Existing law requires the State Energy Resources Conservation and Development Commission to prescribe, by regulation, lighting, insulation, climate control system, and other building design and construction standards, and energy and water conservation design standards, for new residential and new nonresidential buildings to reduce the wasteful, uneconomic, inefficient, or unnecessary consumption of energy, as specified.

This bill would require the commission to evaluate the cost-effectiveness of passive house energy efficiency standards by California climate zone, using commission-adopted metrics such as long-term system cost. The bill would require the commission to evaluate the use of the 2 passive house energy models currently required for passive house certification in its analysis and the cost-effectiveness of passive house construction compared to existing construction, as specified. The bill would require the commission, on or before July 1, 2028, to submit a report to the Legislature documenting its findings and recommendations.

Existing law requires the State Energy Resources Conservation and Development Commission to prescribe, by regulation, lighting, insulation, climate control system, and other building design and construction standards, and energy and water conservation design standards, for new residential and new nonresidential buildings to reduce the wasteful, uneconomic, inefficient, or unnecessary consumption of energy, as specified.

This bill would require the commission to evaluate the cost-effectiveness of passive house energy efficiency standards by California climate zone, using commission-adopted metrics such as long-term system cost. The bill would require the commission to evaluate the use of the 2 passive house energy models currently required for passive house certification in its analysis and the cost-effectiveness of passive house construction compared to existing construction, as specified. The bill would require the commission, on or before July 1, 2028, to submit a report to the Legislature documenting its findings and recommendations.

Existing law requires the State Energy Resources Conservation and Development Commission to prescribe, by regulation, lighting, insulation, climate control system, and other building design and construction standards, and energy and water conservation design standards, for new residential and new nonresidential buildings to reduce the wasteful, uneconomic, inefficient, or unnecessary consumption of energy, as specified.

This bill would require the commission to evaluate the cost-effectiveness of passive house energy efficiency standards by California climate zone, using commission-adopted metrics such as long-term system cost. The bill would require the commission to evaluate the use of the 2 passive house energy models currently required for passive house certification in its analysis and the cost-effectiveness of passive house construction compared to existing construction, as specified. The bill would require the commission, on or before December 31, 2026, July 1, 2028, to submit a report to the Legislature documenting its findings and recommendations.

Existing law requires the State Energy Resources Conservation and Development Commission to prescribe, by regulation, lighting, insulation, climate control system, and other building design and construction standards, and energy and water conservation design standards, for new residential and new nonresidential buildings to reduce the wasteful, uneconomic, inefficient, or unnecessary consumption of energy, as specified.

This bill would require the commission to evaluate the cost-effectiveness of passive house energy efficiency standards by California climate zone, using commission-adopted metrics such as long-term system cost. The bill would require the commission to evaluate the use of the 2 passive house energy models currently required for passive house certification in its analysis and the cost-effectiveness of passive house construction compared to existing construction, as specified. The bill would require the commission, on or before December 31, 2026, to submit a report to the Legislature documenting its findings and recommendations.

Existing law requires the State Energy Resources Conservation and Development Commission to prescribe, by regulation, lighting, insulation, climate control system, and other building design and construction standards, and energy and water conservation design standards, for new residential and new nonresidential buildings to reduce the wasteful, uneconomic, inefficient, or unnecessary consumption of energy, as specified.

This bill would require the commission to evaluate the cost-effectiveness of passive house energy efficiency standards, and, if appropriate, adopt those standards, or any elements that align with the states existing requirements, as an alternative compliance pathway for the building efficiency standards established by the Energy Commission. standards by California climate zone, using commission-adopted metrics such as long-term system cost. The bill would require the commission to evaluate the use of the 2 passive house energy models currently required for passive house certification in its analysis and the cost-effectiveness of passive house construction compared to existing construction, as specified. The bill would require the commission, on or before December 31, 2026, to submit a report to the Legislature documenting its findings and recommendations.

Existing law requires the State Energy Resources Conservation and Development Commission to prescribe, by regulation, lighting, insulation, climate control system, and other building design and construction standards, and energy and water conservation design standards, for new residential and new nonresidential buildings to reduce the wasteful, uneconomic, inefficient, or unnecessary consumption of energy, as specified.

This bill would require the commission to evaluate the passive house energy efficiency standards, and, if appropriate, adopt those standards, or any elements that align with the states existing requirements, as an alternative compliance pathway for the building efficiency standards established by the Energy Commission.

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 368

Author:(Ward)

As Amended Ver:August 29, 2025

Majority vote

SUMMARY

Requires the California Energy Commission (CEC) to evaluate the cost-effectiveness of passive house building energy efficiency standards by climate zone and submit a report to the Legislature on its findings.

Senate Amendments

1. Requires the CEC to use the cost-effectiveness criteria in existing law to assess and compare passive house standards.
2. Extends the deadline for the CEC to submit its report on the cost-effectiveness of Passive House building energy efficiency standards from December 31, 2026 to July 1, 2028.
3. Extends the inoperative date for the reporting requirement from January 1, 2029 to January 1, 2032.

COMMENTS

What are Passive House Standards? Passive House standards are a set of rigorous design and construction practices aimed at achieving ultra-low energy use in buildings. While there is no single statutory definition, the Passive House Institute US (PHIUS) describes passive building as "a set of design principles used to attain a quantifiable and rigorous level of energy efficiency within a specific quantifiable comfort level."

Originally developed in Germany, Passive House standards emphasize features such as airtight construction, high-performance insulation, and highly efficient ventilation systems to minimize the need for active heating and cooling. Core design elements include:

1. Superinsulation: High levels of insulation in walls, roofs, and floors to minimize heat loss and reduce the need for active heating and cooling systems
2. Airtight Construction: To prevent heat loss
3. Heat Recovery Ventilation (HRV) or Energy Recovery Ventilation (ERV): To ensure constant supply of fresh air without significant heat loss hence maintaining indoor air quality while saving energy

Under current law, the CEC adopts building energy standards, commonly known as Title 24. These codes include both prescriptive requirements and performance-based compliance pathways. Although nothing prohibits a consumer from building or retrofitting to Passive House standards, demonstrating compliance with Title 24 may be unclear. Consumers seeking Passive House certification typically work with independent providers who verify whether a building design meets recognized Passive House standards.

According to the Author

According to the author, "AB 368 directs the California Energy Commission to evaluate and adopt certified Passive House (PH) standards as an alternative compliance pathway within Title 24, making it easier and more cost-effective to build high-performance, energy-efficient buildings. PH designs significantly reduce energy consumption and enhance resilience to climate change by utilizing airtight construction, superior insulation, and advanced ventilation systems. By streamlining certification and removing costly barriers, AB 368 will accelerate building decarbonization, improve indoor air quality, and support California's climate goals."

Arguments in Support

This bill is supported by a broad coalition of organizations—including housing advocates, climate and environmental groups, and certification bodies—who emphasize that the legislation will accelerate building decarbonization, improve indoor air quality, and advance California's climate goals.

Arguments in Opposition

None on file.

FISCAL COMMENTS

According to the Senate Committee on Appropriations, this bill would result in costs of up to $300,000 annually through July 1, 2028 for the CEC to evaluate the cost-effectiveness of Passive House building energy efficiency standards by climate zone and to submit its findings to the Legislature.

VOTES:

ASM UTILITIES AND ENERGY: 18-0-0

YES: Petrie-Norris, Patterson, Boerner, Calderon, Chen, Davies, Mark González, Harabedian, Hart, Irwin, Kalra, Papan, Rogers, Schiavo, Schultz, Ta, Wallis, Zbur

ASM NATURAL RESOURCES: 14-0-0

YES: Bryan, Alanis, Connolly, Ellis, Flora, Garcia, Haney, Hoover, Kalra, Muratsuchi, Pellerin, Schultz, Wicks, Zbur

ASM APPROPRIATIONS: 14-0-1

YES: Wicks, Arambula, Calderon, Caloza, Dixon, Elhawary, Fong, Mark González, Hart, Pacheco, Pellerin, Solache, Ta, Tangipa

ABS, ABST OR NV: Sanchez

ASSEMBLY FLOOR: 79-0-0

YES: Addis, Aguiar-Curry, Ahrens, Alanis, Alvarez, Arambula, Ávila Farías, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Caloza, Carrillo, Castillo, Chen, Connolly, Davies, DeMaio, Dixon, Elhawary, Ellis, Flora, Fong, Gabriel, Gallagher, Garcia, Gipson, Jeff Gonzalez, Mark González, Hadwick, Haney, Harabedian, Hart, Hoover, Irwin, Jackson, Kalra, Krell, Lackey, Lee, Lowenthal, Macedo, McKinnor, Muratsuchi, Nguyen, Ortega, Pacheco, Papan, Patel, Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Ransom, Celeste Rodriguez, Michelle Rodriguez, Rogers, Blanca Rubio, Sanchez, Schiavo, Schultz, Sharp-Collins, Solache, Soria, Stefani, Ta, Tangipa, Valencia, Wallis, Ward, Wicks, Wilson, Zbur, Rivas

UPDATED

VERSION: August 29, 2025

CONSULTANT: Lina V. Malova / U. & E. / (916) 319-2083 FN: 0001877

 THIRD READING  

Bill No: AB 368

Author: Ward (D), et al.

Amended: 8/29/25 in Senate

Vote: 21

SENATE ENERGY, U. & C. COMMITTEE: 16-0, 7/7/25

AYES: Becker, Ochoa Bogh, Allen, Archuleta, Arreguín, Ashby, Caballero, Gonzalez, Grove, Hurtado, Limón, McNerney, Rubio, Stern, Strickland, Wahab

NO VOTE RECORDED: Dahle

SENATE APPROPRIATIONS COMMITTEE: 7-0, 8/29/25

AYES: Caballero, Seyarto, Cabaldon, Dahle, Grayson, Richardson, Wahab

ASSEMBLY FLOOR: 79-0, 6/2/25 - See last page for vote

SUBJECT: Energy: building standards: passive house standards

SOURCE: Climate Action California

DIGEST:

This bill requires the California Energy Commission (CEC) to evaluate the cost-effectiveness of passive house building energy efficiency standards by climate zone and submit a report to the Legislature on its findings.

ANALYSIS:

Existing law:

1. Requires the CEC to adopt and update Building Energy Efficiency Standards (Energy Code) for most residential and non-residential buildings in the state of California every three years. (Public Resources Code §25402)
2. Requires the CEC to adopt the building energy efficiency standards that are cost-effective when taken in their entirety and when amortized over the economic life of the structure. The CEC shall also consider other relevant factors, as required by Sections 11346.5 and 11357 of the Government Code, including, but not limited to, the impact on housing costs, the total statewide costs and benefits of the standard over its lifetime, economic impact on California businesses, and alternative approaches and their associated costs. (Public Resources Code §25402(c))
3. Requires each utility to maintain records of the energy usage data of all buildings to which they provide service for at least the most recent 12 complete calendar months, and to deliver or otherwise provide that aggregated energy usage data for each covered building, as defined, to the owner, as specified. (Public Resources Code §25402.10)
4. Requires the CEC to assess the potential for the state to reduce greenhouse gas emissions from the state’s residential and commercial building stock by at least 40% below 1990 levels by January 1, 2030. (Public Resources Code §25403)
5. Requires the CEC to develop and implement a comprehensive program to achieve greater energy savings in California’s existing residential and nonresidential building stock. (Public Resources Code § 25943)

This bill:

1. Requires the CEC to evaluate the cost-effectiveness of passive house building energy efficiency standards by climate zone using metrics adopted by the CEC, such as long-term system cost.
2. Requires the CEC to evaluate the use of two models required for passive house certification when conducting its analysis of the cost-effectiveness of passive house construction when compared to existing residential energy code.
3. Requires the CEC to use the cost-effectiveness methodology required under existing law for building standards when assessing the cost-effectiveness of passive house construction models.
4. Requires the CEC to submit a report to the Legislature by July 1, 2028, on its findings and recommendations from the evaluation required by this bill.
5. Sunsets this bill’s reporting requirement on January 1, 2032.

Background

What is a passive house? While no comprehensive definition of a passive house exists, international associations specializing in passive houses generally describe these homes as residential buildings characterized by design standards intended to maximize the building’s efficiency by using the building’s location, envelope, and other measures that optimize comfort without increasing energy consumption. While most passive house standards do not explicitly restrict the use of natural gas appliances, passive houses tend to be all-electric. Passive house designs may incorporate advanced ventilation controls, automated systems limiting electricity appliance energy consumption, and distributed generation resources. In 2021, the California Public Utilities Commission (CPUC) commissioned a study on the potential grid benefits of passive house design. The study, published in 2025, noted that passive house design standards include measures to achieve the following:

• Continuous insulation,
• No thermal bridging (heat transference resulting from certain building practices),
• Airtight construction,
• High-performance windows and doors, and
• Mechanical ventilation with heat recovery.

Nothing stops homeowners from adopting passive house standards today, but compliance and certification pose barriers. Existing law provides the CEC with the authority to adopt energy code requirements for new buildings, also known as Title 24 regulations. Some energy code requirements are prescriptive and others provide flexible pathways for compliance. Nothing in existing law prevents a consumer from retrofitting or constructing a passive house; however, the pathway for demonstrating compliance with CEC energy codes may not be clear. If a consumer wishes to certify their home as a passive house, independent certification providers can verify that the home’s design meets certain passive house standards. In the U.S., Passive Houses are largely certified by two organizations, Passive House Institute and Passive House Institute US. Each of these organizations use different targets to certify a building. According to a list of certifiers provided by the Passive House Institute, only 1 of the 7 certifiers listed in the United States is located in California. While there may be other certifiers capable of certifying passive house designs, it is unclear how many certifiers are located in California or if certifiers are uniformly available throughout the state.

One size does not fit all: climate zones influence the extent to which some passive house standards are appropriate. Regional temperatures substantially impact benefits of certain passive house standards. Currently, passive house construction is most popular in European countries like Germany and Austria. International passive house standards set specific limits on the amount of energy consumed on a per-square-foot basis for heating and cooling a home. It is unclear whether all California climate zones could meet these limits given the variance in average temperatures throughout the state. In order to determine which passive house standards are most effective in California climate zones, the CEC may need to consider more than two passive house standards.

Increasingly, California energy codes have emphasized the role of demand response and distributed generation. While California has recently enacted a temporary freeze on the adoption of new changes to residential building code, recent building code updates have increasingly moved towards establishing new requirements that focus on facilitating demand response and distributed generation, including solar and storage systems. Passive house standards generally emphasize measures that reduce or limit energy consumption. Generally, passive house residents see lower energy bills from reduced energy consumption; however, homeowners that optimize energy storage and other load-shifting resources can also reduce their bills regardless of home design.

A report commissioned by the CPUC on potential grid benefits of passive house design noted that while passive house design can help limit over-sizing of distributed rooftop solar, California’s energy code already limits oversized rooftop solar. The report stated: “California code requirement for solar integration calls for much smaller solar PV systems than what is being installed on either ZNE homes or Passive Houses in practice and, thus, may not impact sizing.” Overall, the CPUC’s report indicates that passive house design may provide grid benefits by lowering residential load in a manner that limits the need for additional distribution investments. However, the report notes that the CEC’s existing solar requirements generally limit distributed solar backfeed more effectively than passive house standards.

Prior/Related Legislation

SB 282 (Weiner, 2025) requires the CEC to develop standardized permitting checklists, create requirements for local agencies, and cap permit fees for the installation of residential heat pump HVAC systems and heat pump water heaters. The bill was held in the Senate Appropriations Committee.

AB 738 (Tangipa) of 2025, provides a limited exemption to the CEC’s current solar building requirements until January 1, 2028, for homes damaged or destroyed in a disaster for which the Governor has declared an emergency, provided that certain conditions are met. The bill is currently pending before the full Senate.

AB 130 (Committee on Budget, Chapter 22, Statutes of 2025) enacts various changes to law for the 2025-26 Budget Act, including a temporary six-year freeze on the adoption and implementation of changes to residential building codes, lasting until June 1, 2031.

AB 2787 (Joe Patterson) of 2024, would have provided an exemption to the CEC’s solar building requirements until January 1, 2028, for homes damaged or destroyed in a disaster for which the Governor has declared an emergency. The bill was vetoed.

SB 795 (Stern) of 2023, would have required the CEC to establish online systems to track the sales of HVAC systems and track compliance documents for building energy efficiency standards. The bill was held in the Assembly Appropriations Committee.

SB 1164 (Stern) of 2022, was substantially similar to SB 795 and would have required the CEC to establish a compliance testing registry. The bill was held in the Assembly Appropriations Committee.

AB 1078 (Jim Patterson) of 2022, would have extended from January 1, 2023, to January 1, 2024, a prior exemption to CEC’s solar building requirements for residential buildings impacted by disasters for which the Governor issues an emergency declaration. The bill was vetoed.

AB 660 (Levine) of 2019, would have required the CEC to consider establishing additional cool roof requirements as part of building energy efficiency standards established over the next 12 years. The bill was amended into a different subject matter.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

According to the Senate Appropriations Committee, costs of up to $300,000 per year until the report due date of July 1, 2028 (Energy Resources Program Account) for the CEC to evaluate the cost-effectiveness of passive house building energy efficiency standards by climate zone and submit a report to the Legislature on its findings.

SUPPORT: (Verified 8/29/25)

Climate Action California (Source)
American Institute of Architects California
Green Policy Initiative
Passive House California
Passive House Network
StopWaste
US Green Building Council California

An Individual

OPPOSITION: (Verified 8/29/25)

None received

ARGUMENTS IN SUPPORT: According to the author:

AB 368 directs the California Energy Commission (CEC) to produce a one-time report, evaluating the use of Passive House (PH) energy models currently required for PH certification and the cost effectiveness of PH construction compared to existing Title 24 construction. PH designs significantly reduce energy consumption and enhance resilience to climate change by utilizing airtight construction, superior insulation, and advanced ventilation systems. By streamlining certification and removing costly barriers, AB 368 will accelerate building decarbonization, improve indoor air quality, and support California’s climate goals.

ASSEMBLY FLOOR: 79-0, 6/2/25

AYES: Addis, Aguiar-Curry, Ahrens, Alanis, Alvarez, Arambula, Ávila Farías, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Caloza, Carrillo, Castillo, Chen, Connolly, Davies, DeMaio, Dixon, Elhawary, Ellis, Flora, Fong, Gabriel, Gallagher, Garcia, Gipson, Jeff Gonzalez, Mark González, Hadwick, Haney, Harabedian, Hart, Hoover, Irwin, Jackson, Kalra, Krell, Lackey, Lee, Lowenthal, Macedo, McKinnor, Muratsuchi, Nguyen, Ortega, Pacheco, Papan, Patel, Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Ransom, Celeste Rodriguez, Michelle Rodriguez, Rogers, Blanca Rubio, Sanchez, Schiavo, Schultz, Sharp-Collins, Solache, Soria, Stefani, Ta, Tangipa, Valencia, Wallis, Ward, Wicks, Wilson, Zbur, Rivas

Prepared by: Sarah Smith / E., U. & C. / (916) 651-4107

9/2/25 17:56:24

**** END ****

SENATE COMMITTEE ON

Senator Anna Caballero, Chair

2025 - 2026 Regular Session

AB 368 (Ward) - Energy: building standards: passive house standards

Bill Summary:

This bill would require the California Energy Commission (CEC) to evaluate the cost-effectiveness of passive house building energy efficiency standards by climate zone and submit a report to the Legislature on its findings.

*********** ANALYSIS ADDENDUM – SUSPENSE FILE ***********

The following information is revised to reflect amendments

adopted by the committee on August 29, 2025

Fiscal Impact:

• Costs of up to $300,000 per year until the report due date of July 1, 2028 (Energy Resources Program Account) for the CEC to evaluate the cost-effectiveness of passive house building energy efficiency standards by climate zone and submit a report to the Legislature on its findings.

Committee Amendments:

These amendments would delay the report due date from December 31, 2026 to July 1, 2028 and delay the sunset from 2029 to 2032.

-- END --

SENATE COMMITTEE ON

Senator Anna Caballero, Chair

2025 - 2026 Regular Session

AB 368 (Ward) - Energy: building standards: passive house standards

Bill Summary:

This bill would require the California Energy Commission (CEC) to evaluate the cost-effectiveness of passive house building energy efficiency standards by climate zone and submit a report to the Legislature on its findings.

Fiscal Impact:

• The CEC estimates ongoing costs of $306,285 annually (Energy Resources Programs Account [ERPA]) until the January 1, 2029 sunset date for two positions to implement the provisions of this bill.

Background:

What is a passive house? While no comprehensive definition of a passive house exists, international associations specializing in passive houses generally describe these homes as residential buildings characterized by design standards intended to maximize the building’s efficiency by using the building’s location, envelope, and other measures that optimize comfort without increasing energy consumption. While most passive house standards do not explicitly restrict the use of natural gas appliances, passive houses tend to be all-electric. Passive house designs may incorporate advanced ventilation controls, automated systems limiting electricity appliance energy consumption, and distributed generation resources. In 2021, the CPUC commissioned a study on the potential grid benefits of passive house design. The study, published in 2025, noted that passive house design standards include measures to achieve the following:

• Continuous insulation,
• No thermal bridging (heat transference resulting from certain building practices),
• Airtight construction,
• High-performance windows and doors, and
• Mechanical ventilation with heat recovery.

Nothing stops homeowners from adopting passive house standards today, but compliance and certification pose barriers. Existing law provides the CEC with the authority to adopt energy code requirements for new buildings, also known as Title 24 regulations. Some energy code requirements are prescriptive and others provide flexible pathways for compliance. Nothing in existing law prevents a consumer from retrofitting or constructing a passive house; however, the pathway for demonstrating compliance with CEC energy codes may not be clear. If a consumer wishes to certify their home as a passive house, independent certification providers can verify that the home’s design meets certain passive house standards. In the U.S., Passive Houses are largely certified by two organizations, Passive House Institute and Passive House Institute US. Each of these organizations use different targets to certify a building. According to a list of certifiers provided by the Passive House Institute, only 1 of the 7 certifiers listed in the United States is located in California. While there may be other certifiers capable of certifying passive house designs, it is unclear how many certifiers are located in California or if certifiers are uniformly available throughout the state.

One size does not fit all: climate zones influence the extent to which some passive house standards are appropriate. Regional temperatures substantially impact benefits of certain passive house standards. Currently, passive house construction is most popular in European countries like Germany and Austria. International passive house standards set specific limits on the amount of energy consumed on a per-square-foot basis for heating and cooling a home. It is unclear whether all California climate zones could meet these limits given the variance in average temperatures throughout the state. In order to determine which passive house standards are most effective in California climate zones, the CEC may need to consider more than two passive house standards.

Increasingly, California energy codes have emphasized the role of demand response and distributed generation. Passive house standards generally emphasize measures that reduce or limit energy consumption. While energy efficiency standards remain an important tool in limiting the need for unnecessary generation, recent energy efficiency standards have increasingly emphasized distributed generation, storage, and electrification measures that increase electricity consumption. When coupled with demand response tools that help shift loads in response to grid conditions, increased electrical loads can increase renewable energy consumption and reduce reliance on fossil fuel generation. However, if these loads are not aligned to grid conditions, increased consumption can further strain resources at peak demand periods. Generally, passive house residents see lower energy bills from reduced energy consumption; however, homeowners that optimize energy storage and other load-shifting resources can also reduce their bills regardless of home design.

A report commissioned by the CPUC on potential grid benefits of passive house design noted that while passive house design can help limit over-sizing of distributed rooftop solar, California’s energy code already limits oversized rooftop solar. The report stated: “California code requirement for solar integration calls for much smaller solar PV systems than what is being installed on either ZNE homes or Passive Houses in practice and, thus, may not impact sizing.” Overall, the CPUC’s report indicates that passive house design may provide grid benefits by lowering residential load in a manner that limits the need for additional distribution investments. However, the report notes that the CEC’s existing solar requirements generally limit distributed solar backfeed more effectively than passive house standards.

Proposed Law:

This bill would:

1. Require the CEC to evaluate the cost-effectiveness of passive house building energy efficiency standards by climate zone using metrics adopted by the CEC, such as long-term system cost.
2. Require the CEC to evaluate the use of two models required for passive house certification when conducting its analysis of the cost-effectiveness of passive house construction when compared to existing residential energy code.
3. Provide that the evaluation of the cost-effectiveness of passive house construction conducted by the commission pursuant to this section shall comply with the requirements of paragraph (3) of subdivision (b) of Section 25402.
4. Require the CEC to submit a report to the Legislature by December 31, 2026, on its findings and recommendations from the evaluation required by this bill.
5. Sunset this bill’s reporting requirement on January 1, 2029.

Related Legislation:

SB 282 (Weiner) of 2025, would require the CEC to develop standardized permitting checklists, create requirements for local agencies, and cap permit fees for the installation of residential heat pump HVAC systems and heat pump water heaters. The bill was held in the Senate Appropriations Committee.

AB 738 (Tangipa) of 2025, would provide a limited exemption to the CEC’s current PV building requirements until January 1, 2028, for homes damaged or destroyed in a disaster for which the Governor has declared an emergency, provided that certain conditions are met.

AB 2787 (Joe Patterson) of 2024, would have provided an exemption to the CEC’s PV building requirements until January 1, 2028, for homes damaged or destroyed in a disaster for which the Governor has declared an emergency. The bill was vetoed.

SB 795 (Stern) of 2023, would have required the CEC to establish online systems to track the sales of HVAC systems and track compliance documents for building energy efficiency standards. The bill was held in the Assembly Appropriations Committee.

SB 1164 (Stern) of 2022, was substantially similar to SB 795 and would have required the CEC to establish a compliance testing registry. The bill was held in the Assembly Appropriations Committee.

AB 1078 (Jim Patterson) of 2022, would have extended from January 1, 2023, to January 1, 2024, a prior exemption to CEC’s PV building requirements for residential buildings impacted by disasters for which the Governor issues an emergency declaration. The bill was vetoed.

AB 660 (Levine) of 2019, would have required the CEC to consider establishing additional cool roof requirements as part of building energy efficiency standards established over the next 12 years. The bill was amended into a different subject matter.

AB 178 (Dahle, Chapter 259, Statutes of 2019) exempted, until January 1, 2023, any residential construction intended to “repair, restore, or replace” a residential building that was damaged or destroyed as a result of a disaster in an area in which the Governor has declared a state of emergency, before January 1, 2020, from the state’s recently adopted requirements for solar photovoltaic systems, if certain requirements are met.

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:AB 368

Author:(Ward)

As Amended Ver:April 7, 2025

Majority vote

SUMMARY

Requires the California Energy Commission (CEC) to evaluate the cost-effectiveness of passive house energy efficiency standards by California climate zone as compared to existing construction under existing energy efficiency building standards (known as "Building Energy Efficiency Standards" or "Title 24 standards") and to report its evaluation to the Legislature by December 31, 2026.

Major Provisions

COMMENTS

State law charges the CEC with adopting building energy efficiency standards, which become part of the state building code. The CEC's standards require certain cost-effective building features that result in a building achieving a certain level of energy efficiency, which the CEC calls a building's "energy budget." The CEC refers to these features as the "prescriptive baseline." However, a builder may deviate from the CEC's prescriptive baseline if it includes other features in the building that, according to CEC-approved calculations, result in comparable energy efficiency as would the prescriptive baseline.

Currently, there is no universally standardized definition of passive house standards. However, the Passive House Institute US (PHIUS)—a research organization that has contributed significantly to the development of the Passive House concept—defines passive building as "a set of design principles used to achieve a quantifiable and rigorous level of energy efficiency within a specific, measurable comfort level.

The key elements of Passive House include:

1. Superinsulation—high levels of insulation in walls, roofs, and floors to minimize heat loss reducing the need for active heating and cooling systems.
2. Airtight Construction—ensuring the building envelope is extremely airtight to prevent heat loss
3. High-Performance Windows & Doors—typically, triple-pane windows are used to maximize solar heat gain in winter while minimizing overheating in summer.
4. Thermal Bridge-free Design—avoiding materials and design features that allow heat to bypass insulation thus enhancing overall energy efficiency.
5. Heat Recovery Ventilation or Energy Recovery Ventilation—ensuring a constant supply of fresh air without significant heat loss hence maintaining indoor air quality while saving energy.

The CEC asserts an evaluation of passive house design would help the state identify under what technical circumstances passive house standards can also meet the state's Title 24 requirements. However, the CEC notes that it would be able to include outcomes of the study the next time it undertakes a Title 24 rulemaking if the bill required the CEC to report to the Legislature by June 30, 2027, instead of December 1, 2026.

According to the Author

"AB 368 directs the California Energy Commission to evaluate and adopt certified Passive House (PH) standards as an alternative compliance pathway within Title 24, making it easier and more cost-effective to build high-performance, energy-efficient buildings. PH designs significantly reduce energy consumption and enhance resilience to climate change by utilizing airtight construction, superior insulation, and advanced ventilation systems. By streamlining certification and removing costly barriers, AB 368 will accelerate building decarbonization, improve indoor air quality, and support California's climate goals."

Arguments in Support

The bill is supported by a broad coalition of climate and environmental organizations, housing and urban policy advocates, technical and community groups. Supporters argue this legislation streamlines permitting to advance energy-efficient, climate-resilient construction. By encouraging the use of Passive House standards, the supporters contend that the legislation reduces heating and cooling energy use by over 50%—cutting costs for developers and lowering utility bills for tenants.

Arguments in Opposition

None on file.

FISCAL COMMENTS

According to the Assembly Committee on Appropriations, this measure assigns new analytical responsibilities to the CEC resulting in additional costs. The CEC estimates it will require two new full-time, ongoing positions—at an annual cost of approximately $306,000 from the Energy Resources Programs Account—to evaluate passive house standards and their applicability to California's Building Energy Efficiency Standards. However, it is unclear why ongoing staffing authority is necessary for what appears to be a one-time evaluation.

VOTES

ASM UTILITIES AND ENERGY: 18-0-0

YES: Petrie-Norris, Patterson, Boerner, Calderon, Chen, Davies, Mark González, Harabedian, Hart, Irwin, Kalra, Papan, Rogers, Schiavo, Schultz, Ta, Wallis, Zbur

ASM NATURAL RESOURCES: 14-0-0

YES: Bryan, Alanis, Connolly, Ellis, Flora, Garcia, Haney, Hoover, Kalra, Muratsuchi, Pellerin, Schultz, Wicks, Zbur

ASM APPROPRIATIONS: 14-0-1

YES: Wicks, Arambula, Calderon, Caloza, Dixon, Elhawary, Fong, Mark González, Hart, Pacheco, Pellerin, Solache, Ta, Tangipa

ABS, ABST OR NV: Sanchez

UPDATED

VERSION: April 7, 2025

CONSULTANT: Lina V. Malova / U. & E. / (916) 319-2083 FN: 0000682

Date of Hearing: May 7, 2025

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Buffy Wicks, Chair

ABPCA Bill Id:AB 368

Author:(Ward) – As Amended Ver:April 7, 2025

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill requires the California Energy Commission (CEC) to evaluate the cost-effectiveness of passive house energy efficiency standards by California climate zone as compared to existing construction under existing energy efficiency building standards (known as “Building Energy Efficiency Standards” or “Title 24 standards”) and to report its evaluation to the Legislature by December 31, 2026.

FISCAL EFFECT:

This bill creates new analytical work of the CEC and, therefore, creates costs for the CEC. The CEC estimates it will need two new fulltime positions, ongoing, at an annual cost of approximately $306,000 (Energy Resources Programs Account) to evaluate passive house standards and their applicability to California’s Building Energy Efficiency Standards. It is not clear why the CEC needs ongoing position authority for a one-time evaluation.

COMMENTS:

1. Purpose. The author intends this bill to lead the CEC to evaluate and adopt certified passive house standards as an alternative compliance pathway within the Building Energy Efficiency Standards regulations, “making it easier and more cost-effective to build high-performance, energy-efficient buildings.” According to the author, passive house designs “significantly reduce energy consumption and enhance resilience to climate change by utilizing airtight construction, superior insulation, and advanced ventilation systems” and asserts their use will “accelerate building decarbonization, improve indoor air quality, and support California’s climate goals.”
2. Background. State law charges the CEC with adopting building energy efficiency standards, which become part of the state building code. The CEC’s standards require certain cost-effective building features that result in a building achieving a certain level of energy efficiency, which the CEC calls a building’s “energy budget.” The CEC refers to these features as the “prescriptive baseline.” However, a builder may deviate from the CEC’s prescriptive baseline if it includes other features in the building that, according to CEC-approved calculations, result in comparable energy efficiency as would the prescriptive baseline.

This bill would have CEC evaluate the cost-effectiveness of passive house energy efficiency standards. The bill does not define what is meant by “passive house” standards. However, as noted above, the author describes passive house standards as utilizing airtight construction, superior insulation and advanced ventilation systems. The analysis of this bill by the Assembly Committee on Utilities and Energy cites the characteristics of a passive house provided by the Passive House Institute:

1. Superinsulation—high levels of insulation in walls, roofs, and floors to minimize heat loss reducing the need for active heating and cooling systems.
2. Airtight Construction—ensuring the building envelope is extremely airtight to prevent heat loss
3. High-Performance Windows & Doors—typically, triple-pane windows are used to maximize solar heat gain in winter while minimizing overheating in summer.
4. Thermal Bridge-free Design—avoiding materials and design features that allow heat to bypass insulation thus enhancing overall energy efficiency.
5. Heat Recovery Ventilation or Energy Recovery Ventilation—ensuring a constant supply of fresh air without significant heat loss hence maintaining indoor air quality while saving energy.

The CEC asserts an evaluation of passive house design would help the state identify under what technical circumstances passive house standards can also meet the state's Title 24 requirements. However, the CEC notes that it would be able to include outcomes of the study the next time it undertakes a Title 24 rulemaking if the bill required the CEC to report to the Legislature by June 30, 2027, instead of December 1, 2026. 

Analysis Prepared by: Jay Dickenson / APPR. / (916) 319-2081

Date of Hearing: April 21, 2025

ASSEMBLY COMMITTEE ON NATURAL RESOURCES

Isaac G. Bryan, Chair

ABPCA Bill Id:AB 368 (

Author:Ward) – As Introduced Ver:April 7, 2025

SUBJECT: Energy: building standards: passive house standards

SUMMARY: Requires the California Energy Commission (CEC) to evaluate the cost-effectiveness of passive house energy efficiency standards.

EXISTING LAW:

1. Require the Air Resources Board (ARB) to ensure that statewide greenhouse gas GHG emissions are reduced to 40% below the 1990 level by 2030. (Health and Safety Code (HSC) 38566)
2. Requires GHG emissions be reduced pursuant to AB 1279 (Muratsuchi), Chapter 337, Statutes of 2022, to at least 85% below the 1990 level by 2045, and establishes a goal of zero net carbon emissions by 2045, commonly known as carbon neutrality. (HSC 38500 et seq.)
   
3. Requires CEC to adopt and update Building Energy Efficiency Standards (Energy Code) for most residential and non-residential buildings in every three years. (Public Resources Code (PRC) 25402)
4. Requires that the standards adopted be cost-effective when taken in their entirety and when amortized over the economic life of the structure. Requires CEC to consider other relevant factors, including the impact on housing costs, the total statewide costs and benefits of the standard over its lifetime, economic impact on California businesses, and alternative approaches and their associated costs. (PRC 25402(c))
5. Requires CEC to assess the potential for the state to reduce GHG emissions from the state’s residential and commercial building stock by at least 40% below 1990 levels by January 1, 2030. (PRC 25403)
6. Requires CEC to develop and implement a comprehensive program to achieve greater energy savings in California’s existing residential and nonresidential building stock. (PRC 25943)
   

THIS BILL:

1. Requires CEC to evaluate the cost-effectiveness of passive house energy efficiency standard by California climate zone, using CEC-adopted metrics such as long-term system cost.
2. Requires CEC to evaluate the use of the two passive house energy models currently required for passive house certification in its analysis and the cost-effectiveness of passive house construction compared to existing construction, as specified.
   
3. On or before December 31, 2026, requires CEC to submit a report to the Legislature documenting its findings and recommendations. Sunsets the report requirements on January 1, 2029.

FISCAL EFFECT: Unknown

COMMENTS:

1. California Energy Code. The California Energy Code was first adopted in 1976 and is updated every three years by the CEC. The standards for residential and non-residential buildings (Title 24 of the California Code of Regulations) sets energy and water efficiency standards for newly constructed buildings and additions and alterations to existing buildings. Updates to the standards ensure that builders use the up-to-date energy-efficient technologies and construction, save energy, increase electricity supply reliability, increase indoor comfort, and help preserve the environment. Homes and businesses use nearly 70% of California’s electricity and are responsible for nearly 25% of the state’s GHG emissions. The standards vary by building type and climate zone, as outlined in Title 24.
   
   The California Energy Code includes an evaluation of cost-effectiveness based on the energy savings created by an efficiency standard over the life of the building. According to CEC, California’s efficiency standards for buildings and appliances have saved Californians more than $100 billion in avoided energy costs over the last 50 years.
   
2. Passive house standards. According to the Passive House Institute US, “a passive house is a building standard that is truly energy, efficient, comfortable, and affordable at the same time.” The Institute states that a passive houses allow for space heating and cooling related energy savings; make efficient use of the sun and internal heat sources and heat recovery; offer a high level of comfort; and, use ventilation systems that supply “constant fresh air without unpleasant draughts.” Originally developed in Germany, the key principles include:

• High levels of insulation minimize heat loss;
• Airtight building envelope to prevent heat loss;
• High-performance windows and doors, typically triple pane;
• Thermal bridge-free design that avoids materials and design features that allow heat to bypass insulation; and,
• Heat-recovery ventilation or energy recovery ventilation, which supply a constant supply of fresh air without significant heat loss.
  

In January of this year, the California Public Utilities Commission approved a report evaluating the potential impacts of passive house design on the electric grid. The study highlights possible impacts of passive house standards on residential new construction building load, including reduced annual load, reduced summer and winter peak loads, and more predictable and flexible electric load.

CEC’s "Single Family Passive House Prescriptive Pathway" was developed to assess whether homes certified under passive house standards could meet or exceed the prescriptive requirements of the 2022 California Energy Code, which sought to identify barriers to implementation and determine the enforceability of such standards within the state's regulatory framework. While recognizing the potential benefits of passive house principles, CEC identified several concerns regarding their integration:

• • Energy Modeling and Compliance Verification: Passive house design uses specific energy modeling tools that differ from the compliance software used for Title 24. This discrepancy raises challenges in verifying compliance and ensuring consistency between the two standards.
  • Climate Zone Adaptation: California encompasses 16 distinct climate zones, each with unique environmental conditions. Passive house standards, originally developed in Europe, may require adaptation to effectively address the diverse climatic conditions present across California.
  • Cost Implications: Implementing passive house standards may involve higher upfront construction costs due to the use of specialized materials and construction techniques. Evaluating the cost-effectiveness and financial impact on builders and homeowners is a concern for widespread adoption given California’s high housing and utility costs.
    

1. This bill. This bill requires CEC to evaluate the cost-effectiveness of passive house energy efficiency standards by California climate zone, using CEC-adopted metrics such as long-term system cost and requires it to report its findings to the Legislature on or before December 31, 2026.
2. Author’s statement:

AB 368 directs the California Energy Commission to evaluate and adopt certified Passive House (PH) standards as an alternative compliance pathway within Title 24, making it easier and more cost-effective to build high-performance, energy-efficient buildings. PH designs significantly reduce energy consumption and enhance resilience to climate change by utilizing airtight construction, superior insulation, and advanced ventilation systems. By streamlining certification and removing costly barriers, AB 368 will accelerate building decarbonization, improve indoor air quality, and support California’s climate goals.

1. Double referral. This bill was passed the Assembly Utilities and Energy Committee on April 2 with a vote of 18-0.

REGISTERED SUPPORT / OPPOSITION:

Support

350 Conejo/San Fernando Valley

350 Humboldt

350 Ventura County Climate Hub

475 High Performance Building Supply

Abundant Housing LA

Active San Gabriel Valley

Alpen High Performance Products, INC.

Altadena Energy and Solar

BAN SUP

Best Techs Contracting Design Build Remodel, INC.

Building Doctors INC.

California Environmental Voters

California Yimby

Carmel Building and Design

Casa Nova Studio

Clean Coaliton

Climate Action California

Climate Center

Climate Reality Project - Silicon Valley Chapter

Climate Reality Project, Orange County

Climate Reality Project, San Fernando Valley

Community Environmental Council

Construction Progress

Eden: Environmental Ministry, All Saints Church

Elders Climate Action SoCal Chapter

Enersign US

Essential Habitat Architecture

Facts: Families Advocating for Chemical & Toxics Safety

Hayward Construction

Hayward Score

Home Energy Services

Home Green Homes

Indivisible Altadena

Making Housing and Community Happen

Markoff Fullerton Architects

Mothers Out Front Silicon Valley

NorCal Elder Climate Action

Not/Not Architecture and Construction

NRDC

Oulipo Architecture Studio

Page and Turnbull

Paravant Architects

Passive House California

Phius

Resilient Palisades

Revision West

Rockwool North America

Santa Cruz Climate Action Network

Sidco Homes INC

Small Planet Supply

SoCal 350 Climate Action

Stopwaste

Susan Diana Harris Interiors

Sustainable Mill Valley

The Climate Center

The Passive House Network

Town of Portola Valley

US Green Building Council, California

Urban Environmentalists, Los Angeles

Vector Green Power, LLC

Wythe Windows

Opposition

None on file

Analysis Prepared by: Elizabeth MacMillan / NAT. RES. /

Date of Hearing: April 2, 2025

ASSEMBLY COMMITTEE ON UTILITIES AND ENERGY

Cottie Petrie-Norris, Chair

ABPCA Bill Id:AB 368 (

Author:Ward) – As Introduced Ver:February 3, 2025

SUBJECT: Energy: building standards: passive house standards

SUMMARY: Requires the California Energy Commission (CEC) to evaluate the passive house energy efficiency standards, and, if appropriate, adopt those standards, or any elements that align with the state’s existing requirements, as an alternative compliance pathway for the building efficiency standards.

EXISTING LAW:

1. Requires the CEC to adopt and update Building Energy Efficiency Standards (Energy Code) for most residential and non-residential buildings in the state of California every three years. (Public Resources Code § 25402)
2. Requires the CEC to adopt the building energy efficiency standards that are cost-effective when taken in their entirety and when amortized over the economic life of the structure. The CEC shall also consider other relevant factors, as required by Sections 11346.5 and 11357 of the Government Code, including, but not limited to, the impact on housing costs, the total statewide costs and benefits of the standard over its lifetime, economic impact on California businesses, and alternative approaches and their associated costs. (Public Resources Code § 25402(c))
3. Requires each utility to maintain records of the energy usage data of all buildings to which they provide service for at least the most recent 12 complete calendar months, and to deliver or otherwise provide that aggregated energy usage data for each covered building, as defined, to the owner, as specified. (Public Resources Code § 25402.10)
4. Requires the CEC to assess the potential for the state to reduce GHG emissions from the state’s residential and commercial building stock by at least 40% below 1990 levels by January 1, 2030. (Public Resources Code § 25403)
5. Requires the CEC to develop and implement a comprehensive program to achieve greater energy savings in California’s existing residential and nonresidential building stock. (Public Resources Code § 25943)
6. Requires the CEC to develop, and publish on the commission’s internet website, guidance and best practices to help building owners, the construction industry, and local governments overcome barriers to electrification of buildings. (Public Resources Code § 25233.5)
7. Establishes a charge on electricity and natural gas consumption to fund cost-effective energy efficiency and conservation activities. (Public Utilities Code §§381 and 890)
8. Require the California Air Resources Board (CARB) to ensure that statewide greenhouse gas emissions are reduced to 40% below the 1990 level by 2030. (Health & Safety Code § 38566)

FISCAL EFFECT: Unknown. This bill is keyed fiscal and will be referred to the Committee on Appropriations for its review.

CUSTOMER COST IMPACTS: This measure directs the CEC to consider adopting Passive House energy efficiency standards as an alternative option within California’s building codes. While implementing these standards could involve higher upfront construction costs, the investments in some cases could be offset by long-term energy consumption savings, resulting in overall cost benefits for consumers.​

BACKGROUND:

California Energy Code – Adopted in 1976 and updated every three years by the CEC, the building energy efficiency standards for residential and non-residential buildings, otherwise known as the Energy Code or Title 24, Part 6, entails energy and water efficiency standards for newly constructed buildings, additions to existing buildings, and alterations to existing buildings. These standards are updated to ensure that builders use the most energy-efficient technologies and construction, save energy, increase electricity supply reliability, increase indoor comfort, and help preserve the environment.^[1] Homes and businesses use nearly 70% of California’s electricity and are responsible for nearly 25% of the state’s greenhouse gas (GHG) emissions.^[2] The standards vary by building type and climate zone, as outlined in the California Code of Regulations.

Components of the California Energy Code – The Energy Code is conceptually divided into three basic sets:^[3]

1. Mandatory Measures: These are baseline requirements that apply to all buildings, regardless of location, building type, or compliance approach. They cover elements such as insulation, lighting, HVAC efficiency, and air sealing.
2. Performance Standards: Public Resources Code emphasizes the importance of building design and construction flexibility by requiring the CEC to establish performance standards, in the form of an “energy budget” which refers to energy consumption per square foot of floor space.^[4] These standards vary by building type and climate zone (California has 16 distinct climate zones). This approach provides flexibility, allowing builders and designers to meet energy efficiency targets using a combination of strategies suited to local conditions.
3. Prescriptive Standards: These are more structured requirements that outline specific predefined measures (e.g., U-factor windows, Seer 15 HVAC) that if followed exactly, will be deemed compliant.

Cost Effectiveness Factor. The CEC strives to balance environmental sustainability and cost concerns to provide California residents with energy that minimizes environmental impact while remaining affordable. Cost-effectiveness is calculated by determining the energy savings associated with implementing a more efficient building standard. The energy code is not applicable to all buildings in the state. State historical buildings, federal buildings, and some industrial or agricultural buildings may be exempt from certain provisions of the energy code. A building may also be exempted if implementing the provisions of the energy code leads to substantial cost increases. According to the CEC, efficiency standards for buildings and appliances together have saved Californians more than $100 billion in avoided energy costs over the last 50 years.^[5]

2019 Energy Code, “2019 Building Energy Efficiency Standards” – In May of 2018, the CEC adopted the 2019 Building Energy Efficiency Standards which were the first standards in the nation to require solar PV systems for new construction. These standards also include improved thermal building envelope standards (i.e., insulating the interior), residential and nonresidential ventilation requirements, and nonresidential lighting requirements. For residential buildings, according to the CEC, the standards will result in about 53% less energy use than under the 2016 standards. The CEC further estimated that the new standards will reduce GHG emissions by 700,000 metric tons over three years. As eluded earlier, statute requires that the CEC standards must be “cost-effective.” The CEC estimated that based on a 30-year mortgage, the 2019 standards will add about $40 per month in costs and result in about $80 per month in reduced energy costs. Should the CEC calculations for “cost-effectiveness” not hold for particular buildings – given differing rates, system costs, interconnection fees, or other factors in utility service territories – the PV requirements would not apply. The CEC also established a few outright exemptions to the new solar requirement. Primarily, homes that are shaded by trees, hills, other structures, etc. are not required to install solar. Additionally, homeowners in areas with community solar programs are also exempt from the requirement.

2022 Energy Code, “2022 Building Energy Efficiency Standards”– In August of 2021, the CEC adopted the 2022 Energy Code standards for newly constructed residential and commercial buildings, as well as additions and alterations to existing buildings with a focus on four primary areas:^[6]

• Requiring solar PV and battery storage systems for newly constructed nonresidential and high-rise multifamily buildings.^[7]
• Requiring the use of electric heat pumps for space heating and water heating.
• Establishing electric-ready requirements for all buildings, including single-family homes.
• Reinforcing and strengthening ventilation standards to improve the quality of indoor air quality.

Concurrently, section 10-109(k) of the 2022 Energy Code permits the CEC to determine that the solar PV and/or battery storage system requirements of Section 140.10, applicable to non-residential buildings, and Section 170.2, applicable to multi-family homes with more than three habitable stories, shall not apply if the CEC finds that its cost-effectiveness conclusions regarding solar PV and battery storage requirements are unreasonable for such buildings.

2025 Energy Code, “2025 Building Energy Efficiency Standards”– In September of 2024, the CEC adopted the 2025 Energy Code standards to expand the use of heat pumps for space conditioning and water heating in newly constructed single-family, multifamily, and select nonresidential buildings. These standards also allow for flexibility in taking alternative but equally efficient approaches such as:^[8]

• Updating ventilation requirements in multifamily buildings to improve indoor air quality.
• Updating photovoltaic and battery energy storage system standards for high-rise multifamily and nonresidential buildings to achieve cost effective installations
• Using heat pumps for both space heating and water heating, for homes hence expanding on the single heat pump requirements in the 2022 update.

Process and Timelines. The Energy Code standards are updated with extensive input from stakeholders such as the public, technical staff, and experts. The standards must be technologically feasible and cost-effective over the life of the building. The standards are usually discussed in public workshops and in online comments before being revised. Once approved, there is a one-year implementation period during which the CEC provides guidance, training, and technical assistance to help builders, code officials, and technicians prepare for the updates before they take effect.^[9]

What are Passive House Standards? While there is no standardized definition of passive house standards, the Passive House Institute US states that “Passive building comprises a set of design principles used to attain a quantifiable and rigorous level of energy efficiency within a specific quantifiable comfort level”^[10] Originally developed in Germany, they comprise a set of rigorous energy efficiency guidelines designed to create ultra-low-energy buildings that require minimal heating and cooling with a focus on airtight construction, superior insulation, and energy-efficient ventilation. The key principles of Passive House Design include:^[11]

1. Superinsulation

• High levels of insulation in walls, roofs, and floors to minimize heat loss reducing the need for active heating and cooling systems

1. Airtight Construction

• Ensuring the building envelope is extremely airtight to prevent heat loss

1. High-Performance Windows & Doors

• Typically, triple-pane windows are used to maximize solar heat gain in winter while minimizing overheating in summer.

1. Thermal Bridge-Free Design

• Avoiding materials and design features that allow heat to bypass insulation thus enhancing overall energy efficiency.

1. Heat Recovery Ventilation (HRV) or Energy Recovery Ventilation (ERV)

• Ensuring a constant supply of fresh air without significant heat loss hence maintaining indoor air quality while saving energy

CEC Considerations. The California Energy Commission (CEC) recognizes the benefits of Passive House standards and has taken steps to explore their integration into the state's building energy efficiency regulations. ^[12]A measure titled "Single Family Passive House Prescriptive Pathway" was developed to assess whether homes certified under Passive House standards could meet or exceed the prescriptive requirements of the 2022 California Energy Code. This measure aimed to identify any barriers to implementation and determine the enforceability of such standards within the state's regulatory framework. While recognizing the potential benefits of Passive House principles, the CEC has identified several concerns regarding their integration as follows:^[13]

1. Energy Modeling and Compliance Verification: Modeling Differences: Passive House utilizes specific energy modeling tools, such as the Passive House Planning Package (PHPP), which differ from the compliance software used for Title 24. This discrepancy raises challenges in verifying compliance and ensuring consistency between the two standards. ​
2. Climate Zone Adaptation: Diverse Climate Considerations: California encompasses 16 distinct climate zones, each with unique environmental conditions. Passive House standards, originally developed in Europe, may require adaptation to effectively address the diverse climatic conditions present across California. ​
3. Cost Implications: Economic Considerations: Implementing Passive House standards may involve higher upfront construction costs due to the use of specialized materials and construction techniques. Evaluating the cost-effectiveness and financial impact on builders and homeowners is a concern for widespread adoption given California’s high electric rates.

COMMENTS:

1. Author’s statement. According to the author, “AB 368 directs the California Energy Commission to evaluate and adopt certified Passive House (PH) standards as an alternative compliance pathway within Title 24, making it easier and more cost-effective to build high-performance, energy-efficient buildings. PH designs significantly reduce energy consumption and enhance resilience to climate change by utilizing airtight construction, superior insulation, and advanced ventilation systems. By streamlining certification and removing costly barriers, AB 368 will accelerate building decarbonization, improve indoor air quality, and support California’s climate goals.”
2. Cost.Cost.Cost. Maintaining the cost-effectiveness of California’s Energy Code is paramount to its long-term success. Since the 1970s, California’s Energy Code has been designed to advance technically feasible building practices while maintaining cost-effectiveness in order to protect residents from rising and volatile energy costs. As such, the committee As such, the committee recommends that the CEC evaluate the use of Passive House energy models currently required for Passive House certification in their analysis, and the cost effectiveness of Passive House construction compared to existing Title 24 construction. Subsequently, the CEC shall provide a one-time report documenting its findings and recommendations to the Legislature no later than December 31, 2026.
3. Prior Legislation

AB 1279 (Muratsuchi) established the policy of the state to achieve carbon neutrality as soon as possible, but no later than 2045. Status: Chapter 337, Statutes of 2022.

SB 68 (Becker) directed the CEC to gather and develop guidance and best practices to overcome barriers to the electrification of buildings and installation of electric vehicle charging equipment. This project implements the requirements of that bill to help commercial and residential building owners, the construction industry, and local governments. Status: Chapter 720, Statutes of 2021.

AB 3232 (Friedman) requires the CEC, by January 1, 2021, to assess the potential for the state to reduce GHG emissions from the state’s residential and commercial building stock by 40% below 1990 levels by January 1, 2030. Status: Chapter 373, Statutes of 2018.

SB 1477 (Stern) requires the CEC to develop a statewide market transformation initiative to transform the state’s market for low-emission space and water heating equipment for new and existing residential and nonresidential buildings and to develop an incentive program to fund near-zero emission technology for new residential and commercial buildings. Status: Chapter 378, Statutes of 2018.

SB 32 (Pavley) requires the CARB to ensure that statewide GHG emissions are reduced to 40% below the 1990 levels by 2030. Status: Chapter 249, Statutes of 2016.

AB 32 (Núñez) requires CARB to develop a Scoping Plan that describes the state’s approach to reducing GHGs to achieve the goal of reducing emissions to 1990 levels by 2020. Status: Chapter 488, Statutes of 2006.

1. This bill is double-referred; upon passage in this Committee, this bill will be referred to the Assembly Committee on Natural Resources.

REGISTERED SUPPORT / OPPOSITION:

Support

350 Conejo / San Fernando Valley
350 Humboldt
350 Ventura County Climate Hub
475 High Performance Building Supply
Abundant Housing LA
Active San Gabriel Valley
Alpen High Performance Products, INC.
Altadena Energy and Solar
Ban Sup
Best Techs Contracting Design Build Remodel, INC.
Building Doctors INC.
California Environmental Voters (formerly Clcv)
California Yimby
Carmel Building and Design
Casa Nova Studio
Clean Coalition
Climate Action California
Climate Center; the
Climate Reality Project - Silicon Valley Chapter
Climate Reality Project, Orange County
Climate Reality Project, San Fernando Valley
Community Environmental Council
Construction Progress
Eden: Environmental Ministry, All Saints Church
Elders Climate Action Socal Chapter
Enersign US
Essential Habitat Architecture
Facts: Families Advocating for Chemical & Toxics Safety
Hayward Construction
Hayward Score
Home Energy Services
Home Green Homes
Indivisible Altadena
Making Housing and Community Happen
Markoff Fullerton Architects
Mothers Out Front Silicon Valley
Norcal Elder Climate Action
Not/not Architecture and Construction
Nrdc
Oulipo Architecture Studio
Page & Turnbull, INC.
Page and Turnbull
Paravant Architects
Passive House California
Phius
Resilient Palisades
Revision West
Rockwool
Rockwool North America
Santa Cruz Climate Action Network
Sidco Homes INC
Small Planet Supply
Socal 350 Climate Action
Susan Diana Harris Interiors
Sustainable Mill Valley
The Climate Center
The Passive House Network
Town of Portola Valley
U.S. Green Building Council, California
Urban Environmentalists, Los Angeles
Vector Green Power, LLC
Wythe Windows

Opposition

None file.

Analysis Prepared by: Lina V. Malova / U. & E. / (916) 319-2083

1. Title 24 Express, “What is 24?” https://www.title24express.com/what-is-title-24/ ↑

2. California Energy Commission, “2025 California Energy Code”; Fact Sheet. ↑

3. California Energy Commission, “2022 Building Energy Efficiency Standards for Residential and Nonresidential Buildings: For the 2022 Building Energy Efficiency Standards Title 24, Part 6, and Associated Administrative Regulations in Part 1”; Accessed March 25, 2027; https://www.energy.ca.gov/publications/2022/2022-building-energy-efficiency-standards-residential-and-nonresidential ↑

4. Pg.4, “2022 BUILDING ENERGY EFFICIENCY STANDARDS FOR RESIDENTIAL AND NONRESIDENTIAL BUILDINGS”; August 2022 ↑

5. California Energy Commission, “ Fact Sheet; “2025 California Energy Code” ↑

6. Pg. iv, CEC; “ 2022 Building Energy Efficiency Standards for Residential and Nonresidential Buildings,” August 2022 ↑

7. High-rise multifamily buildings are multifamily buildings that have four or more habitable stories ↑

8. CEC, “2025 California Energy Code Fact Sheet” ↑

9. Ibid ↑

10. About Passive House – What is a Passive House, Passive house Institute, https://passivehouse.com/02_informations/01_whatisapassivehouse/01_whatisapassivehouse.htm#:~:text=Yet%2C%20a%20Passive%20House%20is%20more%20than,over%2075%%20compared%20to%20average%20new%20builds. ↑

11. Passive House Requirements, Passive House Institute, https://passiv.de/en/02_informations/02_passive-house-requirements/02_passive-house-requirements.htm?utm_source=chatgpt.com, 2024. ↑

12. Phase I – Summary of the Existing Literature: Grid Benefits of Passive Homes, Memorandum, Opinion Dynamics, November 17, 2021, https://www.cpuc.ca.gov/-/media/cpuc-website/divisions/energy-division/documents/building-decarb/passive-house-phase-i-report.pdf ↑

13. Rick Winch et al, Barriers to Incorporating Passive House Concepts in Residential New Construction, Opinion Dynamics, December 11, 2019. ↑