2025 EXISTING SINGLE-FAMILY
BUILDING REACH CODE
Presented by:
Lori Mitchell, Director, Energy Department
Julie Benabente, Deputy Director, Energy Department
Kate Ziemba, Senior Environmental Program Manager, Energy Department City Council Meeting: September 9, 2025
BUILDING STANDARDS AND REACH CODES OVERVIEW
California Building Energy Efficiency Standards and California Green Building Standards
• Standards are set by the California Energy Commission • Increase energy conservation and reduce energy costs in buildings • Adopted every three years
Building Reach Codes
• Increase building code requirements above the current Standards • Adopted in San José since 2019 (last two building code cycles) • Previous reach codes only applied to new construction • 2025 new construction standards now on par with previous reach codes
• Typically can be adopted at any time
• New state law limits residential reach codes Oct. 1, 2025 – June 1, 2031, unless exceptions apply
2025 new construction standards on par with previous reach codes. New opportunities will be known in early 2026. 2 OVERVIEW OF PROPOSED ORDINANCE
AC to Heat Pump
› Requires property owners installing
space cooling (AC) to install either:
1. A heat pump
2. Efficiency measures
Electric-Ready
› Targeted to permit applicants completing
a relevant addition or alteration
› Requires electric-
readiness (circuits or conduit)
Single Family (Existing Buildings)
3 AC TO HEAT PUMP COMPONENT
When replacing or adding an AC either:
Pathway 1: Install a heat pump HVAC system (cooling +
heating) and meet State Standards
OR
Pathway 2: Install a standard AC (cooling only)
alongside the existing gas furnace and make other
energy efficiency improvements above the State
Standards
Exceptions:
• old knob and tube wiring
• triggers panel upgrade (when standard AC would not)
• inaccessible attics/ducts
• asbestos disturbance
• households with income up to 100% of Area Median
Income (equity-based exemption)
4 Pathway 1: Heat Pump HVAC Installation
• The incremental upfront cost is estimated at
$650-$1,700
Pathway 2: Additional Energy Efficiency
Measures (with Standard AC)
• Additional energy efficiency measures may
include fan efficacy, air sealing, and attic
insulation
• Cost for compliance is estimated to range from
$600 - $7,500 based on the existing
configuration and scope of the planned upgrade
AC TO HEAT PUMP COST ESTIMATES
5 Rebates and zero-interest financing are available to single-family residents for installing high-efficiency heat pump HVAC systems:
• San Jose Clean Energy’s (SJCE) EcoHome Rebate
• access $2,500 to $3,500
• may lower incentive in the fall to be more in line with industry • budget of $2.675M for Fiscal Year (FY) 2025-2026
• could fund an est. 590 heat pump HVACs per fiscal year at this funding level
• TECH Clean CA program (statewide)
• offers up to $4,000 in additional incentives (as of August 2025) • SJCE EcoHome Payment Plan
• pilot provides zero interest loans for heat pump installations that are repaid on-bill
• loan terms are for 2, 3, or 5 years, up to $5,000
AC TO HEAT PUMP FUNDING ASSISTANCE
6 .
AC TO HEAT PUMP SAVES $$ TODAY
7 Source: Peninsula Clean Energy and Silicon Valley Clean Energy VCHP = Variable Capacity Heat Pump,
which has higher energy efficiency
When doing alterations and/or additions within a specific proximity to an existing gas appliance or including a new gas appliance:
• Require some electrical infrastructure (e.g., circuits, conduits, reserved breakers)
• Covers the following gas appliances: stoves/cooktops, dryers, and water heaters
Cost:
• May range from approximately $150 to $1,000 per appliance Exceptions:
• Triggers electrical permit otherwise not required for the project • Triggers electrical service and/or panel upgrades
• Triggers repairs and/or safety improvements
• New attached accessory dwelling units
• Mobile homes, manufactured housing
• Households with income up to 100% of Area Median Income (equity-based exemption)
ELECTRIC -READY COMPONENT
8 • Hosted five City webinars
• Promoted via email to the City’s building contractor list and Climate Smart notification list:
• Included neighborhood associations, building professionals, and San José-based community organizations and business groups (e.g. Santa Clara County Realtors Association) • Promoted via City e-newsletter, website, and social media • Presented at the City’s Developer Roundtable meeting
• Promoted regional virtual/in-person event to contractors via email • Questions responded to at meetings and incorporated into an FAQ document • Overall general support for the City’s proposed reach code • Resident concerns regarding:
• Communities’ familiarity with/upfront cost of complying with Air District Rules • Need for ongoing rebates to support required upgrades • In response, staff updated the proposal to include an exemption for households earning up to 100% of Area Median Income, in coordination with the Housing Department • Energy Dept. will seek approval for Fiscal Year 2026-2027 EcoHome Rebate funding in May 2026 and continue to help community and workers prepare for Air District Rules
COMMUNITY OUTREACH AND ENGAGEMENT
9 WHY WE ARE CONSIDERING THIS
• Air Quality Improvements/ Forthcoming Restrictions
• Bay Area Air District Rules starting in 2029 for gas furnaces • Scale of Impact
• Existing buildings energy is 1/3 of San José’s greenhouse gas emissions
• San José has over 185,000 single-family homes and duplexes • Heat pumps represent a 22-40% reduction in emissions
• Cost-Effective for Residents
• Both lifecycle and day one utility bills cost savings with a heat pump HVAC
• Available Financial Assistance
• Supports Workforce and Community Preparation/Transition Time Sensitive
• AB 130 (passed in late June 2025) limits new reach codes October 1, 2025 – June 1, 2031
• Reduce building professional complexity/ confusion with January 1, 2026, effective date
10 Existing Building Reach Code Proposed/Planned in 2025 Code Cycle
OTHER JURISDICTIONS
Jurisdiction Requirement Status
Cupertino Performance Margin Requirement Adopted; first reading September 17, 2024; second reading/adopted October 1, 2024; pending CEC approval.
Glendale AC to Heat Pump First reading September 9; second reading TBD Menlo Park AC to Heat Pump, electric-ready,
FlexPath
Adopted; approved first reading August 12; second
reading August 26
Mountain View AC to Heat Pump, electric-ready Approved first reading August 26; second reading September 9
Ojai FlexPath Adopted; approved first reading August 12; second reading August 26
Palo Alto AC to Heat Pump, electric-ready (kitchen
remodel), FlexPath
First reading September 8; second reading TBD
San Francisco All Electric Major Renovations Approved first reading July 29; second reading on September 2
Sunnyvale AC to Heat Pump, electric-ready Adopted; approved first reading August 12 and second reading August 26
11 • Make findings related to the local geographical, topographical, climatic conditions and cost effectiveness, which are necessary to make modifications to the State of California’s Building Energy Efficiency Standards;
• Approve an ordinance amending various sections of Chapter 24.12 of Title 24 to modify provisions of the 2025 California Building Energy Efficiency Standards with certain exceptions, modifications, and additions which serve as a reach code to increase building efficiency, mandate electric- and solar-readiness, and incentivize all-electric development; and
• Authorize the City Manager to submit a reach code submittal package to the Building Standards Commission and California Energy Commission for its approval as required by law.
RECOMMENDATION
12 QUESTIONS?
Presenters:
Lori Mitchell, Director, Energy Department
Julie Benabente, Deputy Director, Energy Department
Kate Ziemba, Senior Environmental Program Manager, Energy Department 13