The 2025 Energy Code: heat pumps, solar and the all-electric drift

The 2025 Energy Code (Title 24, Part 6) took effect January 1, 2026, and it moves the goalposts for multifamily: heat-pump space heating and water heating are the compliance baseline for most new construction. A gas design is still legal — it just starts in an efficiency hole it has to climb out of elsewhere in the building, which in practice pushes most new projects all-electric at the drafting table.

Part 6 works alongside CALGreen's EV provisions and the Mechanical Code's ventilation requirements, and its real underwriting bite is electrical: heat pumps, EV charging and induction cooking stack onto service sizing at exactly the moment utility transformer lead times have stretched. Utility service standards like the PG&E Greenbook deserve a seat in schematic design, not a call at permit.

Two paths: prescriptive (meet every listed measure exactly) or performance (energy modeling against a standard-design budget, trading a weaker measure for a stronger one elsewhere). Virtually all multifamily uses the performance path for the design flexibility. Since the 2022 cycle the code has consolidated multifamily into its own dedicated provisions regardless of building height, so the old low-rise/high-rise split no longer decides which rules apply.

Underneath the headline measures sit the envelope and ventilation requirements — insulation and fenestration minimums, mechanical ventilation and indoor-air-quality provisions (including kitchen exhaust) — that quietly constrain window-wall ratios and unit layouts. They are rarely deal-breakers, but they belong in the test-fit, not the CD phase.

The 2025 edition sets heat-pump space and water heating as the standard design for most new construction: an all-electric building simply meets its budget, while a gas design is measured against the heat-pump baseline and must claw back the difference with a better envelope or better equipment. Layered on top, qualifying new multifamily carries solar PV plus battery-storage requirements carried forward from the 2022 cycle, sized under the code's standards and exceptions.

• Underwriting watch-outs:
• Model the compliance path before committing to gas anywhere — a single gas water-heating plant can drag the whole performance budget and force expensive offsets.
• PV and battery capex belongs in the base budget, not the value-engineering list: on qualifying buildings it is a code cost, partially offset by how the systems credit in the performance model.
• Roof area is a constraint again — PV arrays compete with heat-pump equipment, amenity decks and mechanical screens. Stack the roof plan early.
• Heat-pump water heating needs real space planning (central plants, storage tanks, ducted closets) — retrofit-style closets sized for gas equipment don't fit it.

Local governments may adopt reach codes that go beyond Part 6, but only if the amendments are cost-effective and filed through the state process. Outright natural-gas bans adopted under local police power were undercut when the Ninth Circuit held Berkeley's gas-piping prohibition preempted by federal energy law (California Restaurant Association v. City of Berkeley) — cities have since retreated to energy-code-based measures, so electrification now flows mostly through Part 6 baselines and reach codes rather than bans.

• Underwriting watch-outs:
• Check the jurisdiction's current reach code before concept design — an all-electric or above-baseline requirement changes systems selection on day one, and reach codes re-adopt each code cycle.
• Engage the utility at entitlement, not permit: service sizing, transformer capacity and switchgear lead times have run months to a year-plus, and the fix is early load letters and will-serve coordination — see utility fees and will-serve letters.
• All-electric operating pro formas live and die on time-of-use rate assumptions — model actual tariffs, not a flat cents-per-kWh figure.