How New California Energy Efficiency Standards Affect Your 2024 HVAC Installation Costs

California’s 2025 Energy Code Changes Are Already Impacting Your HVAC Installation Costs in 2024

California homeowners planning HVAC installations in 2024 are already feeling the effects of the state’s upcoming 2025 Building Energy Efficiency Standards, even though they don’t officially take effect until January 1, 2026. The adopted 2025 update will be submitted to the California Building Standards Commission (CBSC), which is scheduled to consider it in December 2024. If approved by the CBSC, the new standards would go into effect on January 1, 2026, giving builders, contractors and other interested parties a year to gear up for the changes.

What Are California’s New Energy Efficiency Standards?

The California Energy Commission adopted the 2025 updates to California’s Building Energy Efficiency Standards (Energy Code). The Code update is estimated to save $4.8 billion in energy costs, reduce greenhouse gas emissions by about 4 million metric tons, and make homes and buildings more climate-resilient and comfortable. These standards represent a significant shift toward electrification and heat pump technology.

The 2025 Energy Code expands the use of heat pumps in newly constructed residential buildings, encourages electric-readiness, strengthens ventilation standards, and more. For existing buildings, replacing end-of-life rooftop heating, ventilation, and air-conditioning (HVAC) units of a certain size with high efficiency systems including heat pumps, for existing retail, existing schools, and existing offices and libraries.

How These Standards Are Already Affecting 2024 Installation Costs

Even before the 2025 standards officially take effect, smart homeowners and contractors are already preparing for these changes, which is influencing current HVAC installation decisions and costs. The emphasis on heat pump technology means that many homeowners are choosing to install heat pump systems now rather than traditional gas furnaces, anticipating future compliance requirements.

According to Angi, the increased efficiency requirements can mean paying $350 to $1,500 more for a new air conditioner, heat pump, or packaged system. However, these higher upfront costs are offset by significant long-term savings. After all, heating and cooling account for 55% of the energy used in homes, based on numbers by the Office of Energy Efficiency and Renewable Energy.

Heat Pump Requirements and Cost Implications

The new standards place a strong emphasis on heat pump technology. The 2025 Standards focus on strengthening heat pump requirements for space and water heating with additional focus on envelope and pool heating. Extending the prescriptive standard for heat pumps for space heating to all climate zones means that heat pumps will become the preferred choice across California’s diverse climate zones.

For homeowners considering HVAC installation Sacramento County, CA, this shift toward heat pump technology represents both an opportunity and a challenge. While heat pumps typically cost more upfront than traditional systems, these units make homes more comfortable and can reduce electricity use by up to 75%, compared to electric resistance heating such as furnaces.

Available Rebates and Incentives

To help offset the higher costs associated with energy-efficient HVAC systems, California has launched several rebate programs. Rebates for multifamily building owners for a wider array of electric appliances became available on October 8, and rebates for single family homeowners became available on November 12, 2024. California homeowners with household incomes between 80% and 150% area median income (AMI) will be eligible for up to $4,000. Those with incomes less than 80% AMI will be eligible for up to $8,000.

These substantial rebates can significantly reduce the net cost of upgrading to a high-efficiency heat pump system, making the transition more affordable for California homeowners.

Compliance Requirements and Installation Standards

Title 24 sets rigorous energy efficiency standards for HVAC systems in California, tailored to the state’s distinct climate zones and promoting the use of electric heat pumps in residential buildings. HVAC code compliance includes proper duct sealing and insulation, accurate sizing of heating and cooling equipment, and adherence to safety measures, like fire-resistant ductwork and carbon monoxide detectors.

These compliance requirements mean that HVAC installations must meet stricter standards for ductwork, insulation, and system sizing. Professional installation by certified technicians becomes even more critical to ensure compliance with these enhanced standards.

Planning Your 2024 HVAC Installation

If you’re planning an HVAC installation in 2024, consider these factors:

The Bottom Line

California’s 2025 Energy Efficiency Standards are already influencing HVAC installation costs and decisions in 2024. While these changes may increase upfront costs, the combination of available rebates, long-term energy savings, and improved home comfort make investing in high-efficiency heat pump systems a smart choice for California homeowners.

The updates are expected to save $4.8 billion in energy costs, drive 500,000 heat pump installations in the first three years and slash greenhouse gas emissions by 4 million metric tons, CEC said in a news release. Much of that would be due to at least 500,000 new heat pumps to heat and cool homes, they estimated.

By planning ahead and working with experienced HVAC professionals who understand these evolving standards, homeowners can make informed decisions that provide both immediate comfort and long-term value while contributing to California’s clean energy goals.