14 SDGE $1,963 $11 ($1,530) ($1,652) ($1,529)
CZ15 SCE/SCG $1,963 $12 ($1,680) ($1,696) ($1,667)
CZ16 PGE $1,963 $11 ($1,314) ($1,645) ($1,454)
2025 Energy Code: Existing Single Family Building Upgrades 10
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3 Lighting Measures
LED lighting and exterior lighting control measures were previously evaluated in the 2019
Cost-Effectiveness Study: Existing Single Family Residential Building Upgrades study.
These measures are not included in the 2022 Cost-Effectiveness Study: Existing Single
Family Building Upgrades study, but have been re-evaluated and included in this memo.
The updated analysis follows the same methodology as the 2019 study, but with updated
costs for equipment and updated utility rates.
The three measures evaluated are LED lighting, exterior photosensor, and LED lighting plus
photosensor. Table 8 through Table 10 show the results for the different lighting measures
evaluated. Each measure is explained in more detail below.
LED Lighting: Replace screw-in (A-based for lamps) incandescent lamps and compact
fluorescent lamps (CFLs) with light-emitting diode (LED) A-lamps. This analysis was
conducted external to the energy model and evaluated replacement of a 13 W CFL lamp
with an 9.6 W LED lamp operating 620 hours annually. Annual hour estimates were based
on whole building average hours of operation from a 2010 lighting study by KEMA (KEMA,
2010). Lifetime assumptions were 10,000 hours for CFLs and 25,000 hours for LED lamps.
For incremental cost calculations it was assumed CFLs have a lifetime of 15 years, are
installed five years prior to the retrofit, and would need to be replaced at year ten and 25.
Exterior Lighting Controls/Photosensor: Evaluation of exterior lighting controls was
completed on a per-luminaire basis external to the energy model and assumes a screw-in
photosensor control is installed in outdoor lighting luminaires. Energy savings of 12.1 kWh
per year was applied based on analysis done by the Consortium for Energy Efficiency,
assuming LED lamps, 2.6 hours per day of operation, and that photosensor controls reduce
operating hours on average 20 percent each day (CEE, 2014). Energy savings will be
higher for incandescent or CFL luminaires.
Exterior Lighting Controls/Photosensor+LED: An additional evaluation was completed
for exterior lighting controls on a per-luminaire basis external to the energy model and
assumes a screw-in photosensor control is installed in outdoor lighting luminaires and
incandescent lamps CFLs are replaced with light-emitting diode (LED) A-lamps. Energy
savings of 14.3 kWh per year was applied based on the sum of the LED lighting and
Exterior Lighting Controls with Photosensor kWh energy savings.
For the measures including a LED, a cost of $3.49 for LED dimmable A19 lamp 60 W
equivalent is used. A cost of $1.74 is used for an equivalent CFL product which was used to
estimate total replacement costs at years 10 and 25. Costs are based on a single LED lamp
replacement. For the photosensor, an incremental cost of $12.62, based on a screw-in
photosensor control, was obtained from an on-line product search of available products. A
five-year lifetime for this type of control was assumed.
2025 Energy Code: Existing Single Family Building Upgrades 11
2025/08/15
Table 8. [All Vintages] LED Lamp vs. CFL
Climate Zone Electric/ Gas Utility Measure Cost Electricity Savings
First Year Utility Cost Savings
Customer On-Bill Modest Gas Escalation Customer On-Bill High Gas Escalation
B/C Ratio NPV B/C Ratio NPV
CZ01 PGE $1.75 2.2 $0.77 10.05 $15.82 10.58 $16.74
CZ02 PGE $1.75 2.2 $0.86 11.26 $17.94 11.85 $18.98
CZ03 PGE $1.75 2.2 $0.78 10.14 $15.99 10.68 $16.92
CZ04 PGE $1.75 2.2 $0.80 10.39 $16.42 10.94 $17.38
CZ04 CPAU $1.75 2.2 $0.41 5.32 $7.56 5.60 $8.05
CZ05 PGE $1.75 2.2 $0.78 10.14 $15.99 10.67 $16.92
CZ05 PGE/SCG $1.75 2.2 $0.78 10.14 $15.99 10.67 $16.92
CZ06 SCE/SCG $1.75 2.2 $0.66 8.44 $13.01 8.99 $13.97
CZ07 SDGE $1.75 2.2 $0.95 13.15 $21.24 13.03 $21.04
CZ08 SCE/SCG $1.75 2.2 $0.74 9.51 $14.89 10.14 $15.98
CZ09 SCE/SCG $1.75 2.2 $0.71 9.17 $14.29 9.77 $15.33
CZ10 SCE/SCG $1.75 2.2 $0.73 9.38 $14.65 9.99 $15.72
CZ10 SDGE $1.75 2.2 $1.07 14.86 $24.24 14.74 $24.02
CZ11 PGE $1.75 2.2 $0.85 11.05 $17.57 11.63 $18.59
CZ12 PGE $1.75 2.2 $0.79 10.32 $16.29 10.86 $17.24
CZ12 SMUD/PGE $1.75 2.2 $0.47 6.08 $8.88 6.40 $9.44
CZ13 PGE $1.75 2.2 $0.86 11.27 $17.96 11.86 $19.00
CZ14 SCE/SCG $1.75 2.2 $0.74 9.58 $15.00 10.21 $16.10
CZ14 SDGE $1.75 2.2 $1.06 14.68 $23.93 14.56 $23.71
CZ15 SCE/SCG $1.75 2.2 $0.78 10.01 $15.75 10.66 $16.90
CZ16 PGE $1.75 2.2 $0.77 9.98 $15.71 10.51 $16.62
2025 Energy Code: Existing Single Family Building Upgrades 12
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Table 9. [All Vintages] Exterior Photosensor
Climate Zone Electric/ Gas Utility Measure Cost Electricity Savings
First Year Utility Cost Savings
Customer On-Bill Modest Gas Escalation Customer On-Bill High Gas Escalation
B/C Ratio NPV B/C Ratio NPV
CZ01 PGE $54.03 12.1 $4.16 1.75 $40.75 1.85 $45.74
CZ02 PGE $54.03 12.1 $4.16 1.75 $40.75 1.85 $45.74
CZ03 PGE $54.03 12.1 $4.16 1.75 $40.75 1.85 $45.74
CZ04 PGE $54.03 12.1 $4.16 1.75 $40.75 1.85 $45.74
CZ04 CPAU $54.03 12.1 $2.12 0.89 ($5.69) 0.94 ($3.15)
CZ05 PGE $54.03 12.1 $4.16 1.75 $40.75 1.85 $45.74
CZ05 PGE/SCG $54.03 12.1 $4.16 1.75 $40.75 1.85 $45.74
CZ06 SCE/SCG $54.03 12.1 $3.48 1.45 $24.36 1.55 $29.48
CZ07 SDGE $54.03 12.1 $5.07 2.27 $68.58 2.25 $67.53
CZ08 SCE/SCG $54.03 12.1 $3.48 1.45 $24.36 1.55 $29.48
CZ09 SCE/SCG $54.03 12.1 $3.48 1.45 $24.36 1.55 $29.48
CZ10 SCE/SCG $54.03 12.1 $3.48 1.45 $24.36 1.55 $29.48
CZ10 SDGE $54.03 12.1 $5.07 2.27 $68.58 2.25 $67.53
CZ11 PGE $54.03 12.1 $4.16 1.75 $40.75 1.85 $45.74
CZ12 PGE $54.03 12.1 $4.16 1.75 $40.75 1.85 $45.74
CZ12 SMUD/PGE $54.03 12.1 $1.46 0.62 ($20.73) 0.65 ($18.98)
CZ13 PGE $54.03 12.1 $4.16 1.75 $40.75 1.85 $45.74
CZ14 SCE/SCG $54.03 12.1 $3.48 1.45 $24.36 1.55 $29.48
CZ14 SDGE $54.03 12.1 $5.07 2.27 $68.58 2.25 $67.53
CZ15 SCE/SCG $54.03 12.1 $3.48 1.45 $24.36 1.55 $29.48
CZ16 PGE $54.03 12.1 $4.16 1.75 $40.75 1.85 $45.74
2025 Energy Code: Existing Single Family Building Upgrades 13
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Table 10. [All Vintages] LED and Photosensor
Climate Zone Electric/ Gas Utility Measure Cost Electricity Savings
First Year Utility Cost Savings
Customer On-Bill Modest Gas Escalation Customer On-Bill High Gas Escalation
B/C Ratio NPV B/C Ratio NPV
CZ01 PGE $55.77 14.3 $4.93 2.01 $56.57 2.12 $62.48
CZ02 PGE $55.77 14.3 $5.02 2.05 $58.70 2.16 $64.72
CZ03 PGE $55.77 14.3 $4.94 2.02 $56.74 2.12 $62.66
CZ04 PGE $55.77 14.3 $4.95 2.03 $57.17 2.13 $63.12
CZ04 CPAU $55.77 14.3 $2.53 1.03 $1.87 1.09 $4.90
CZ05 PGE $55.77 14.3 $4.94 2.02 $56.74 2.12 $62.66
CZ05 PGE/SCG $55.77 14.3 $4.94 2.02 $56.74 2.12 $62.66
CZ06 SCE/SCG $55.77 14.3 $4.13 1.67 $37.37 1.78 $43.45
CZ07 SDGE $55.77 14.3 $6.02 2.61 $89.82 2.59 $88.57
CZ08 SCE/SCG $55.77 14.3 $4.22 1.70 $39.25 1.82 $45.46
CZ09 SCE/SCG $55.77 14.3 $4.19 1.69 $38.65 1.80 $44.82
CZ10 SCE/SCG $55.77 14.3 $4.21 1.70 $39.01 1.81 $45.20
CZ10 SDGE $55.77 14.3 $6.14 2.66 $92.82 2.64 $91.55
CZ11 PGE $55.77 14.3 $5.00 2.05 $58.33 2.15 $64.33
CZ12 PGE $55.77 14.3 $4.95 2.02 $57.05 2.13 $62.98
CZ12 SMUD/PGE $55.77 14.3 $1.93 0.79 ($11.85) 0.83 ($9.54)
CZ13 PGE $55.77 14.3 $5.02 2.05 $58.71 2.16 $64.73
CZ14 SCE/SCG $55.77 14.3 $4.22 1.71 $39.37 1.82 $45.58
CZ14 SDGE $55.77 14.3 $6.13 2.66 $92.51 2.64 $91.24
CZ15 SCE/SCG $55.77 14.3 $4.26 1.72 $40.12 1.83 $46.38
CZ16 PGE $55.77 14.3 $4.92 2.01 $56.46 2.12 $62.36
2025 Energy Code: Existing Single Family Building Upgrades 14
2025/08/15
4 Water Heating Package
This package includes the following:
• R-6 water heater blanket
• R-3 hot water pipe insulation
• Low flow fixtures: two low flow showerheads and three sink aerators.
This analysis assumes the homeowner installs these measures themselves and therefore
no labor costs. Costs are based on Home Depot prices from August of 2025. The water
heater package is evaluated over a 15-year analysis period and assumes the modest gas
escalation rate.
Table 11. [All Vintages] Water Heating Package
Climate Zone Electric/ Gas Utility Measure Cost
Gas Savings (therms)
Customer On-Bill
First Year Utility Cost Savings B/C Ratio NPV
CZ01 PGE $125.68 14.69 $31.11 3.96 $371.76
CZ02 PGE $125.68 15.60 $35.20 4.48 $437.15
CZ03 PGE $125.68 15.70 $31.43 4.00 $376.88
CZ04 PGE $125.68 16.05 $32.62 4.15 $395.78
CZ04 CPAU $125.68 16.05 $31.99 4.07 $385.77
CZ05 PGE $125.68 15.83 $31.37 3.99 $375.88
CZ05 PGE/SCG $125.68 15.83 $28.29 3.60 $326.59
CZ06 SCE/SCG $125.68 16.67 $29.18 3.71 $340.84
CZ07 SDGE $125.68 16.75 $37.25 4.74 $469.81
CZ08 SCE/SCG $125.68 16.78 $29.36 3.74 $343.80
CZ09 SCE/SCG $125.68 16.66 $29.27 3.72 $342.34
CZ10 SCE/SCG $125.68 16.58 $28.99 3.69 $337.73
CZ10 SDGE $125.68 16.58 $37.77 4.80 $478.19
CZ11 PGE $125.68 15.87 $32.96 4.19 $401.32
CZ12 PGE $125.68 15.90 $32.85 4.18 $399.47
CZ12 SMUD/PGE $125.68 15.90 $32.85 4.18 $399.47
CZ13 PGE $125.68 16.32 $33.00 4.20 $401.93
CZ14 SCE/SCG $125.68 16.11 $29.79 3.79 $350.57
CZ14 SDGE $125.68 16.11 $39.23 4.99 $501.49
CZ15 SCE/SCG $125.68 17.40 $30.16 3.84 $356.50
CZ16 PGE $125.68 15.14 $31.75 4.04 $381.87
2025 Energy Code: Existing Single Family Building Upgrades 15
2025/08/15
5 PV
The results for 3 kW PV have been updated from the 2022 study to remove the federal solar
tax credit from the cost-effectiveness calculations. The removal of the solar tax credit has a
substantial impact on many climate zones across all vintages and will impact the FlexPath.
The following describes the impacts and changes to cost-effectiveness from the 2022 study.
These observations are utilizing standard rates. Previously, with the solar tax credit, the 3
kW PV measure in the pre-1978 vintage was on-bill cost effective in all climate zones using
both the modest and high gas escalation rates. However, with the credit removed, Climate
Zones 1-3, 5, 6, and 12 are no longer cost effective on-bill for both the modest and high gas
escalations.
Previously for the 1978-1991 vintage the only cases that were not on-bill cost effective were
climate zones 2 and 6 utilizing the modest gas escalation. Now, with the credit removed,
many more climate zones are no longer cost effective. Using the modest gas escalation,
climate zones 1-3, 5, 6, 12, and 16 are not cost effective on-bill. Using the high gas
escalation, climate zones 1-3, 5, 6, and 12 (SMUD) are not cost effective on-bill.
Previously for the 1992-2010 vintage the following cases were not cost effective on-bill:
climate zones 1-3, 5, and 6 utilizing the modest gas escalation and climate zone 6 using the
high gas escalation. With the credit removed an increased number of climate zones are no
longer cost effective. Using the modest gas escalation, climate zones 1-3, 4 (PGE) 5-9, 10
(SCE/SCG),12, and 16 are not cost effective on-bill. Using the high gas escalation, climate
zones 1-3, 4 (PGE), 5-7, 9, 12, and 16 are not cost effective on-bill.
The cost-effectiveness results are presented in Table 12 through Table 1717.
2025 Energy Code: Existing Single Family Building Upgrades 16
2025/08/15
Table 12. [Pre-1978] 3 kW PV without Solar Tax Credit (Std)
Climate Zone Electric/ Gas Utility
First Incremental Cost
On-Bill Savings
On-Bill B/C Modest Gas Escalation
On-Bill NPV Modest Gas Escalation
On-Bill B/C High Gas Escalation
On-Bill NPV High Gas Escalation
CZ01 PGE $13,726 0.80 ($3,074) 0.85 ($2,410)
CZ02 PGE $13,726 0.80 ($3,072) 0.85 ($2,409)
CZ03 PGE $13,726 0.77 ($3,567) 0.81 ($2,930)
CZ04 PGE $13,726 1.11 $1,652 1.16 $2,564
CZ04 CPAU $13,726 1.38 $5,983 1.45 $7,123
CZ05 PGE $13,726 0.78 ($3,431) 0.82 ($2,786)
CZ05 PGE/SCG $13,726 0.78 ($3,431) 0.82 ($2,786)
CZ06 SCE/SCG $13,726 0.87 ($2,118) 0.92 ($1,231)
CZ07 SDGE $13,726 1.31 $4,886 1.30 $4,711
CZ08 SCE/SCG $13,726 1.30 $4,655 1.38 $5,984
CZ09 SCE/SCG $13,726 1.18 $2,821 1.26 $4,030
CZ10 SCE/SCG $13,726 1.29 $4,622 1.38 $5,948
CZ10 SDGE $13,726 1.99 $15,550 1.97 $15,284
CZ11 PGE $13,726 1.55 $8,684 1.64 $9,967
CZ12 PGE $13,726 1.07 $1,117 1.13 $2,002
CZ12 SMUD/PGE $13,726 0.93 ($1,109) 0.98 ($342)
CZ13 PGE $13,726 1.80 $12,597 1.90 $14,085
CZ14 SCE/SCG $13,726 1.58 $9,098 1.68 $10,717
CZ14 SDGE $13,726 2.15 $17,983 2.13 $17,695
CZ15 SCE/SCG $13,726 2.24 $19,477 2.39 $21,774
CZ16 PGE $13,726 1.04 $579 1.09 $1,435
2025 Energy Code: Existing Single Family Building Upgrades 17
2025/08/15
Table 13. [1978-1991] 3 kW PV without Solar Tax Credit (Std)
Climate Zone Electric/ Gas Utility
First Incremental Cost
On-Bill Savings
On-Bill B/C Modest Gas Escalation
On-Bill NPV Modest Gas Escalation
On-Bill B/C High Gas Escalation
On-Bill NPV High Gas Escalation
CZ01 PGE $13,726 0.77 ($3,570) 0.81 ($2,932)
CZ02 PGE $13,726 0.71 ($4,549) 0.75 ($3,963)
CZ03 PGE $13,726 0.74 ($4,106) 0.78 ($3,497)
CZ04 PGE $13,726 1.00 $7 1.05 $833
CZ04 CPAU $13,726 1.35 $5,517 1.42 $6,633
CZ05 PGE $13,726 0.75 ($3,985) 0.79 ($3,369)
CZ05 PGE/SCG $13,726 0.75 ($3,985) 0.79 ($3,369)
CZ06 SCE/SCG $13,726 0.73 ($4,249) 0.78 ($3,501)
CZ07 SDGE $13,726 1.17 $2,623 1.16 $2,466
CZ08 SCE/SCG $13,726 1.20 $3,086 1.27 $4,313
CZ09 SCE/SCG $13,726 1.09 $1,487 1.17 $2,609
CZ10 SCE/SCG $13,726 1.18 $2,884 1.26 $4,097
CZ10 SDGE $13,726 1.85 $13,356 1.84 $13,108
CZ11 PGE $13,726 1.41 $6,420 1.48 $7,583
CZ12 PGE $13,726 0.97 ($512) 1.02 $287
CZ12 SMUD/PGE $13,726 0.93 ($1,109) 0.98 ($342)
CZ13 PGE $13,726 1.63 $9,953 1.72 $11,302
CZ14 SCE/SCG $13,726 1.42 $6,655 1.52 $8,115
CZ14 SDGE $13,726 2.00 $15,653 1.98 $15,386
CZ15 SCE/SCG $13,726 1.94 $14,686 2.06 $16,670
CZ16 PGE $13,726 0.95 ($737) 1.00 $49
2025 Energy Code: Existing Single Family Building Upgrades 18
2025/08/15
Table 1414. [1992-2010] 3 kW PV without Solar Tax Credit (Std)
Climate Zone Electric/ Gas Utility
First Incremental Cost
On-Bill Savings
On-Bill B/C Modest Gas Escalation
On-Bill NPV Modest Gas Escalation
On-Bill B/C High Gas Escalation
On-Bill NPV High Gas Escalation
CZ01 PGE $13,726 0.71 ($4,475) 0.75 ($3,885)
CZ02 PGE $13,726 0.73 ($4,198) 0.77 ($3,593)
CZ03 PGE $13,726 0.72 ($4,411) 0.76 ($3,817)
CZ04 PGE $13,726 0.80 ($3,121) 0.84 ($2,459)
CZ04 CPAU $13,726 1.16 $2,477 1.22 $3,433
CZ05 PGE $13,726 0.73 ($4,299) 0.76 ($3,700)
CZ05 PGE/SCG $13,726 0.73 ($4,299) 0.76 ($3,700)
CZ06 SCE/SCG $13,726 0.61 ($6,143) 0.65 ($5,520)
CZ07 SDGE $13,726 0.94 ($931) 0.93 ($1,057)
CZ08 SCE/SCG $13,726 0.98 ($242) 1.05 $767
CZ09 SCE/SCG $13,726 0.88 ($1,890) 0.94 ($988)
CZ10 SCE/SCG $13,726 0.96 ($676) 1.02 $305
CZ10 SDGE $13,726 1.51 $8,054 1.50 $7,852
CZ11 PGE $13,726 1.10 $1,569 1.16 $2,477
CZ12 PGE $13,726 0.80 ($3,169) 0.84 ($2,510)
CZ12 SMUD/PGE $13,726 0.93 ($1,109) 0.98 ($342)
CZ13 PGE $13,726 1.27 $4,170 1.33 $5,215
CZ14 SCE/SCG $13,726 1.15 $2,295 1.22 $3,470
CZ14 SDGE $13,726 1.66 $10,386 1.65 $10,164
CZ15 SCE/SCG $13,726 1.37 $5,788 1.46 $7,191
CZ16 PGE $13,726 0.81 ($3,006) 0.85 ($2,338)
2025 Energy Code: Existing Single Family Building Upgrades 19
2025/08/15
Table 1515. [Pre-1978] 3 kW PV without Solar Tax Credit (CARE)
Climate Zone Electric/ Gas Utility
First Incremental Cost
On-Bill Savings
On-Bill B/C Modest Gas Escalation
On-Bill NPV Modest Gas Escalation
On-Bill B/C High Gas Escalation
On-Bill NPV High Gas Escalation
CZ01 PGE $13,726 0.62 ($6,030) 0.65 ($5,522)
CZ02 PGE $13,726 0.64 ($5,707) 0.67 ($5,182)
CZ03 PGE $13,726 0.60 ($6,344) 0.63 ($5,853)
CZ04 PGE $13,726 0.83 ($2,725) 0.87 ($2,042)
CZ05 PGE $13,726 0.60 ($6,266) 0.63 ($5,771)
CZ05 PGE/SCG $13,726 0.60 ($6,266) 0.63 ($5,771)
CZ06 SCE/SCG $13,726 0.71 ($4,578) 0.75 ($3,852)
CZ07 SDGE $13,726 0.71 ($4,508) 0.71 ($4,604)
CZ08 SCE/SCG $13,726 0.97 ($483) 1.03 $510
CZ09 SCE/SCG $13,726 0.90 ($1,530) 0.96 ($605)
CZ10 SCE/SCG $13,726 0.97 ($465) 1.03 $530
CZ10 SDGE $13,726 1.19 $3,032 1.18 $2,872
CZ11 PGE $13,726 1.07 $1,150 1.13 $2,036
CZ12 PGE $13,726 0.79 ($3,324) 0.83 ($2,673)
CZ13 PGE $13,726 1.23 $3,587 1.29 $4,601
CZ14 SCE/SCG $13,726 1.17 $2,662 1.25 $3,861
CZ14 SDGE $13,726 1.28 $4,436 1.27 $4,264
CZ15 SCE/SCG $13,726 1.57 $8,962 1.67 $10,572
CZ16 PGE $13,726 0.79 ($3,342) 0.83 ($2,692)
2025 Energy Code: Existing Single Family Building Upgrades 20
2025/08/15
Table 1616. [1978-1991] 3 kW PV without Solar Tax Credit (CARE)
Climate Zone Electric/ Gas Utility
First Incremental Cost
On-Bill Savings
On-Bill B/C Modest Gas Escalation
On-Bill NPV Modest Gas Escalation
On-Bill B/C High Gas Escalation
On-Bill NPV High Gas Escalation
CZ01 PGE $13,726 0.60 ($6,343) 0.63 ($5,851)
CZ02 PGE $13,726 0.56 ($6,845) 0.59 ($6,380)
CZ03 PGE $13,726 0.57 ($6,757) 0.60 ($6,287)
CZ04 PGE $13,726 0.76 ($3,715) 0.80 ($3,085)
CZ05 PGE $13,726 0.57 ($6,686) 0.60 ($6,213)
CZ05 PGE/SCG $13,726 0.57 ($6,686) 0.60 ($6,213)
CZ06 SCE/SCG $13,726 0.61 ($6,195) 0.64 ($5,575)
CZ07 SDGE $13,726 0.62 ($6,004) 0.61 ($6,087)
CZ08 SCE/SCG $13,726 0.91 ($1,483) 0.96 ($555)
CZ09 SCE/SCG $13,726 0.85 ($2,368) 0.90 ($1,497)
CZ10 SCE/SCG $13,726 0.90 ($1,597) 0.96 ($676)
CZ10 SDGE $13,726 1.10 $1,560 1.09 $1,413
CZ11 PGE $13,726 0.98 ($295) 1.03 $515
CZ12 PGE $13,726 0.72 ($4,320) 0.76 ($3,722)
CZ13 PGE $13,726 1.12 $1,893 1.18 $2,818
CZ14 SCE/SCG $13,726 1.07 $1,051 1.14 $2,144
CZ14 SDGE $13,726 1.18 $2,878 1.17 $2,719
CZ15 SCE/SCG $13,726 1.37 $5,735 1.45 $7,135
CZ16 PGE $13,726 0.74 ($4,126) 0.78 ($3,517)
2025 Energy Code: Existing Single Family Building Upgrades 21
2025/08/15
Table 1717. [1992-2010] 3 kW PV without Solar Tax Credit (CARE)
Climate Zone Electric/ Gas Utility
First Incremental Cost
On-Bill Savings
On-Bill B/C Modest Gas Escalation
On-Bill NPV Modest Gas Escalation
On-Bill B/C High Gas Escalation
On-Bill NPV High Gas Escalation
CZ01 PGE $13,726 0.56 ($6,963) 0.59 ($6,504)
CZ02 PGE $13,726 0.26 ($11,640) 0.20 ($12,611)
CZ03 PGE $13,726 0.55 ($6,997) 0.58 ($6,540)
CZ04 PGE $13,726 0.62 ($5,900) 0.66 ($5,385)
CZ05 PGE $13,726 0.56 ($6,932) 0.59 ($6,471)
CZ05 PGE/SCG $13,726 0.56 ($6,932) 0.59 ($6,471)
CZ06 SCE/SCG $13,726 0.51 ($7,652) 0.55 ($7,127)
CZ07 SDGE $13,726 0.48 ($8,115) 0.48 ($8,180)
CZ08 SCE/SCG $13,726 0.78 ($3,430) 0.83 ($2,629)
CZ09 SCE/SCG $13,726 0.72 ($4,462) 0.76 ($3,728)
CZ10 SCE/SCG $13,726 0.76 ($3,748) 0.81 ($2,968)
CZ10 SDGE $13,726 0.86 ($2,225) 0.85 ($2,340)
CZ11 PGE $13,726 0.79 ($3,259) 0.83 ($2,605)
CZ12 PGE $13,726 0.63 ($5,876) 0.66 ($5,359)
CZ13 PGE $13,726 0.89 ($1,678) 0.94 ($941)
CZ14 SCE/SCG $13,726 0.89 ($1,676) 0.95 ($761)
CZ14 SDGE $13,726 0.95 ($838) 0.94 ($964)
CZ15 SCE/SCG $13,726 0.99 ($142) 1.06 $873
CZ16 PGE $13,726 0.63 ($5,850) 0.66 ($5,333)
2025 Energy Code: Existing Single Family Building Upgrades 22
2025/08/15
6 References
California Energy Commission. (2017). Rooftop Solar PV System. Measure number: 2019-
Res-PV-D Prepared by Energy and Environmental Economics, Inc. Retrieved from
https://efiling.energy.ca.gov/getdocument.aspx?tn=221366
California Energy Commission. (2021b). Final Express Terms for the Proposed Revisions to
the 2022 Energy Code Reference Appendices. Retrieved from
https://efiling.energy.ca.gov/Lists/DocketLog.aspx?docketnumber=21-BSTD-01
California Energy Commission. (2023). 2025 Energy code Hourly Factors. Retrieved from
https://www.energy.ca.gov/files/2025-energy-code-hourly-factors
California Energy Commission. (2023). Draft 2025 Energy Code Express Terms. Retrieved
from
https://efiling.energy.ca.gov/GetDocument.aspx?tn=252915&DocumentContentId=88
051
California Public Utilities Commission. (2021a). Utility Costs and Affordability of the Grid of
the Future: An Evaluation of Electric Costs, Rates, and Equity Issues Pursuant to
P.U. Code Section 913.1. Retrieved from https://www.cpuc.ca.gov/-/media/cpuc-
website/divisions/office-of-governmental-affairs-division/reports/2021/senate-bill-695-
report-2021-and-en-banc-whitepaper_final_04302021.pdf
California Public Utilities Commission. (2021b). Database for Energy-Efficient resources
(DEER2021 Update). Retrieved April 13, 2021, from
http://www.deeresources.com/index.php/deer-versions/deer2021
E-CFR. (2020). https://www.ecfr.gov/cgi-
bin/retrieveECFR?gp=&SID=8de751f141aaa1c1c9833b36156faf67&mc=true&n=pt1
0.3.431&r=PART&ty=HTML#se10.3.431_197. Retrieved from Electronic Code of
Federal Regulations: https://www.ecfr.gov/cgi-
bin/retrieveECFR?gp=&SID=8de751f141aaa1c1c9833b36156faf67&mc=true&n=pt1
0.3.431&r=PART&ty=HTML#se10.3.431_197
Statewide CASE Team. (2020). Residential Energy Savings and Process Improvements for
Additions and Alterations.
Statewide CASE Team. (2023). Multifamily Domestic Hot Water. Retrieved from
https://title24stakeholders.com/wp-content/uploads/2023/08/2025_T24_CASE-
Report-_MF-DHW-Final-1.pdf
Statewide CASE Team. (2023). Residential HVAC PErformance. Retrieved from
https://title24stakeholders.com/wp-
content/uploads/2023/11/Revised_2025_T24_Final-CASE-Report-RES-HVAC-
Performance.pdf
2025 Energy Code: Existing Single Family Building Upgrades 23
2025/08/15
Statewide Reach Codes Team. (2021). 2019 Cost-Effectiveness Study: Existing Single
Family Residential Buidling Upgrades. Retrieved from
https://localenergycodes.com/content/resources
2025 Energy Code: Existing Single Family Building Upgrades 24
2025/08/15
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Revision: 1.0
Last modified: 2025/08/15
*NOT YET APPROVED*
1
0290178_20250826_ms29
Ordinance No.
Emergency Ordinance of the Council of the City of Palo Alto Amending
Chapter 16.04 (California Building Code, California Code of Regulations,
Title 24, Part 2, Volumes 1 & 2) of the Palo Alto Municipal Code to Add
New Local Amendments and Associated Findings Related to Certificates
of Occupancy and Definitions
The Council of the City of Palo Alto does ORDAIN as follows:
SECTION 1. Findings and Declarations. The City Council finds and declares as follows:
A. Every three years, a new version of the California Building Standards Code (CBSC, or Title
24) is published. Local jurisdictions may enforce the model code as published or, subject
to certain requirements, adopt local amendments.
B. Most recently, the City adopted the 2022 edition of the California Building Code with
local amendments pursuant to Ordinance 5564. The purpose of this ordinance is to make
additional local amendments to the Building Code to clarify types of projects exempted
from Use and Occupancy certificates and make clarifying edits to the definitions section.
C. The changes shown in this ordinance are relative to the existing provisions of the Palo
Alto Municipal Code (PAMC) as adopted by Ordinance 5564. The City’s local amendments
are more restrictive building standards than those provided in the California Building
Standards Code.
D. Recent legislation, Assembly Bill (AB) 130 (2025), limits local jurisdictions’ authority to
amend the California Building Standards Code beginning October 1, 2025, and ending
June 1, 2031. The Council desires to make these amendments effective before the AB
130 moratorium begins.
E. The Council declares that this emergency ordinance, which is effective immediately, is
necessary as an emergency measure to preserve the public peace, health, or safety by
ensuring that the City may enforce its local amendments to the California Building Code
during the AB 130 moratorium.
F. California Health and Safety Code sections 17958.5 and 17958.7 requires that the City, in
order to make changes or modifications in the requirements contained in the California
Building Standards Code on the basis of local conditions, make express finding that such
modifications or changes are reasonably necessary because of local climatic, geological,
or topographical conditions. The required findings are attached to this ordinance as
Exhibit A.
SECTION 2. Section 16.04.190 of Chapter 16.04 (California Building Code,
California Code of Regulations, Title 24, Part 2, Volumes 1 & 2) of Title 16 (Building
Regulations) of the Palo Alto Municipal Code is hereby amended as follows (additions
*NOT YET APPROVED*
2
0290178_20250826_ms29
underlined and deletions struck-through, bracketed ellipses indicate text of the California
Building Code, 2022 Edition, that has been adopted as amended by Ordinance 5564 but is
omitted for brevity):
16.04.190 Section 111.1 Use and occupancy.
111.1 Use and occupancy. A building or structure shall not be used or occupied,
and a change in the existing occupancy of a building or structure or portion
thereof shall not be made, until the chief building official has issued a certificate
of occupancy therefor as provided herein. Issuance of a certificate of occupancy
shall not be construed as an approval of a violation of the provisions of this code
or of other ordinances of the jurisdiction.
Exception: Certificates of occupancy are not required or issued for:
1. Work exempted from permits under Section 105.2
2. Group R – Division 2, 3 occupancies Division 3 and Group U occupancies
located on a single-family residential/agricultural lot.
3. Group U occupancies accessory to R3 and R2 occupancies. Non-
residential “core and shell” or similar construction (exterior envelope
and structural framework) without finalized tenant improvement(s).
4. Site development without a building or buildings as defined in section
202.
[…]
SECTION 3. Section 16.04.235 (Section 202 Definitions) is added to Chapter 16.04
(California Building Code, California Code of Regulations, Title 24, Part 2, Volumes 1 & 2) of Title
16 Building Regulations) of the Palo Alto Municipal Code to read as follows (additions underlined,
bracketed ellipses indicate text of the California Building Code, 2022 Edition, that has been
adopted without amendment but is omitted for brevity):
16.04.235 Section 202 Definitions
[…]
FLOOR AREA, GROSS. The floor area within the inside perimeter of the exterior walls of the
building under consideration, exclusive of vent shafts and courts, without deduction for
corridors, stairways, ramps, closets, the thickness of interior walls, columns or other features.
The floor area of a building, or portion thereof, not provided with surrounding exterior walls
shall be the usable area under the horizontal projection of the roof or floor above. The gross
floor area shall not include shafts with no openings or interior courts. For the purposes of Title
18 (Zoning), the definition of “gross floor area” in Section 18.04.030 shall apply.
*NOT YET APPROVED*
3
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[…]
FLOOR AREA, NET. The actual occupied area not including unoccupied accessory areas such as
corridors, stairways, ramps, toilet rooms, mechanical rooms and closets. For the purposes of
Title 18 (Zoning), the definition of “net floor area” in Section 18.04.030 shall apply.
[…]
SECTION 4. The Council adopts the findings for local amendments to the California
Building Code, 2022 Edition, attached hereto as Exhibit “A” and incorporated herein by
reference.
SECTION 5. The Council finds that this ordinance is exempt from the provisions of
the California Environmental Quality Act (“CEQA”), pursuant to Section 15061(b)(3) of the
CEQA Guidelines, because it can be seen with certainty that there is no possibility that the
amendments herein adopted will have a significant effect on the environment.
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SECTION 6. Pursuant to Palo Alto Municipal Code Section 2.04.270, this ordinance shall
be effective immediately upon adoption if passed by a vote of four-fifths of the council members
present.
INTRODUCED:
PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
____________________________ ____________________________
City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
____________________________ ____________________________
City Attorney or Designee City Manager
____________________________
Director of Planning and Development
Services
____________________________
Director of Administrative Services
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Exhibit A
FINDINGS FOR LOCAL AMENDMENTS TO CALIFORNIA BUILDING CODE,
TITLE 24, PART 2, VOLUMES 1 AND 2
Section 17958 of the California Health and Safety Code provides that the City may make changes
to the provisions of the California Building Standards Code. Sections 17958.5 and 17958.7 of the
Health and Safety Code require that for each proposed local change to those provisions of the
California Building Standards Code which regulate buildings used for human habitation, the City
Council must make findings supporting its determination that each such local change is reasonably
necessary because of local climatic, geological, or topographical conditions.
Local building regulations having the effect of amending the uniform codes, which were adopted
by the City prior to November 23, 1970, were unaffected by the regulations of Sections 17958,
17958.5 and 17958.7 of the Health and Safety Code. Therefore, amendments to the uniform
codes which were adopted by the City Council prior to November 23, 1970 and have been carried
through from year to year without significant change, need no required findings. Also,
amendments to provisions not regulating buildings used for human habitation do not require
findings.
Code: California Building Code, Title 24, Part 2, Volumes 1 and 2
Chapter(s),
Section(s),
Table(s),
Appendices
Title Added Amended Deleted Justification
(See keys
below)
Ch. 1, Div. II,
Part 2, Section
111.1
Use and occupancy A
Ch. 2, Section
202
Definitions A
Key to Justification for Amendments to Title 24 of the California Code of Regulations
A This is an administrative amendment to clarify and establish civil and
administrative procedures, regulations, or rules to enforce and administer the
activities by the Palo Alto Building Inspection Department. These administrative
amendments do not need to meet HSC 18941.5/17958/13869 per HSC 18909(c).
C This amendment is justified on the basis of a local climatic condition. The seasonal
climatic conditions during the late summer and fall create severe fire hazards to
the public health and welfare in the City. The hot, dry weather frequently results
in wild land fires on the brush covered slopes west of Interstate 280. The
aforementioned conditions combined with the geological characteristics of the
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hills within the City create hazardous conditions for which departure from
California Building Standards Code is required. Natural gas combustion and gas
appliances emit a wide range of air pollutants, such as carbon monoxide (CO),
nitrogen oxides (NOx, including nitrogen dioxide (NO2)), particulate matter (PM),
and formaldehyde, which according to a UCLA Study, have been linked to various
acute and chronic health effects, and additionally exceed levels set by national and
California-based ambient air quality standards. The burning of fossil fuels used in
the generation of electric power and heating of buildings contributes to climate
change, which could result in rises in sea level, including in San Francisco Bay, that
could put at risk Palo Alto homes and businesses, public facilities, and Highway 101
(Bayshore Freeway), particularly the mapped Flood Hazard areas of the City.
Energy efficiency is a key component in reducing GHG emissions, and construction
of more energy efficient buildings can help Palo Alto reduce its share of the GHG
emissions that contribute to climate change. All-electric new buildings benefit the
health, safety, and welfare, of Palo Alto and its residents. Requiring all-electric
construction, without gas infrastructure will reduce the amount of greenhouse gas
produced in Palo Alto and will contribute to reducing the impact of climate change
and the associated risks. Due to decrease in annual rain fall, Palo Alto experiences
the effect of drought and water saving more than some other communities in
California. Embodied carbon of concrete is a significant contributor to greenhouse
gas emissions and climate change, and this amendment includes a requirement to
use low-carbon concrete. Providing additional capacity for electric vehicle use
reduces use of gasoline which is a major contributor to climate change.
E Green building enhances the public health and welfare by promoting the
environmental and economic health of the City through the design, construction,
maintenance, operation and deconstruction of buildings and sites by incorporating
green practices into all development. The green provisions in this Chapter are
designed to achieve the following goals:
(a) Increase energy efficiency in buildings;
(b) Reduce the use of natural gas in buildings which improves indoor
environmental quality and health;
(c) Reduce the use of natural gas which will reduce the natural gas
infrastructure and fire risk over time;
(d) Reduce the embodied carbon of concrete which reduces greenhouse
gas emissions;
(e) Increase water and resource conservation;
(f) Reduce waste generated by construction and demolition projects;
(g) Provide durable buildings that are efficient and economical to own and operate;
(h) Promote the health and productivity of residents, workers, and visitors to the city;
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(i) Recognize and conserve the energy embodied in existing buildings;
(j) Increase capacity for use of electric vehicles which reduces greenhouse
gas emissions and improves air quality;
(k) Encourage alternative transportation; and
(l) Reduce disturbance of natural ecosystems.
G This amendment is justified on the basis of a local geological condition. The City of
Palo Alto is subject to earthquake hazard caused by its proximity to San Andreas
fault. This fault runs from Hollister, through the Santa Cruz Mountains, epicenter
of the 1989 Loma Prieta earthquake, then on up the San Francisco Peninsula, then
offshore at Daly City near Mussel Rock. This is the approximate location of the
epicenter of the 1906 San Francisco earthquake. The other fault is Hayward Fault.
This fault is about 74 mi long, situated mainly along the western base of the hills
on the east side of San Francisco Bay. Both of these faults are considered major
Northern California earthquake faults which may experience rupture at any time.
Thus, because the City is within a seismic area which includes these earthquake
faults, the modifications and changes cited herein are designed to better limit
property damage as a result of seismic activity and to establish criteria for repair of
damaged properties following a local emergency. Reduction or eliminating of
natural gas infrastructure over time will reduce maintenance costs and fire risk in
difficult geological conditions.
T The City of Palo Alto topography includes hillsides with narrow and winding access,
which makes timely response by fire suppression vehicles difficult. Palo Alto is
contiguous with the San Francisco Bay, resulting in a natural receptor for storm and
waste water run-off. Also, the City of Palo Alto is located in an area that is potentially
susceptible to liquefaction during a major earthquake. The surface condition
consists mostly of stiff to dense sandy clay, which is highly plastic and expansive in
nature. The aforementioned conditions within the City create hazardous
conditions for which departure from California Building Standards Code is
warranted. In addition, the reduction or elimination of natural gas infrastructure
reduces the likelihood of fire or environmental damage should they become
disrupted due to challenging topographic conditions during construction or repair.
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Ordinance No. ____
Emergency Ordinance of the Council of the City of Palo Alto Amending Chapter
16.17 (California Energy Code, California Code of Regulations, Title 24, Part 6) of
the Palo Alto Municipal Code to Adopt the 2025 California Energy Code, Along
With Local Amendments Thereto, to Add FlexPath and Air Conditioner Time-of-
Replacement Requirements.
The Council of the City of Palo Alto does ORDAIN as follows:
SECTION 1. Findings and Declarations.
A. The City of Palo Alto adopted a Sustainability and Climate Action Plan, or S/CAP, to meet
the City's stated goal of "80 x 30": reducing greenhouse gas emissions 80% below 1990
levels by 2030.
B. The S/CAP outlines goals and key actions in eight areas, one of which is energy and more
specifically, energy efficiency and electrification. The goals for the energy area of the
S/CAP are to reduce GHG emissions from the direct use of natural gas in Palo Alto’s
building sector by at least 60% below 1990 levels (116,400 MT CO2e reduction) and to
modernize the electric grid to support increased electric demand to accommodate state-
of-the-art technology.
C. One key action the City is taking to accomplish those goals is to use codes and ordinances
- such as the energy reach code, green building ordinance, zoning code, or other
mandates - to facilitate electrification in both existing buildings and new construction
projects where feasible.
D. The purpose of this ordinance is to formally adopt California Code of Regulations, Title 24,
Part 6, 2025 California Energy Code, with local amendments in furtherance of the City of
Palo Alto’s S/CAP goals and other sustainability-related goals included in the City’s 2030
Comprehensive Plan. The amendments adopted herein are more restrictive than the
building standards in Title 24, Part 6.
E. Recent legislation, Assembly Bill (AB) 130 (2025), limits local jurisdictions’ authority to
amend the California Building Standards Code beginning October 1, 2025, and ending
June 1, 2031. The Council desires to adopt these amendments before the AB 130
moratorium begins. The Council may in the future adopt additional amendments to the
2025 California Energy Code that are not subject to, or are exempt from, the AB 130
moratorium.
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F. The Council declares that this emergency ordinance is necessary as an emergency
measure to preserve the public peace, health, or safety by ensuring that the City may
enforce its local amendments to the California Energy Code during the AB 130
moratorium. These local amendments are necessary to mitigate the public health and
safety impacts of GHG emissions from natural gas usage by incentivizing energy efficiency
and electrification.
G. Additionally, the Council finds that these changes or modifications to the California
Energy Code are necessary to implement a local code amendment that is adopted to align
with a general plan approved on or before June 10, 2025, and that permits mixed-fuel
residential construction consistent with federal law while also incentivizing all-electric
construction as part of an adopted greenhouse gas emissions reduction strategy. The City
of Palo Alto’s Comprehensive Plan was adopted on November 13, 2017, and amended on
December 19, 2022. The relevant policies and goals in the Comprehensive Plan include,
but are not limited to: Goal N-7 (“A clean, efficient energy supply that makes use of cost-
effective renewable resources”) and Goal N-8 (“Actively support regional efforts to
reduce our contribution to climate change while adapting to the effects of climate change
on land uses and city services”) contained in the Natural Environment Element and
associated policies and programs. These include Policy N-7.4 (“Maximize the conservation
and efficient use of energy in new and existing residences and other buildings in Palo
Alto”), Program N-7.4.1 (“Continue timely incorporation of State and federal energy
efficiency standards and policies in relevant City codes, regulations and procedures and
higher local efficiency standards that are cost-effective”), Policy N-7.7: (“Explore a variety
of cost-effective ways to reduce natural gas usage in existing and new buildings in Palo
Alto in order to reduce associated greenhouse gas emissions”), and especially Policy N-
8.2 (“With guidance from the City’s Sustainability and Climate Action Plan (S/CAP) and its
subsequent updates and other future planning efforts, reduce greenhouse gas emissions
from City operations and from the community”).
H. California Health and Safety Code sections 17958.5 and 17958.7 require that the City, in
order to make changes or modifications in the requirements contained in the California
Building Standards Code on the basis of local conditions, make express finding that such
modifications or changes are reasonably necessary because of local climatic, geological
or topographical conditions. The required findings are attached to this ordinance as
Exhibit A.
SECTION 2. Chapter 16.17 (California Energy Code, California Code of Regulations,
Title 24, Part 6) of the Palo Alto Municipal Code is hereby amended by repealing in its
entirety existing Chapter 16.17 and adopting a new Chapter 16.17 to read as follows:
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CHAPTER 16.17
CALIFORNIA ENERGY CODE,
CALIFORNIA CODE OF REGULATIONS, TITLE 24, PART 6
Sections
16.17.010 2025 California Energy Code, Title 24, Part 6 adopted.
16.17.020 Cross ‐ References to California Energy Code
16.17.030 Local Amendments
16.17.040 Administration & Enforcement of 2025 California Energy Code
16.17.050 Violations – Penalties
16.17.060 Subchapter 1 All Occupancies – General Provisions
16.17.070 Reserved
16.17.080 Reserved
16.17.090 Reserved
16.17.100 Reserved
16.17.110 Reserved
16.17.120 Subchapter 7 Single‐family Residential Building – Mandatory Features
and Devices
16.17.130 Reserved
16.17.140 Subchapter 9 Single‐Family Residential Buildings—Additions And
Alterations To Existing Residential Buildings
16.17.150 Reserved
16.17.160 Reserved
16.17.170 Infeasibility Exemption
16.17.180 Appeal
16.17.010 2025 California Energy Code, Title 24, Part 6 adopted.
The California Energy Code, 2025 Edition, Title 24, Part 6 of the California Code of
Regulations together with those omissions, amendments, exceptions and additions
thereto, is adopted and hereby incorporated in this Chapter by reference and made a part
hereof the same as if fully set forth herein. Except as amended herein, all requirements of
the California Energy Code, 2025 Edition, Title 24, Part 6 of the California Code of
Regulations shall apply.
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Unless superseded and expressly repealed, references in City of Palo Alto forms, documents and
regulations to the chapters and sections of the former editions of the California Code of Regulations,
Title 24, shall be construed to apply to the corresponding provisions contained within the California
Code of Regulations, Title 24, 2025. Ordinance No. 5627 of the City of Palo Alto and all other
ordinances or parts of ordinances in conflict herewith are hereby suspended and expressly repealed.
One copy of the California Energy Code, 2025 Edition, has been filed for use and examination of the
public in the Office of the Chief Building Official of the City of Palo Alto.
16.17.020 Cross ‐ References to California Energy Code
The provisions of this Chapter contain cross-references to the provisions of the California Energy
Code, 2025 Edition, in order to facilitate reference and comparison to those provisions.
16.17.030 Local Amendments
The provisions of this Chapter shall constitute local amendments to the cross-referenced
provisions of the California Energy Code, 2025 Edition, and shall be deemed to replace the cross-
referenced sections of said Code with the respective provisions set forth in this Chapter.
16.17.040 Administration & Enforcement of 2025 California Energy Code
Administration and enforcement of this code shall be governed by Chapter 1, Division II of the
2025 California Building Code as amended by Palo Alto Municipal Code Chapter 16.04.
16.17.050 Violations ‐ Penalties
It is unlawful for any person to violate any provision or to fail to comply with any of the
requirements of this Chapter or any permits, conditions, or variances granted under this Chapter.
Violators shall be subject to any penalty or penalties authorized by law, including but not limited
to: administrative enforcement pursuant to Chapters 1.12 and 1.16 of the Palo Alto Municipal
Code; and criminal enforcement pursuant to Chapter 1.08 of the Palo Alto Municipal Code. Each
separate day or any portion thereof during which any violation of this Chapter occurs or
continues shall be deemed to constitute a separate offense.
When the chief building official determines that a violation of this Chapter has occurred, the chief
building official may record a notice of pendency of code violation with the Office of the County
Recorder stating the address and owner of the property involved. When the violation has been
corrected, the chief building official shall issue and record a release of the notice of pendency of
code violation.
16.17.060 Subchapter 1 All Occupancies – General Provisions
Section 100.0 – SCOPE is amended to add new subsections (i) and (j) as follows:
(i) Single Family Building Remodel Energy Reach Code - Purpose and Intent.
In addition to all requirements of the California Energy Code applicable to Single Family
building additions and alterations, the energy efficiency, renewable energy, and electric
readiness measures specified in Sections 150.0(w) and 150.0(x) shall be required for
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certain single-family additions and alterations.
(j) SUBSTANTIAL REMODEL (or “50-50-50” RULE) Any project that affects the
removal or replacement of 50% or more linear length of the existing exterior walls of
the building, 50% or more linear length of the existing exterior wall where the plate
height is raised, or 50% or more of the existing roof framing area is removed or
replaced, over a 3-year period is considered a substantial remodel.
a. Any permit(s) applied for will trigger a review of a 3-year history of
the project. This review will result in determining if a substantial
remodel has occurred.
b. The Chief Building Official or designee shall make the final determination
regarding the application if a conflict occurs.
Section 100.1(b) of Subchapter 1 of the California Energy Code is amended by adding the
following definitions:
COVERED SINGLE FAMILY PROJECT shall mean any project in a Single-Family residential
building originally permitted for construction before 2011 that meets any of the
following criteria:
1. All residential building additions and/or alterations exceeding 1000 square feet,
as amended by this Chapter and as applicable to the scope of work.
For Covered Single Family Projects, the area of alterations will include any
construction or renovation to an existing structure other than repair or addition.
Alterations include raising the plate height, historic restoration, changes or
rearrangements of the structural parts or elements, and changes or
rearrangement of bearing walls and full height partitions.
Normal maintenance, reroofing, painting or wall papering, floor finishes,
replacement-in-kind of mechanical, plumbing and electrical systems, or replacing
or adding new kitchen counter and similar furniture, plumbing fixture to the
building are excluded for the purposes of establishing scope of Covered Single-
Family Projects.
The area of alteration should be limited to the footprint of element(s) being
altered.
The sum of the footprint of the elements being altered with respect to
Covered Single Family Projects, shall be calculated using the following
methodology:
1. Raising the plate height: The calculation with respect to raising
of the plate height will be based on the area of the footprint in
which the plate height is being increased. Plate height means
the vertical distance measured from the top of the finished
floor to the top of the plates.
2. Historic restoration: The calculation with respect to historic
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restoration will be based on the area of work covered in the
California Historical Building Code (Title 24, Part 8).
3. Structural parts or elements: The calculation with respect to
changes or rearrangements of the structural parts or elements
will be based on the sum of the individual footprints of each
structural change or rearrangement. The footprint shall be
calculated based on the proposed design and inclusive of any
demolished structural parts or elements.
4. Bearing walls and full height partition: The calculation with
respect to changes or rearrangement of walls and full height
partitions will be based on the footprint of any demolished wall
or full height partition and any new wall or new full height
partition.
Exception: Attached and detached Accessory Dwelling Units, ADU
conversions of existing structures shall meet the California Energy
Code Mandatory measures only.
CERTIFIED ENERGY ANALYST is a person registered as a Certified Energy Analyst with the
California Association of Building Energy Consultants as of the date of submission of a
Certificate of Compliance as required under section 10-103 of Building Energy Efficiency
Standards for residential and nonresidential buildings.
ELECTRIC EQUIPMENT OR APPLIANCE means one or more devices that use
electric energy to serve the needs for heating and cooling, water heating, cooking,
and electric vehicle charging. In addition, ancillary equipment such as an electric
panel, photovoltaic equipment, and energy storage systems that are deployed to
support such devices shall be considered Electric Equipment or Appliance.
ELECTRIC HEATING APPLIANCE is a device that produces heat energy to create a
warm environment by the application of electric power to resistance elements,
refrigerant compressors, or dissimilar material junctions, as defined in the
California Mechanical Code.
SUBSTANTIAL REMODEL (or “50‐50‐50” RULE) Any project that affects the removal
or replacement of 50% or more linear length of the existing exterior walls of the
building, 50% or more linear length of the existing exterior wall where the plate
height is raised, or 50% or more of the existing roof framing area is removed or
replaced, over a 3-year period is considered a substantial remodel. (Refer to Section
100.0 (j).
16.17.070 Reserved
16.17.080 Reserved
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16.17.090 Reserved
16.17.100 Reserved
16.17.110 Reserved
16.17.120 SUBCHAPTER 7 SINGLE‐FAMILY RESIDENTIAL BUILDING –
MANDATORY FEATURES AND DEVICES
Section 150.0 MANDATORY FEATURES AND DEVICES
Section 150.0 of Subchapter 7 of the California Energy Code is amended to read as follows
(additions underlined, deletions struck through):
Single-family residential buildings shall comply with the applicable requirements
of Sections 150(a) through 150.0(x).
NOTE: The requirements of Sections 150.0 (a) through (v) apply to newly
constructed buildings. Sections 150.2(a) and 150.2(b) specify which requirements
of Sections 150.0(a) through 150.0(v) also apply to additions or alterations. The
electric readiness requirements of Sections 150.0 (n), (t), (u) and (v) apply to
residential remodels or additions when the applicable system is included in the
remodel. In addition, Covered Single Family Projects shall also be required to
comply with Section 150.0(w) and certain additions and alterations shall also be
required to comply with Section 150.0(x).
Subsections 150.0 (a) – (s) are adopted without modification.
(t) Heat pump space heater ready. Systems using gas or propane
furnace to serve individual dwelling units shall include the
following:
1. A dedicated 240 volt branch circuit wiring shall be installed within 3
feet from the furnace and accessible to the furnace with no
obstructions. The branch circuit conductors shall be rated at 30 amps
minimum. The blank cover shall be identified as “240V ready.” All
electrical components shall be installed in accordance with the California
Electrical Code.
2. The main electrical service panel shall have a reserved space to
allow for the installation of a double pole circuit breaker for a
future heat pump space heater installation. The reserved space
shall be permanently marked as “For Future 240V use.”
3. A designated exterior location for a future heat pump compressor
unit.
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Subsections 150.0 (u) – (v) are adopted without modification.
A new Subsection, (w), is added to Section 150.0 as follows:
(w) A Covered Single-Family Project shall install a set of measures based on
the building vintage from the Measure Menu Table, Table 150.0-J, to
achieve a total Measure Point Score that is equal to or greater than the
Target Score in Table 150.0-I. In addition, all mandatory measures listed
in Table 150.0-J shall be installed. Measure verification shall be
explicitly included as an addendum to the Certificate of Compliance to
be filed pursuant to 2025 Title 24, Part 6, Section 10-103.
Installed measures shall meet the specifications in Table 150.0-K.
Building vintage is the year in which the original construction permit for
the building was submitted, as documented by building department
records, or the permit issue date of an addition or alteration that
satisfied the Performance Standards (California Energy Code, Title 24,
Part 6, Section 150.1(b)) that were in effect at that time. Unless
otherwise specified, the requirements shall apply to the entire dwelling
unit, not just the additional or altered portion. Measures from the
Measure Menu table that are to be installed to satisfy requirements
under the California Energy Code, Title 24, Part 6, may not count
towards compliance with these requirements. Where these
requirements conflict with other California Energy Code requirements,
the stricter requirements shall prevail.
Exception 1 to Section 150.0(w): Creation of a new accessory dwelling
unit or junior accessory dwelling unit that is within the existing space of
a single family dwelling or accessory structure and include an expansion
of not more than 150 square feet beyond the same physical dimensions
as the existing accessory structure. An expansion beyond the physical
dimensions of the existing accessory structure shall be limited to
accommodating ingress and egress. Or, if the project would not
otherwise be a Covered Single Family Project were it not for the inclusion
of an accessory dwelling unit or junior accessory dwelling unit that meets
the criteria above.
Exception 2 to Section 150.0(w): Mobile Homes, Manufactured Housing,
or Factory-built Housing as defined in Division 13 of the California Health
and Safety 12 Code (commencing with Section 17000 of the Health and
Safety Code).
Exception 3 to Section 150.0(w): Emergency Housing pursuant to
Appendix P of the California Building Code.
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Exception 4 to Section 150.0(w): An alteration that consists solely of roof
and/or fenestration projects.
Exception 5 to Section 150.0(w): If the project includes circumstances
which constitute hardship or infeasibility, the applicant may request an
exemption. In applying for an exemption, the burden is on the applicant
to show hardship or infeasibility. Circumstances that constitute hardship
or infeasibility shall include one or more of the following:
(a) That the cost of achieving compliance exceeds 20% of the
valuation of cost of the project;
(b) That it is technically infeasible to achieve compliance through all
packages due to conditions specific to the project;
(c) That strict compliance with these standards would create or
maintain a hazardous condition(s) and present a life safety risk to
the occupants.
Applicants shall follow the Infeasibility procedures in PAMC
16.17.170.
Exception 6 to Section 150.0(w): If the applicant demonstrates, using
Commission-certified compliance software as specified by Section 10-
109(c) and Section 10-116, that the Energy Budget of the Proposed
Building Design would be less than or equal to the Energy Budget of the
building under the project if it included any set of measures that would
achieve compliance under this Section 150.0(w).
Certificate of Compliance. The Certificate of Compliance shall be
prepared and signed by a Certified Energy Analyst and the energy
budget for the Proposed Design shall be no greater than the
Standard Design Building.
Exception 7 to Section 150.0(w): If the dwelling unit has previously
installed measures from the Measure Menu, Table 150.0-J, and
compliance can be demonstrated to the building official, then these
measures shall not be required to be newly installed, and appropriate
credit shall be included in the applicable compliance calculations.
Exception 8 to Section 150.0(w): A measure that is necessary for
compliance is prohibited because of a covenant or other deed restriction
on the property, such as a homeowners association covenant.
Exception 9 to Section 150.0(w): A Covered Single-Family Project, other
than an addition, that would not otherwise be subject to this section
150.0(w) but for installation of solar PV, solar water heating, EV charging,
electrical upgrades for solar PV or EV charging, or energy storage.
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Exception 10 to Section 150.0(w): The project is solely related to a repair,
as defined by Title 24 Part 2 Section 202.
Exception 11 to Section 150.0(w) and 150.0(x): A Covered Single Family
Project that consists solely of medically necessary improvements or solely
of seismic safety improvements.
TABLE 150.0‐I: TARGET SCORES
Building Vintage
Pre‐1978
1978‐1991
1992‐2010
Climate Zone 4 12 12 12
TABLE 150.0‐J: MEASURE MENU, CLIMATE ZONE 4
ID Measures Building Vintage
Pre‐
1978
1978‐
1991
1992‐
2010
E1 Lighting Measures Mandatory
E2 Water Heating Package 1 1 1
E3 Air Sealing 2 1 1
E4.A R-38 Attic Insulation 7 3 1
E4.B R-49 Attic Insulation 7 3 1
E5 Duct Sealing 6 4 1
E6.A New Ducts, R-6 Insulation + Duct Sealing 10 7 2
E6.B New Ducts, R-8 Insulation + Duct Sealing 11 8 3
E7 Windows 6 5 3
E8 R-15 Wall Insulation 6 -- --
E10.A R-19 Raised floor insulation 8 8 --
E10.B R-30 Raised floor insulation 9 9 --
E11 Radiant Barrier Under Roof (when re-roofing) 3 2 1
FS1 Heat Pump Water Heater Replacing Gas 12 12 12
FS2 High Eff. Heat Pump Water Heater Replacing Gas 13 13 13
FS3 Heat Pump Water Heater Replacing Electric 4 4 4
FS4 High Eff. Heat Pump Water Heater Replacing Electric 5 5 5
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TABLE 150.0‐K: MEASURE SPECIFICATIONS
ID Measure Specification
Energy Efficiency Measures
E1 Lighting Measures – Install lighting with an efficiency of 45 lumens per watt or greater in all interior and
exterior screw-in fixtures. Install photocell, occupancy sensor or energy management system controls
that meet the requirements of 150.0(k)3 in all outdoor lighting permanently mounted to a residential
building or to other buildings on the same lot.
E2 Water Heating Package: Insulate all accessible hot water pipes with pipe insulation a minimum of ¾
inch thick. This includes insulating the supply pipe leaving the water heater, piping to faucets
underneath sinks, and accessible pipes in attic spaces or crawlspaces. Upgrade fittings in sinks and
showers to meet current California Green Building Standards Code (Title 24, Part 11) Section 4.303
water efficiency requirements.
Exception: Upgraded fixtures are not required if existing fixtures have rated or measured flow rates of
no more than ten percent greater than 2025 California Green Building Standards Code (Title 24, Part
11) Section 4.303 water efficiency requirements.
E3 Air Sealing: Seal all accessible cracks, holes, and gaps in the building envelope at walls, floors, and
ceilings. Pay special attention to penetrations including plumbing, electrical, and mechanical vents,
recessed can light luminaires, and windows. Weather-strip doors if not already present. Verification
shall be conducted following a prescriptive checklist that outlines which building aspects need to be
addressed by the permit applicant and verified by an inspector. Compliance can also be demonstrated
with blower door testing conducted by a certified ECC Rater no more than three years prior to the
permit application date that either: a) shows at least a 30 percent reduction from pre-retrofit
conditions; or b) shows that the number of air changes per hour at 50 Pascals pressure difference
(ACH50) does not exceed ten for Pre-1978 vintage buildings, seven for 1978 to 1991 vintage buildings
and five for 1992-2010 vintage buildings. If combustion appliances are located within the pressure
boundary of the building, conduct a combustion safety test by a certified ECC Rater or a professional
certified by the Building Performance Institute, in accordance with the BPI Technical Standards for the
Building Analyst Professional.
E4.A R-38 Attic Insulation: Attic insulation shall be installed to achieve a weighted assembly U-factor of 0.025
or insulation installed at the ceiling level shall have a thermal resistance of R-38 or greater for the
insulation alone. Recessed downlight luminaires in the ceiling shall be covered with insulation to the
same depth as the rest of the ceiling. Luminaires not rated for insulation contact must be replaced or
fitted with a fire-proof cover that allows for insulation to be installed directly over the cover.
FS5 Heat Pump Space Conditioning System 21 16 13
FS6 High Eff. Heat Pump Space Conditioning System 23 18 15
FS7 Dual Fuel Heat Pump Space Conditioning System 15 11 10
FS8 Heat Pump Clothes Dryer 1 1 1
FS9 Induction Cooktop 1 1 1
PV Solar PV 17 17 15
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Exception: In buildings where existing R-30 is present and existing recessed downlight luminaires are
not rated for insulation contact, insulation is not required to be installed over the luminaires.
E4.B R-49 Attic Insulation: Attic insulation shall be installed to achieve a weighted assembly U-factor of 0.020
or insulation installed at the ceiling level shall have a thermal resistance of R-49 or greater for the
insulation alone. Recessed downlight luminaires in the ceiling shall be covered with insulation to the
same depth as the rest of the ceiling. Luminaires not rated for insulation contact must be replaced or
fitted with a fire-proof cover that allows for insulation to be installed directly over the cover. Exception:
In buildings where existing R-30 is present and existing recessed downlight luminaires are not rated for
insulation contact, insulation is not required to be installed over the luminaires.
E5 Duct Sealing: Air seal all space conditioning ductwork to meet the requirements of the 2025 Title 24,
Part 6, Section 150.2(b)1E. The duct system must be tested by a ECC Rater no more than three years
prior to the Covered Single Family Project permit application date to verify the duct sealing and confirm
that the requirements have been met. This measure may not be combined with the New Ducts and
Duct Sealing measure in this Table.
Exception: Buildings without ductwork or where the ducts are in conditioned space.
E6.A New Ducts, R-6 insulation + Duct Sealing: Replace existing space conditioning ductwork with new R-6
ducts that meet the requirements of 2025 Title 24 Section 150.0(m)11. This measure may not be
combined with the Duct Sealing measure in this Table. To qualify, a preexisting measure must have
been installed no more than three years before the Covered Single Family Project permit application
date.
E6.B New Ducts, R-8 insulation + Duct Sealing: Replace existing space conditioning ductwork with new R-8
ducts that meet the requirements of 2025 Title 24 Section 150.0(m)11. This measure may not be
combined with the Duct Sealing measure in this Table. To qualify, a preexisting measure must have
been installed no more than three years before the Covered Single Family Project permit application
date.
E7 Windows: Replace at least 50% of existing windows with high performance windows with an area-
weighted average U-factor no greater than 0.27 in Climate Zones 4.
E8 R-15 Wall Insulation: Install wall insulation in all exterior walls to achieve a weighted U-factor of 0.095
or install wall insulation in all exterior wall cavities that shall result in an installed thermal resistance of
R-15 or greater for the insulation alone.
E9 Reserved for future use
E10.
A
R-19 Floor Insulation: Raised-floors shall be insulated such that the floor assembly has an assembly U-
factor equal to or less than U-0.037 or shall be insulated between wood framing with insulation having
an R-value equal to or greater than R-19.
E10.
B
R-30 Floor Insulation: Raised-floors shall be insulated such that the floor assembly has an assembly U-
factor equal to or less than U-0.028 or shall be insulated between wood framing with insulation having
an R-value equal to or greater than R-30.
E11 Radiant Barrier: A radiant barrier that meets the requirements of Section 150.1(c)2 shall be installed
under at least 50% of the roof surface.
Fuel Substitution and Solar PV Measures
FS1 Heat Pump Water Heater (HPWH) Replacing Gas: Replace existing natural gas water heater with a heat
pump water heater that meets the requirements of Sections 110.3 and 150.2(b)1.H.iii.b.
*NOT YET APPROVED*
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FS2 High Efficiency Heat Pump Water Heater (HPWH) Replacing Gas: Replace existing natural gas water
heater with heat pump water heater with a Northwest Energy Efficiency Alliance (NEEA) Tier 3 or higher
rating that also meets the requirements of Sections 110.3 and 150.2(b)1.H.iii.c.
FS3 Heat Pump Water Heater (HPWH) Replacing Electric: Replace existing electric resistance water heater
with a heat pump water heater that meets the requirements of Sections 110.3 and 150.2(b)1.H.iii.b.
FS4 High Efficiency Heat Pump Water Heater (HPWH) Replacing Electric: Replace existing electric resistance
water heater with heat pump water heater with a Northwest Energy Efficiency Alliance (NEEA) Tier 3 or
higher rating that also meets the requirements of Sections 110.3, and 150.2(b)1.H.iii.c.
FS5 Heat Pump Space Conditioning System: Replace all existing gas and electric resistance primary space
heating systems with a heat pump system that meets the requirements of Sections 110.3, 150.2(b)1.C,
150.2(b)1.E, 150.2(b)1.F, and 150.2(b)1.G.
FS6 High Efficiency Heat Pump Space Conditioning System: Replace all existing gas and electric resistance
primary space heating systems with an electric-only heat pump system that meets the requirements of
Sections 110.3 and 150.2(b)1.C, 150.2(b)1.E, 150.2(b)1.F, and 150.2(b)1.G and one of the following:
A. A ducted heat pump system with a SEER2 rating of 16.5 or greater, an EER2 rating of 12.48 or
greater and an HSPF2 rating of 9.5 or greater; or
B. A ductless mini-split heat pump system with a SEER2 rating of 14.3 or greater, an EER2 rating of
11.7 or greater and an HSPF2 rating of 7.5 or greater
FS7 Dual Fuel Heat Pump Space Conditioning System: Install a heat pump space conditioning system that
meets the requirements of Sections 110.3 and 150.2(b)1.C, 150.2(b)1.E, 150.2(b)1.F, and 150.2(b)1.G
and either:
A. Replaces all existing gas and electric resistance primary heating systems with a hybrid gas and
electric heat pump system, or
B. Is an electric-heat pump system in tandem with a gas furnace and controls to use the gas furnace
for backup heat only.
FS8 Heat Pump Clothes Dryer: Replace existing electric resistance or gas clothes dryer with heat pump dryer
with no resistance element and cap gas line.
FS9 Induction Cooktop: Replace all existing gas and electric resistance stove tops with inductive stove top
and cap the gas line.
PV.A Solar PV: Install a solar PV system that meets the requirements of Section 150.1(c)14.
A new Subsection, (x), is added to Section 150.0 as follows:
(x) Electric Readiness for Alterations
1. Electric range. Where branch circuits or receptacles are added or
altered in a kitchen and the work requires a building permit, install
electrical components in accordance with the California Electrical
Code. The electrical components shall include either of the
following:
A. A 125 volt, 20 amp electrical receptacle that is connected to
the electric panel with a 120/240 volt 3 conductor branch
circuit rated at 50 amps minimum, within 3 feet from the
appliance and accessible to the appliance with no
obstructions. Both ends of the unused conductor shall be
*NOT YET APPROVED*
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labeled with the word “spare” and be electrically isolated.
Space shall be reserved for a single pole circuit breaker in the
electrical panel adjacent to the circuit breaker for the branch
circuit and labeled with the words “Future Use”.
B. A pathway for a future 240 volt 50 amp minimum branch
circuit that shall consist of either conductors or raceway from
the main electrical service panel. The main electric panel shall
have space reserved to allow for the installation of a double
pole circuit breaker for a future electric range installation. The
reserved space shall be permanently marked as “For Future
240V use”. The raceway or conductors shall terminate at a
junction box within 3 feet of the appliance. The blank cover
shall be identified as “240V ready”.
2. Electric dryer. Where a branch circuit is added or altered within 3
feet of a gas or propane clothes dryer and the work requires a
building permit, install electrical components in accordance with
the California Electrical Code. The electrical components shall
include either of the following:
A. A dedicated 125 volt, 20 amp electrical receptacle that is
connected to the electric panel with a 120/240 volt 3
conductor branch circuit rated at 30 amps minimum, within 3
feet from the appliance and accessible to the appliance with
no obstructions. Both ends of the unused conductor shall be
labeled with the word “spare” and be electrically isolated.
Space shall be reserved for a single pole circuit breaker in the
electrical panel adjacent to the circuit breaker for the branch
circuit and labeled with the words “Future Use”; or,
B. A pathway for a future 240 volt 30 amp minimum branch
circuit that shall consist of either conductors or raceway from
the main electrical service panel. The main electric panel shall
have space reserved to allow for the installation of a double
pole circuit breaker for a future heat pump dryer installation.
The reserved space shall be permanently marked as “For
Future 240V use”. The raceway or conductors shall terminate
at a junction box within 3 feet of the appliance. The blank
cover shall be identified as “240V ready”.
3. Heat pump water heater.
A. If wall framing is removed or replaced within 3 feet of a gas or
propane water heating appliance, space suitable for the future
installation of a heat pump water heater (HPWH) shall be
provided. The space shall be at least 2.5 feet by 2.5 feet wide
and 7 feet tall and shall include a condensate drain that is no
more than 2 inches higher than the base of an installed water
heater and allows natural draining without pump assistance or
installed piping or tubing within 3 feet of the water heater
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location to a condensate drain or exterior location. If pump
assistance is needed, a receptacle on a 120 volt, minimum 15
amp branch circuit for a condensate pump must be available
within 3 feet of the water heater location.
B. Where branch circuits are altered or added within 3 feet of an
existing gas or propane water heater or within 10 feet of the
designated future location of a heat pump water heater as
required under Section 150.0(x)3A, and the work requires a
building permit, install electrical components in accordance
with the California Electrical Code. The electrical components
shall include either of the following:
i. A dedicated 125 volt, 20 amp electrical receptacle that is
connected to the electric panel with a 120/240 volt 3
conductor, 10 AWG copper branch circuit rated at 30 amps
minimum, within 3 feet from the water heater and
accessible to the water heater with no obstructions. Both
ends of the unused conductor shall be labeled with the
word “spare” and be electrically isolated. Space shall be
reserved for a single pole circuit breaker space in the
electrical panel adjacent to the circuit breaker for the
branch circuit and labeled with the words “Future 240V
Use”; or
ii. A pathway for a future 240 volt 30 amp minimum branch
circuit that shall consist of either conductors or raceway
from the main electrical service panel. The main electric
panel shall have space reserved to allow for the
installation of a double pole circuit breaker for a future
HPWH installation. The reserved space shall be
permanently marked as “For Future 240V use”. The
pathway shall terminate at a junction box within 3 feet of
the appliance. The blank cover shall be identified as “240V
ready”.
Exception 1 to Section 150.0(x): The project is the result of a
repair as defined by Title 24 Part 2 Section 202.
Exception 2 to Section 150.0(x): If a building permit, is not
otherwise required for the project other than compliance with
this section.
Exception 4 to Section 150.0(x): The project is the result of a
safety improvement to remove a known hazard.
Exception 5 to Section 150.0(x): Mobile Homes, Manufactured
Housing, or Factory-built Housing as defined in Division 13 of the
*NOT YET APPROVED*
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California Health and Safety 12 Code (commencing with Section
17000 of the Health and Safety Code).
Exception 6 to Section 150.0(x): Emergency Housing pursuant to
Appendix P of the California Building Code.
Exception 7 to Section 150.0(x): Creation of a new accessory
dwelling unit or junior accessory dwelling unit that is within the
existing space of a single family dwelling or accessory structure
and includes an expansion of not more than 150 square feet
beyond the same physical dimensions as the existing accessory
structure. An expansion beyond the physical dimensions of the
existing accessory structure shall be limited to accommodating
ingress and egress. Or, if the project would not otherwise be a
Covered Single Family Project were it not for the inclusion of an
accessory dwelling unit or junior accessory dwelling unit that
meets the criteria above.
16.17.130 Reserved
16.17.140 SUBCHAPTER 9 SINGLE‐FAMILY RESIDENTIAL BUILDINGS—ADDITIONS
AND ALTERATIONS TO EXISTING RESIDENTIAL BUILDINGS
The requirements of PAMC 16.17.140 shall apply to building permit applications
submitted to the City on or after January 1, 2027 and shall apply to all building permit
applications submitted to the City on or after that date.
Section 150.2 – ENERGY EFFICIENCY STANDARDS FOR ADDITIONS AND ALTERATIONS
TO EXISTING SINGLE-FAMILY RESIDENTIAL BUILDINGS – of Subchapter 9 of the 2025
California Energy Code is adopted without amendment, except as follows (additions
underlined, deletions struck through):
Section 150.2(b)1C is hereby amended to read:
C. En rely new or complete replacement space‐condi oning systems installed
as part of an altera on, shall include all the system hea ng or cooling
equipment, including but not limited to: condensing unit cooling or hea ng
coil, and air handler for split systems; or complete replacement of a packaged
unit; plus en rely new or replacement duct system (Sec on 150.2(b)1Diia).
En rely new or complete replacement space-condi oning systems shall meet
the requirements of Sec ons 150.0(h), 150.0(i), 150.0(j)1, 150.0(j)2,
150.0(m)1 through 150.0(m)10; 150.0(m)12; 150.0(m)13, 150.1(c)7,
150.2(b)1Fii, 150.2(b)1G, and TABLE 150.2-A. Addi onally, where an en rely
new or complete replacement space condi oning system includes a new or
replacement air-cooled air condi oner in Climate Zones 1 through 14 and 16,
*NOT YET APPROVED*
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it shall meet the applicable requirements of Sec on 150.2(b)1Fiv. Where an
en rely new or complete replacement space condi oning system includes a
new or replacement heat pump, it shall meet the applicable requirements of
Sec on 150.2(b)1Fv.
Section 150.2(b)1.F. is hereby amended to read:
F. Altered space‐conditioning system ‐ mechanical cooling. Alterations which
install new or replacement air-cooled air conditioners shall meet the
applicable requirements of subsections i and iv. Alterations which install new
or replacement heat pumps shall meet the applicable requirements of
subsections i, ii, iii, and v. All other alterations to refrigerant containing
components such as the compressor, condensing coil, evaporator coil,
refrigerant metering device, or refrigerant piping, shall meet the applicable
requirements of subsections i, ii, and iii. When a space-conditioning system is
an air conditioner or heat pump that is altered by the installation or
replacement of refrigerant-containing system components such as the
compressor, condensing coil, evaporator coil, refrigerant metering device or
refrigerant piping, the altered system shall comply with the following
requirements:
i. All thermostats associated with the system shall be replaced with
setback thermostats meeting the requirements of Section 110.2(c).
ii. Air-cooled air conditioners in Climate Zones 2 and 8 through 15 and air-
source heat pumps in all climate zones, including but not limited to
ducted split systems, ducted package systems, small duct high velocity
air systems, and minisplit systems, shall comply with Subsections a and
b, unless the system is of a type that cannot be verified using the
specified procedures. Systems that cannot comply with the
requirements of 150.2(b)1Fii shall comply with Section 150.2(b)1Fiii.
Exception to Section 150.2(b)1Fii: Entirely new or complete
replacement packaged systems for which the manufacturer has
verified correct system refrigerant charge prior to shipment from the
factory are not required to have refrigerant charge confirmed through
field verification and diagnostic testing. The installer of these packaged
systems shall certify on the Certificate of Installation that the packaged
system was pre-charged at the factory and has not been altered in a
way that would affect the charge. Ducted systems shall comply with
minimum system airflow rate requirement in Section 150.2(b)1Fiia,
provided that the system is of a type that can be verified using the
procedure specified in RA3.3 or an approved alternative in RA1.
a. Minimum system airflow rate shall comply with the applicable
Subsection I or II below as confirmed through field verification and
diagnostic testing in accordance with the procedures specified in
Reference Residential Appendix Section RA3.3 or an approved
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alternative procedure as specified in Section RA1.
I. Small duct high velocity systems shall demonstrate a
minimum system airflow rate greater than or equal to 250
cfm per ton of nominal cooling capacity; or
II. All other air-cooled air conditioner or air-source heat
pump systems shall demonstrate a minimum system
airflow rate greater than or equal to 300 cfm per ton of
nominal cooling capacity; and
Exception 1 to Section 150.2(b)1Fiia: Systems unable to comply
with the minimum airflow rate requirement shall demonstrate
compliance using the procedures in Section RA3.3.3.1.5; and the
system's thermostat shall conform to the specifications in Section
110.12.
Exception 2 to Section 150.2(b)1Fiia: Entirely new or complete
replacement space conditioning systems, as specified by Section
150.2(b)1C, without zoning dampers may comply with the
minimum airflow rate by meeting the applicable requirements in
Tables-150.0-B or 150.0-C as confirmed by field verification and
diagnostic testing in accordance with the procedures in Reference
Residential Appendix Section RA3.1.4.4 and RA3.1.4.5. The design
clean-filter pressure drop requirements of Section 150.0(m)12C
for the system air filter device(s) shall conform to the
requirements given in Tables150.0-B and 150.0-C.
b. The installer shall charge the system according to
manufacturer’s specifications. Refrigerant charge shall be verified
according to one of the following options, as applicable.
I. The installer and rater shall perform the standard charge
verification procedure as specified in Reference Residential
Appendix Section RA3.2.2, or an approved alternative
procedure as specified in Section RA1; or
II. The installer shall perform the weigh-in charging procedure as
specified by Reference Residential Appendix Section RA3.2.3.1
provided the system is of a type that can be verified using the
RA3.2.2 standard charge verification procedure and RA3.3
airflow rate verification procedure or approved alternatives in
RA1. The ECC-Rater shall verify the charge using RA3.2.2 and
RA3.3 or approved alternatives in RA1.
Exception 1 to Section 150.2(b)1Fiib: When the outdoor
temperature is less than 55° F and the installer utilizes the weigh-
in charging procedure in Reference Residential Appendix Section
RA3.2.3.1to demonstrate compliance, the installer may elect to
utilize the verification procedure in Reference Residential
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Appendix Section RA3.2.3.2. If the verification procedure in
Section RA3.2.3.2 is used for compliance, the system's thermostat
shall conform to the specifications in Section 110.12. Ducted
systems shall comply with the minimum system airflow rate
requirements in Section 150.2(b)1Fiia.
iii. Air-cooled air conditioners in Climate Zones 2 and 8 through 15 and
air-source heat pumps in all climate zones, including but not limited
to ducted split systems, ducted package systems, small duct high
velocity, and minisplit systems, which are of a type that cannot
comply with the requirements of 150.2(b)1Fiib shall comply with
subsections a and b, as applicable.
a. The installer shall confirm the refrigerant charge using the weigh-
in charging procedure specified in Reference Residential Appendix
Section RA3.2.3.1, as verified by an ECC-Rater according to the
procedures specified in Reference Residential Appendix RA3.2.3.2;
and
b. Systems that utilize forced air ducts shall comply with the
minimum system airflow rate requirement in Section
150.2(b)1Fiia provided the system is of a type that can be verified
using the procedures in Section RA3.3 or an approved alternative
procedure in Section RA1.
Exception to Section 150.2(b)1Fiii: Entirely new or complete
replacement packaged systems for which the manufacturer has
verified correct system refrigerant charge prior to shipment from
the factory are not required to have refrigerant charge confirmed
through field verification and diagnostic testing. The installer of
these packaged systems shall certify on the Certificate of
Installation that the packaged system was pre-charged at the
factory and has not been altered in a way that would affect the
charge. Ducted systems shall comply with minimum system
airflow rate requirement in Section 150.2(b)1Fiiib, provided that
the system is of a type that can be verified using the procedure
specified in Section RA3.3 or an approved alternative in Section
RA1.
iv. New or replacement air-cooled air conditioners in Climate Zones 1
through 14 and 16 shall meet the requirements of Section
150.2(b)1Fiva or 150.2(b)1Fivb.
a. Systems with existing duct distribution systems shall meet the
following requirements:
I. In all climate zones, meet the airflow and fan efficacy
requirements of Section 150.0(m)13B, 150.0(m)13C, or
150.0(m)13D.
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Exception 1 to Section 150.2(b)1FivaI: Single zone central
forced air systems and zonally controlled central forced air
systems may demonstrate compliance with an airflow greater
than or equal to 300 CFM per ton of nominal cooling capacity.
II. In all climate zones, meet the refrigerant charge verification
requirements of Section 150.2(b)1Fii; and
III. In all climate zones, vented attics shall have insulation
installed to achieve a U-factor of 0.020 or insulation installed
at the ceiling level shall result in an insulated thermal
resistance of R-49 or greater for the insulation alone;
luminaires not rated for insulation contact must be replaced
or retrofitted with a fireproof cover that allows for insulation
to be installed directly over the cover; and
Exception 1 to Section 150.2(b)1FivaIII: Dwelling units with at
least R-38 existing insulation installed at the ceiling level.
Exception 2 to Section 150.2(b)1FivaIII: Dwelling units where
the alteration would directly cause the disturbance of
asbestos unless the alteration is made in conjunction with
asbestos abatement.
Exception 3 to Section 150.2(b)1FivaIII: Dwelling units with
knob and tube wiring located in the vented attic.
Exception 4 to Section 150.2(b)1FivaIII: Where the accessible
space in the attic is not large enough to accommodate the
required R-value, the entire accessible space shall be filled
with insulation provided such installation does not violate
Section 806.3 of Title 24, Part 2.5.
Exception 5 to Section 150.2(b)1FivaIII: Where the attic space
above the altered dwelling unit is shared with other dwelling
units and the requirements of Section 150.2(b)1FivaIII are not
triggered for the other dwelling units.
IV. In all climate zones, air seal all accessible areas of the ceiling
plane between the attic and the conditioned space in
accordance with Section 110.7.
Exception 1 to Section 150.2(b)1FivaIV: Dwelling units with at
least R-38 existing insulation installed at the ceiling level.
Exception 2 to Section 150.2(b)1FivaIV: Dwelling units where
the alteration would directly cause the disturbance of
asbestos unless the alteration is made in conjunction with
asbestos abatement.
Exception 3 to Section 150.2(b)1FivaIV: Dwelling units with
atmospherically vented space heating or water heating
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combustion appliances located inside the pressure boundary
of the dwelling unit.
b. Systems with entirely new or complete replacement duct systems
shall meet the following:
I. R-8 duct insulation shall be installed for all new ducts located
in unconditioned space; and
II. In all climate zones, meet the airflow requirements of Section
150.0(m)13B, 150.0(m)13C, or 150.0(m)13D and demonstrate
an air-handling unit fan efficacy of less than or equal to 0.35
W/CFM.
III. In all climate zones, meet the refrigerant charge verification
requirements of Section 150.2(b)1Fii;
Exception 1 to Section 150.2(b)1Fiv: Where the capacity of the
existing main electrical service panel is insufficient to supply the
electrical capacity of a heat pump and where the existing main
electrical service panel is sufficient to supply a new or replacement air
conditioner, as calculated according to the requirements of California
Electrical Code Article 220.83 or Article 220.87, systems shall comply
with the applicable requirements of Sections 150.2(b)1Fi,
150.2(b)1Fii, and 150.2(b)1Fiii. Documentation of electrical load
calculations in accordance with Article 220 must be submitted to the
enforcement agency prior to permitting for both the heat pump and
proposed air conditioner.
Exception 2 to Section 150.2(b)1Fiv: Where the required capacity of a
heat pump to meet the system selection requirements of Section
150.0(h)5 is greater than or equal to 12,000 Btu/h more than the
greater of the required capacity of an air conditioner to meet the
design cooling load OR the capacity of the existing air conditioner,
systems shall comply with the applicable requirements of Sections
150.2(b)1Fi, 150.2(b)1Fii, and 150.2(b)1Fiii. Documentation of heating
and cooling load calculations in accordance with 150.0(h) must be
submitted to the enforcement agency prior to permitting for both the
heat pump and proposed air conditioner.
v. In all climate zones, heat pumps with supplementary heat, including,
but not limited to, electric resistance heaters or gas furnace
supplementary heating, shall comply with Section 150.0(h)7 and shall
lock out supplementary heating above an outdoor air temperature of
no greater than 35°F.
Section 150.2(b)2 is hereby amended to read:
2. Performance approach.
The energy budget for alterations is expressed in terms of Long-term
System Cost (LSC), and the altered component(s) and any newly installed
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equipment serving the alteration shall meet the applicable requirements
of Subsections A, B, and C below.
A. The altered components shall meet the applicable requirements of
Sections 110.0 through 110.9, Sections 150.0(a) through (l), Sections
150.0(m)1 through 150.0 (m)10, and Sections 150.0(p) through (q).
Entirely new or complete replacement mechanical ventilation
systems as these terms are used in Section 150.2(b)1L, shall comply
with the requirements in Section 150.2(b)1L. Altered mechanical
ventilation systems shall comply with the requirements of Section
150.2(b)1M. Entirely new or complete replacement space-
conditioning systems, and entirely new or complete replacement duct
systems, as these terms are used in Sections 150.2(b)1C and
150.2(b)1Diia, shall comply with the requirements of Sections
150.0(m)12 and 150.0(m)13. New or replacement air-cooled air
conditioners in Climate Zones 1 through 14 and 16 shall meet the
applicable requirements of Section 150.2(b)1Fiv.
B. The standard design for an altered component shall be the higher
efficiency of existing conditions or the requirements stated in Table
150.2-G. For components not being altered, the standard design shall
be based on the existing conditions. When the third party verification
option is specified as a requirement, all components proposed for
alteration for which the additional credit is taken, must be verified by
a certified ECC-rater.
Table 150.2-G is hereby amended to read:
Table 150.2‐G Standard Design for an Altered Component
Altered
Component
Standard Design Without Third Party
Verification of Existing Conditions Shall
be Based On
Standard Design With Third Party
Verification of Existing
Conditions Shall be Based On
Ceiling
Insulation,
Wall
Insulation,
and Raised-
floor
Insulation
The requirements of Sections 150.0(a),
(c), and (d).
The requirements of Section 150.2(b)1J
for altered ceilings and for entirely new or
complete replacement duct systems
where the air handler and ducts are
located within a vented attic.
The requirements of Section 150.2(b)1Fiv
for alterations which include new or
replacement air-cooled air conditioners.
The existing insulation R-value
Fenestration The requirements of Section 150.1(c)3A. The existing fenestration U-factor
*NOT YET APPROVED*
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0290179_20250826_ms29
and
SHGC values as verified.
Window Film The requirements of Section 150.1(c)3A. The existing fenestration in the
alteration shall be based on
TABLE 110.6-A and TABLE 110.6-
B.
Doors The U-factor of 0.20. The door area shall
be the door area of the existing building.
If the proposed U-factor is < 0.20,
the standard design shall be
based on the existing U-factor
value as verified. Otherwise, the
standard design shall be based on
the U-factor of 0.20. The door
area shall be the door area of the
existing building.
Space-
Heating and
Space-
Cooling
Equipment
Table 150.1-A for equipment efficiency
requirements;
Section 150.2(b)1C for entirely new or
complete replacement systems;
Section 150.2(b)1F for refrigerant charge
verification, airflow, and fan efficacy
requirements.
Section 150.2(b)1Fiv for new or
replacement air-cooled air conditioners
The existing efficiency levels.
Air
Distribution
System –
Duct Sealing
The requirements of Sections 150.2(b)1D
and 150.2(b)1E
The requirements of Sections
150.2(b)1D and 150.2(b)1E
Air
Distribution
System –
Duct
Insulation
The proposed efficiency levels.
The requirements of Sections 150.2(b)1D,
and for new or replacement air-cooled air
conditioners, Section 150.2(b)1Fiv.
The existing efficiency levels.
Water
Heating
Systems
The requirements of Section 150.2(b)1Hii The existing efficiency level.
Roofing
Products
The requirements of Section 150.2(b)1I. The requirements of Section
150.2(b)1I
*NOT YET APPROVED*
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0290179_20250826_ms29
C. The proposed design shall be based on the actual values of the altered
components.
16.17.150 Reserved
16.17.160 Reserved
16.17.170 Infeasibility Exemption.
(a) Exemption. If an applicant for a Covered Project believes that
circumstances exist that makes it infeasible to meet the requirements of
this Chapter, the applicant may request an exemption as set forth below.
In applying for an exemption, the burden is on the Applicant to show
infeasibility.
(b) Application. If an applicant for a Covered Project believes such
circumstances exist, the applicant may apply for an exemption at the time
of application submittal in accordance with the Planning and
Development Services administrative guidelines. The applicant shall
indicate the maximum threshold of compliance the energy compliance
design professional believes is feasible for the covered project and the
circumstances that make it infeasible to fully comply with this Chapter.
Circumstances that constitute infeasibility include, but are not limited to
the following:
(1) There is conflict with the compatibility of the currently adopted
California Building Standards Code;
(2) There is a lack of commercially available materials and
technologies to comply with the requirements of this Chapter;
(3) Applying the requirements of this Chapter would effectuate an
unconstitutional taking of property or otherwise have an
unconstitutional application to the property.
(c) Granting of Exemption. If the Director of Planning and Development
Services, or designee, determines that it is infeasible for the applicant to
fully meet the requirements of this Chapter based on the information
provided, the Director, or designee, shall determine the maximum feasible
threshold of compliance reasonably achievable for the project. The
decision of the Director, or designee, shall be provided to the applicant in
writing. If an exemption is granted, the applicant shall be required to
comply with this Chapter in all other respects and shall be required to
All Other
Measures
The proposed efficiency levels. The existing efficiency levels.
*NOT YET APPROVED*
25
0290179_20250826_ms29
achieve, in accordance with this Chapter, the threshold of compliance
determined to be achievable by the Director or designee.
(d) Denial of Exemption. If the Director of Planning and Development
Services or designee determines that it is reasonably possible for the
applicant to fully meet the requirements of this Chapter, the request shall
be denied, and the Director or designee shall so notify the applicant in
writing. The project and compliance documentation shall be modified to
comply with this Chapter prior to further review of any pending planning
or building application.
(e) Council Review of Exemption. For any covered project that requires
review and action by the City Council, the Council shall act to grant or deny
the exemption, based on the criteria outlined above, after
recommendation by the Director of Planning and Development Services.
16.17.180 Appeal.
(a) Any aggrieved Applicant may appeal the determination of the Director
of Planning and Development Services or designee regarding the
granting or denial of an exemption pursuant to 16.17.170.
(b) Any appeal must be filed in writing with the Planning and
Development Services Department not later than fourteen (14) days after
the date of the determination by the Director. The appeal shall state the
alleged error or reason for the appeal.
(c) The appeal shall be processed and considered by the City Council in
accordance with the provisions of Section 18.77.070 (f) of the City of Palo
Alto Municipal Code.
SECTION 3. The Council adopts the findings for local amendments to the California
Energy Code, 2025 Edition, attached hereto as Exhibit “A” and incorporated herein by reference.
SECTION 4. Under the authority granted by Public Resources Code Section
25402.1(h)(2), which permits local California Energy Code amendments, and based on staff’s
analysis of the “2022 Cost-Effectiveness Study: Existing Single Family Building Upgrades ,” “2025
Cost-Effectiveness Study: Single Family AC to Heat Pump Replacement,” and “Application of the
2022 Studies to the 2025 Energy Code: Existing Single Family Building Upgrades” developed for
the California Energy Codes and Standards Program and attached to staff’s report to Council, the
Council finds that the proposed local amendments to the 2025 California Energy Code that affect
building energy performance are cost-effective and will require buildings to be designed to
consume less energy than permitted by Title 24, Part 6.
SECTION 5. If any section, subsection, clause or phrase of this Ordinance is for any
reason held to be invalid, such decision shall not affect the validity of the remaining portion or
sections of the Ordinance. The Council hereby declares that it should have adopted the Ordinance
*NOT YET APPROVED*
26
0290179_20250826_ms29
and each section, subsection, sentence, clause or phrase thereof irrespective of the fact that any
one or more sections, subsections, sentences, clauses or phrases be declared invalid.
SECTION 6. The Council finds that this ordinance is exempt from the provisions of the
California Environmental Quality Act (“CEQA”), under Section 15308 of the CEQA Guidelines,
because it is a regulatory action for the protection of the environment, and under Section
15061(b)(3) on the grounds that the proposed standards are more stringent than the State
energy standards, there are no reasonably foreseeable adverse environmental impacts and there
is no possibility that the activity in question may have a significant effect on the environment.
//
//
//
//
//
//
//
//
//
//
//
//
//
//
//
//
//
*NOT YET APPROVED*
27
0290179_20250826_ms29
SECTION 7. Pursuant to Palo Alto Municipal Code Section 2.04.270, this ordinance
shall be effective immediately upon adoption if passed by a vote of four-fifths of the council
members present. Unless otherwise specified in this ordinance, its provisions shall become
applicable 180 days after publication of the 2025 Edition of California Energy Code, Title 24, Part
6. Until that date, the provisions of the 2022 Edition of the California Energy Code, as adopted
and amended by Ordinance 5627, shall apply and remain in effect.
INTRODUCED:
PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
____________________________ ____________________________
City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
____________________________ ____________________________
City Attorney or Designee City Manager
____________________________
Director of Planning and
Development Services
____________________________
Director of Administrative Services
*NOT YET APPROVED*
28
0290179_20250826_ms29
Exhibit A
FINDINGS FOR LOCAL AMENDMENTS TO CALIFORNIA ENERGY CODE, 2025 EDITION
TITLE 24, PART 6
Section 17958 of the California Health and Safety Code provides that the City may make changes
to the provisions of the California Building Standards Code. Sections 17958.5 and 17958.7 of the
Health and Safety Code require that for each proposed local change to those provisions of the
California Building Standards Code which regulate buildings used for human habitation, the City
Council must make findings supporting its determination that each such local change is reasonably
necessary because of local climatic, geological, or topographical conditions.
Regarding the Energy Code, local jurisdictions have the authority to adopt local energy
efficiency ordinances—or reach codes—that exceed the minimum standards defined by Title 24
(as established by Public Resources Code Section 25402.1(h)2 and Section 10-106 of the
Building Energy Efficiency Standards), provided the City Council finds that the requirements of
the proposed ordinance are cost-effective and do not result in buildings consuming more
energy than is permitted by Title 24.
Local building regulations having the effect of amending the uniform codes, which were adopted
by the City prior to November 23, 1970, were unaffected by the regulations of Sections 17958,
17958.5 and 17958.7 of the Health and Safety Code. Therefore, amendments to the uniform
codes which were adopted by the City Council prior to November 23, 1970 and have been carried
through from year to year without significant change, need no required findings. Also,
amendments to provisions not regulating buildings used for human habitation do not require
findings.
Code: California Energy Code, Title 24, Part 6
Chapter(s),
Sections(s),
Appendices
Title Add Deleted Amended Justification
(See below of keys)
100.0 Scope C & E
100.1(b) Definitions C & E
150.0 Mandatory Features and Devices C & E
150.2(b) Energy Efficiency Standards for Additions
and Alterations to Existing Single-Family
Residential Buildings - Alterations
C & E
Table 150.2-
G
Standard Design for an Altered Component C & E
*NOT YET APPROVED*
29
0290179_20250826_ms29
Key to Justification for Amendments to Title 24 of the California Code of Regulations
A This is an administrative amendment to clarify and establish civil and administrative
procedures, regulations, or rules to enforce and administer the activities by the Palo Alto
Building Inspection Department. These administrative amendments do not need to meet
HSC 18941.5/17958/13869 per HSC 18909(c).
C This amendment is justified on the basis of a local climatic condition. The seasonal climatic
conditions during the late summer and fall create severe fire hazards to the public health
and welfare in the City. The hot, dry weather frequently results in wild land fires on the
brush covered slopes west of Interstate 280. The aforementioned conditions combined
with the geological characteristics of the hills within the City create hazardous conditions
for which departure from California Energy Code is required. Failure to address and
significantly reduce greenhouse gas (GHG) emissions could result in rises in sea level,
including in San Francisco Bay, that could put at risk Palo Alto homes and businesses,
public facilities, and Highway 101 (Bayshore Freeway), particularly the mapped Flood
Hazard areas of the City. Energy efficiency is a key component in reducing GHG emissions,
and the construction of more energy efficient buildings can help Palo Alto reduce its share
of the GHG emissions that contribute to climate change. The burning of fossil fuels used
in the generation of electric power and heating of buildings contributes to climate change,
which could result in rises in sea level, including in San Francisco Bay, that could put at
risk Palo Alto homes and businesses 1 public facilities, and Highway 101. Due to a decrease
in annual rainfall, Palo Alto experiences the effect of drought and water saving more than
some other communities in California.
E Energy efficiency enhances the public health and welfare by promoting the
environmental and economic health of the City through the design, construction,
maintenance, operation, and deconstruction of buildings and sites by incorporating green
practices into all development. The provisions in this Chapter are designed to achieve the
following goals:
(a) Increase energy efficiency in buildings;
(b) Increase resource conservation;
(c) Provide durable buildings that are efficient and economical to own and operate;
(d) Promote the health and productivity of residents, workers, and visitors to the city;
(e) Recognize and conserve the energy embodied in existing buildings; and
(f) Reduce disturbance of natural ecosystems.
G This amendment is justified on the basis of a local geological condition. The City of Palo Alto
is subject to earthquake hazards caused by its proximity to San Andreas fault. This fault
runs from Hollister, through the Santa Cruz Mountains, epicenter of the 1989 Loma Prieta
earthquake, then on up the San Francisco Peninsula, then offshore at Daly City near Mussel
Rock. This is the approximate location of the epicenter of the 1906 San Francisco
Infeasibility Exemption A
Appeal A
*NOT YET APPROVED*
30
0290179_20250826_ms29
earthquake. The other fault is the Hayward Fault. This fault is about 74 mi long, situated
mainly along the western base of the hills on the east side of San Francisco Bay. Both of
these faults are considered major Northern California earthquake faults which may
experience rupture at any time. Thus, because the City is within a seismic area that
includes these earthquake faults, the modifications and changes cited herein are designed
to better limit property damage as a result of seismic activity and to establish criteria for
repair of damaged properties following a local emergency.
T The City of Palo Alto topography includes hillsides with narrow and winding access, which
makes timely response by fire suppression vehicles difficult. Palo Alto is contiguous with
the San Francisco Bay, resulting in a natural receptor for storm and waste water run-off.
Also the City of Palo Alto is located in an area that is potentially susceptible to liquefaction
during a major earthquake. The surface condition consists mostly of stiff to dense sandy
clay, which is highly plastic and expansive in nature. The aforementioned conditions
within the City create hazardous conditions for which departure from California Building
Standards Codes is warranted.
From:Luke Morton/FGA
To:Council, City
Subject:9/8/2025 Agenda item Adoption of an Emergency Ordinance Amending Palo Alto Municipal Code (PAMC)
Date:Monday, September 8, 2025 11:20:14 AM
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Some notes on the agenda item with respect to the water heating requirements. There wereconceans expressed by the public about circumstances where Heat Pump Water Heaters could
and couldn't be reasonably integrated into an existing home.
I work locally in Palo Alto as an energy and green building analyst for Fergus Garber
Architects and Heather Young Architects-- I have many years of experience on projects inPalo Alto and surrounding areas.
The proposed ordinance and presentations support local implementation and support forBAAQMD rules that would require zero--NOx emissions on new water heating equipment.
Such equipment, per the testing procedure and protocol, would effectively have to be electricpowered equipment as no atmospherically combusted equipment would be able to satisfy the
testing. So, it's a back-handed way of requiring electric equipment. This would include bothheat pump as well as electric resistance tanked and tankless water heaters-- all of those should
meet the air quality rules.
However, many homeowners experience significant challenges when trying to permit a gas-to-
electric water heater conversion when the electric water heater is NOT a heat pump waterheater and are looking to the city to reconcile these challenges with the stated goals.
That is-- "You say you're promoting and even requiring electrification, so why can't I get apermit for my electrification project?!!!"
And this is due to the Energy Code-- Title 24 part 6, which does not prescriptively allow forfuel substitution in that specific manner. The Energy Code is concerned with energy
efficiency and conservation and not with carbon emissions (at least not explicitly) and the'prescriptive' changeout requires a heat pump water heater which is ~3 times more efficient.
A few points that you may inquire of staff, but I thought I would weigh in on as a practicingenergy consultant as I may have more first hand knowledge:
The Energy Code does not, nor cannot prohibit electric resistance water heating. Suchproducts are generally allowed in non-residential buildings, but for residential dwelling
units, then they are not prescriptively allowed. The "Prescriptive" pathway is one oftwo compliance pathways in the energy code, the other being the 'Performance' pathway
which is used by most new and renovated homes. The Prescriptive pathway is a kind of'fixed recipe' for compliance with the code. If you meet all the criteria of the
Prescriptive pathway, then you comply. However if you don't like ALL the criteria,then you would use the Performance pathway. The Performance pathway allows for
specific modeling of the energy use of the whole building and for tradeoff in efficienciesamong heating and cooling and DHW (domestic hot water) loads. The Performance
pathway compares the 'proposed design' home to a 'standard design' home with all theprescriptive elements. A compliant project uses less energy than the 'standard design'
home when run in an annual simulation using the State's compliance software (calledCBECC-Res, though there are commercial products such as EnergyPro that are also
approved for compliance) As mentioned before, when an electric resistance water heater is modeled in the
Proposed Design, it is compared to a heat pump water heater in the Standard Design,and thereby incurs a significant penalty. Since the Energy Code has improved the
efficiency so much in the rest of the building, water heating can be the majority ofremaining energy consumption, and as such, the penalty for the electric tank is quite
significant. Example: I have some homes that are small (not much in the way of heatingand cooling) where water heating is 80-90% of the homes energy budget.
It is almost always possible to get an electric resistance water heating system tocomply. The easiest measure to greatly improve that system's efficiency is to install a
solar hot water system (note solar PV is not generally accepted as a compliance variablehere for reasons I won't get into-- ONLY approved solar hot water collectors will help in
getting compliance for electric water heaters). Some homeowners find solar hot watersystems expensive and not palatable, especially in comparison to the cost of the water
heater alone. Example--a typical electric resistance unit will cost $1k installed (order ofmagnitude) while an additional solar hot water system can cost roughly 10x that. It may
still be quite cost-effective given lifetime costs, but the first costs andcost differences feel punitive. A heat pump water heater typically costs $4-$8k
installed. The City cannot alter the State code to make it more lenient on electric resistance water
heating.
I will now speak for a minute as to why homeowners are looking towards electric tank andtankless systems instead of heat pumps for their electrification projects. These are projects
where integrating a heat pump water heater is difficult and/or expensive due to project specificconstraints. A heat pump water heater is quiet, but it's not silent. It also extracts heat out of
the surrounding air (or ducted air supply) so it should also be put into a place where thatventilation air can be provided and where noise and coolth coming off of it won't be a comfort
issue. Many of these projects are retrofits where the existing water heating system is a gastankless (which had long been heralded as the best in class for efficiency until recently). Due
to a myriad technical and code challenges, a drop-in replacement of a heat pump water heateris NOT a trivial, nor inexpensive matter.
Nothing in the proposed ordinance exacerbates nor ameliorates these challenges as I see it.
If Palo Alto citizens comment that they are concerned about these challenges, then I believe
that there are many remedies that could be considered in furtherance of this proposedmunicipal code change, and without compromise to the intent of other municipal codes.
I hope this letter is helpful disinterested commentary in support of the Staff's presentationtoday. I can also comment and speak to the specifics of the AC-to-HP code as I was among
the proofreaders for it, but it did not appear that there was as much concern about thisproposal.
I plan to be logged on to the meeting remotely this evening, and in support of staff (in spirit atleast) as a member of the public.
--Luke Morton
Fergus Garber Architects and Heather Young Architects
From:Matt Schlegel
To:Council, City
Subject:New Energy Reach codes
Date:Monday, September 8, 2025 10:48:09 AM
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i
Dear Council Members,
Please vote in favor of the new energy reach codes on Monday.
Thanks Matt
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From:Kat Snyder
To:Council, City
Subject:Public comment - item 19 reach codes
Date:Monday, September 8, 2025 9:17:13 AM
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i
Dear Council,
I support the staff proposal for the reach codes and am grateful that they've been able to getthem ready in time for the October 1st deadline. I ask that you move the staff proposal during
your meeting tonight.
It's frustrating that AB 130 has pitted housing against environmental issues when those twoneeds are not in conflict. In fact, in Lexington, Massachusetts, they've been able to ban gas in
homes and regulate energy efficiency, while at the same time increasing their affordablehousing pipeline.
I hope we can study their example as a way forward for ourselves.
Take care,
~Kat Snyder350 Palo Alto Steering Committee member
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From:Debbie Mytels
To:Council, City
Subject:Please pass the A/C and FlexPass for remodels building ordinances
Date:Sunday, September 7, 2025 10:40:53 PM
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on links.
Dear Council Members,
Thanks for your efforts to expand Palo Alto’s removal of methane gas from our community. Although passage of
AB 130 has placed a six-year State-wide moratorium on further reductions on methane use after October 1 of this
year, two items on the Council’s September 8 agenda are worthwhile efforts to keep Palo Alto moving forward on
the path to switching away from using methane in our homes.
In short, please support the requirement to replace gas-burning air conditioners with electric heat pump models (or
use rigorous energy-efficiency measures) when replacing or installating new A/C units.
Secondly, please approve the "FlexPath" approach for remodels that add over 1,000 feet to an existing residence.
While I believe it would be best if the Council would require such remodels to use only electric equipment for their
HVAC needs, the FlexPath approach can also result in significant energy efficiency and electrification upgrades.
Eliminating methane is the most effective thing we can do to reduce climate change, and it’s unfortunate that the CA
legislature has tied Palo Alto’s hands in pushing the "Reach Code" effort further at this time. I hope that the Council
will work with State legislators (and community advocates) in the year ahead to see if the restrictions upon local
cities in AB 130 can be removed.
Sincerely,
Debbie Mytels
2824 Louis Road, Palo Alto
From:susan chamberlain
To:Council, City
Subject:energy reach codes
Date:Sunday, September 7, 2025 8:47:44 PM
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on links.
Please support the proposed energy reach codes for Palo Alto. They are critical to meet our S/CAP goals.
Thank you.
Susan Chamberlain
From:Sue Luttner
To:Council, City
Subject:yes on environmental reach codes
Date:Sunday, September 7, 2025 4:02:27 PM
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i
Dear Council Members,Thank you for your ongoing support of residential environmental reach codes.
I hope you will keep up the good work and approve staff recommendations that will institutenew codes this week, before the October 1 deadline. Thank you.
Truly,Sue Luttner
-Sue Luttner
4035 Orme Street 94306
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From:Bruce Hodge
To:Council, City
Subject:New Energy Reach Codes (Support Staff proposal)
Date:Sunday, September 7, 2025 3:29:04 PM
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on links.
Honorable City Council Members,
Carbon Free Palo Alto supports the staff proposal for new energy reach codes and urge you to approve them.
We have one minor suggestion: Set the compliance start date for AC to Heat Pump to 1-Jan-2026 instead of 1-Jan-
2027. The staff proposal suggests that time is needed to put programs in place, but we believe that no program
support is needed. There is almost no difference in the cost or installation complexity and so we believe that a
support program is unneeded.
Thanks,
Bruce Hodge
Founder & Chair
Carbon Free Palo Alto
From:David Page
To:Council, City
Subject:pollution /reach codes
Date:Sunday, September 7, 2025 2:10:43 PM
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Dear City Council members,
We wrote to you last month about how Palo Altans produce excessive (per capita)
amounts of pollution (see letter further below). Now Carbon Free Palo Alto is
endorsing another way to reduce our toxic effluent - by reducing the burning of (CH4)
methane within City limits. Please support these meager efforts enthusiastically.
==========================================================
Staff proposal for reach codes:
Air Conditioner Time-of-Replacement Requirement – Requires specified
energy efficiency measures or installation of a heat pump system as the
primary heating source when replacing or installing an air conditioner.
Exceptions are provided for electrical panel limitations or oversized heating
needs.
FlexPath for Major Remodels – Requires additions or alterations over 1,000
square feet to incorporate a flexible package of efficiency or electrification
upgrades selected from an approved menu of measures, allowing for
customization based on project scope and building characteristics
Thank you again,Stephanie TroyanDavid PageMidtown
=====================================================================
Dear City Council members,
We've written to you about an anti-pollution public health campaign in the past (a
couple of times since 2020), but have gotten little response. Now a new paper from
Stanford (& other) researchers has confirmed the benefits of what I've been proposing:
"Climate literacy interventions can help individuals optimize their personal lifestyle choices in ways that
align with climate mitigation efforts."
Published by the National Academy of Sciences, the study suggests how greenhouse
pollution can be dramatically reduced simply by giving the public factual information -
which they otherwise are not receiving - from a credible source.
"The best way to combat the human tendency to miscalculate climate-related decisions is with more
readily available information."
Academics working for the U.N. have written about this:
"Targeted information (energy efficiency information, carbon labelling) can also shift consumer decision-
making towards more efficient and low-carbon products."
The City of Palo Alto has been talking about the moral urgency of pollution reduction
at least as far back as the Green Ribbon Task Force of 2006. Yet after the low-hanging
fruit was plucked, there's been little progress here.
Given the track record, and the relatively low priority of this issue for residents, I don't
expect much to change.
However, rather than continuing to spend money for meager results, perhaps you'll
consider an inexpensive proposal to complement what is already being tried: a public
health education campaign.
You already have 1/2 page inserts sent out with the utility bills. You could include an
insert (plus an op-ed for the Merc, as well as other media efforts) which would spell out
the biggest ways Palo Altans, on average, create GHG pollution: with airplane-trips,
beef-eating, oil'n'gasoline automobiles, and home methane/gas usage (see links, above).
Palo Altans, per capita, create well-above median levels of pollution.
Within the insert you could also spell out how such pollution is causing human
suffering today (local pollution), and will do in the future (extreme weather). No one
will want to bother changing their behavior unless they understand there's a
problem AND a way they can contribute to a solution.
Current Palo Alto marketing efforts go to great lengths to avoid mentioning the nature
of the problem, and its (avoidable) causes - a big messaging mistake, in my opinion ...
for example, saying the big reason to get an electric heat pump is to "save money"
rather than to save lives.
Please feel free to contact me if you'd like to discuss this proposal further.
Thank you very much,
David Page
Stephanie Troyan
Midtown
dalpage5@gmail.com
From:Lauren Segal
To:Council, City
Subject:Reach codes
Date:Sunday, September 7, 2025 5:04:25 AM
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!
Dear Council Member:
I am writing to urge you to pass new reach codes in this narrow window. The crazy weather
and fierce fires should be all the information you need to decide that climate change is real,devastating and in urgent need of addressing. We all must do our part.
Thank you,
Lauren Segal
833 Southampton Dr, Palo Alto, CA 94303
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From:Ariane Erickson
To:Council, City
Subject:I support energy reach codes
Date:Saturday, September 6, 2025 10:36:27 PM
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i
Dear Council,
Please approve the staff recommendations for energy reach codes at Monday night’s council
meeting. What our federal and state governments can’t and won’t do is now up to you.
Keep Palo Alto a leader in the fight against climate change.
Thank you,
Ariane Ericksonwww.norsegaelbooks.com
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Overview of Proposed Local Code Amendments for Immediate Adoption
September 8, 2025 Acting Now for a Resilient Future
George Hoyt, Chief Building Official
Tim Scott, Resource Planner
Building Standards Code Update Process
California updates its Building Standards Code every
three years.
•Current 2022 code update took effect January 1, 2023
•2025 code update will take effect January 1, 2026
Local jurisdictions may adopt local amendments to
the 2025 model code once the model code is published.
•Must be more restrictive/stringent than the state code
•Must make express findings that each amendment is reasonably necessary due to local geographic,
topographical, climatic or environmental conditions
2
Legislative Updates & Urgency
AB 130 (formerly AB 306) passed on June 30, 2025
Includes language that will limit the ability of jurisdictions to adopt new residential local
amendments to California Building Standards code
starting Oct 1, 2025 through 2031
Today: City Council to consider new residential
proposals for immediate adoption
October 6, 2025: City Council to consider new non-
residential proposals for adoption and prior local
amendments for readoption
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Proposed Local Building Code
Amendments to 2022 Code
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2022 Building Code Administrative Amendments
paloalto.gov/GreenBuildingCodeRequirements 5
•Certificate of Occupancy Requirements –
Clarifying when a certificate of occupancy is
required.
•Definitions – Clarifying applicability of
certain definitions, such as net floor area
and gross floor area.
Proposed Local Energy Code
Amendments to 2025 Code
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Background
paloalto.gov/GreenBuildingCodeRequirements
Reach codes consist of local amendments that go
beyond the requirements of state code
•Updated every 3 years
Energy code - addresses building energy use
•Local amendments must show cost-effectiveness
Green building code (CALGreen) - non-energy
environmental impact in areas of:
•Water Conservation
•Material Conservation
•Environmental Quality
•EV Infrastructure
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Green Building and Energy Amendment Timeline
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Adoption Date Local Code Amendments
Green Building Reach Code Energy Reach Code
September 2025
•None •Air Conditioner Time of
Replacement
•FlexPath
October 2025
•Carry forward previous local Green
Building Code amendments (including
CALGreen Tier 1 & 2 adoption)
•LEED Certification Alternative
Compliance Pathway
•Embodied Carbon Threshold
•EV Readiness
•Carry forward previous local
Energy Code amendments, as
supported by cost effectiveness
studies
Spring 2026
•None •Potential additional Energy Code
amendments as supported by
newly available cost
effectiveness studies and model
code language. e.g., Gas Water
Heater Time of Replacement
Proposal: Beginning 2027, require air conditioner replacement projects to either:
•implement additional energy efficiency measures (e.g. attic insulation, air sealing)
OR
•install a heat pump at time of replacement/upgrade of an AC unit
Objective: Energy efficiency and GHG reduction.
Exceptions: Insufficient electric panel capacity or if capacity of the heat pump would need to be one ton greater than AC unit to meet cooling load
Time of Replacement: AC to Heat Pump
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Picture
FlexPath
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Proposal: Remodel/renovation projects
over 1,000 sq. ft. must achieve 12 points installing energy-related measures from a
provided list of options.
Objective: Energy efficiency and emissions
reduction.
FlexPath Measure List
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Measures Building Vintage
Pre-1978 1978-1991 1992-2010
Water Heating Package 1 1 1
Air Sealing 2 1 1
R-38 Attic Insulation 7 3 1
R-49 Attic Insulation 7 3 1
Duct Sealing 6 4 1
New Ducts, R-6 Insulation + Duct Sealing 10 7 2
New Ducts, R-8 Insulation + Duct Sealing 11 8 3
Windows 6 5 3
Wall Insulation 6 ----
R-19 Raised floor insulation 8 8 --
R-30 Raised floor insulation 9 9 --
Radiant Barrier Under Roof (when re-roofing)3 2 1
Heat Pump Water Heater Replacing Gas 12 12 12
High Eff. Heat Pump Water Heater Replacing Gas 13 13 13
Heat Pump Water Heater Replacing Electric 4 4 4
High Eff. Heat Pump Water Heater Replacing Electric 5 5 5
Heat Pump Space Conditioning System 21 16 13
High Eff. Heat Pump Space Conditioning System 23 18 15
Dual Fuel Heat Pump Space Conditioning System 15 11 10
Heat Pump Clothes Dryer 1 1 1
Induction Cooktop 1 1 1
Solar PV 17 17 15
Measure
Point Values
Other Jurisdictions Adoption
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AC to Heat Pump:
•Menlo Park (2026)
•Sunnyvale (2026)
•Mountain View (2026)
•Glendale (2026)
•San Jose (2026)
FlexPath:
•Menlo Park
•Ojai
•Carlsbad
•Corte Madera
•Encinitas
•Fairfax
•Marin County
•Piedmont
•San Luis Obispo
•San Rafael
•San Anselmo
Existing Amendment
Community Feedback
paloalto.gov/GreenBuildingCodeRequirements
Staff hosted two community feedback sessions on August 12th and 13th
Feedback included:
•FlexPath – Suggestions to add new measures or adjust point values
•Water Heaters – Questions on aligning future time of replacement requirement with Air District Zero NOx standards
•Water Conservation – Suggestion for new elective measures to satisfy CALGreen requirements
•Other feedback that staff is considering for the future includes gas stove time of replacement, adopting passive housing standards, adjusting EV readiness requirements, and updating electric load calculations
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CASC Feedback
paloalto.gov/GreenBuildingCodeRequirements
•Discussed pushing AC to Heat Pump enforcement date
forward to 2026
•Determined that 2027 start date makes sense to learn from utility programs and other jurisdiction
implementation
•Discussed additional AC to Heat Pump exceptions
•Included additional information on current exceptions
•Included additional information on FlexPath measure list
•Voted 3 – 0 to recommend City Council adoption of the
proposed Energy Code amendments
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Staff Recommendation
paloalto.gov/GreenBuildingCodeRequirements
Staff recommends that the City Council:
1.Adopt, by a four-fifths majority, the emergency ordinance to incorporate administrative
amendments into Palo Alto Municipal Code
16.04, which implements the California Building
Code, and
2.Adopt, by a four-fifths majority, the emergency
ordinance amending PAMC Chapter 16.17 to incorporate the 2025 Edition of the California
Energy Code with local amendments related to
energy efficiency.
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Next Steps
paloalto.gov/GreenBuildingCodeRequirements
If the proposed amendments are adopted by the Council, next steps would be:
•Administrative amendments to Building Code would take effect immediately
•Staff would submit Energy Code amendments to the California Energy Commission (CEC) and the California Building Standards Commission (CBSC) for review
•Review process typically takes ~2 months
•If approved by the CBSC and CEC:
•Palo Alto’s FlexPath amendment would be effective starting Jan 1, 2026 (effective date of the 2025 state code)
•AC to Heat Pump time of replacement standards would become effective January 1, 2027
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George Hoyt
Chief Building Official
Planning & Development Services
George.Hoyt@paloalto.gov
Tim Scott
Resource Planner
Utilities
Timothy.Scott@paloalto.gov