Cost-Effectiveness Analysis: Central Coast Community Energy 15 California Energy Codes & Standards | A statewide utility program 2024-03-15 Table 12: E-TOU-C Rate Envelope and Duct Measures Single Family Cost-Effectiveness Summary 1978-1991 Table 13: E-Elec Rate Solar PV Single Family Cost-Effectiveness Summary 1978-1991 Case
Annual
Elec
Savings
(kWh)
Annual
Gas
Savings
(therms)
Average
Annual
GHG
Reductions
(metric
tons)
Annual
Site
Energy
(kBtu)
Annual
Source
Energy
(kBtu/ft2)
Utility Cost Savings Incremental Cost On-Bill 2025 LSC
First Year Lifecycle
(2022$)
First
Year
Lifecycle
(2022$)
B/C
Ratio NPV B/C Ratio NPV
30% Air Sealing 7 9 0.06 950 0.51 $34 $997 $4,684 $4,684 0.21 ($3,687) 0.26 ($3,452) New Ducts: R-6 90 33 0.20 3,565 1.93 $104 $2,827 $4,808 $4,808 0.59 ($1,982) 1.00 ($13) New Ducts: R-8 93 35 0.22 3,807 2.05 $109 $2,993 $6,311 $6,311 0.47 ($3,318) 0.81 ($1,200) Duct Sealing: 10% 65 16 0.10 1,810 0.98 $60 $1,607 $2,590 $2,590 0.62 ($982) 0.97 ($75) Attic Insulation: R-38 26 13 0.08 1,425 0.77 $39 $1,084 $2,555 $2,555 0.42 ($1,472) 0.73 ($691) Attic Insulation: R-49 33 17 0.10 1,770 0.95 $49 $1,346 $3,612 $3,612 0.37 ($2,265) 0.65 ($1,264) R-19 Raised Floor Insulation (75) 47 0.27 4,479 2.55 $50 $1,804 $3,633 $3,633 0.50 ($1,829) 1.51 $1,862 R-30 Raised Floor Insulation (79) 59 0.34 5,623 3.18 $69 $2,391 $4,113 $4,113 0.58 ($1,721) 1.68 $2,797 Cool Roof (0.20 Ref) (at roof
replacement) 7 (9) (0.05) (874) (0.47) ($14) ($465) $893 $1,203 0.00 ($1,668) 0.00 ($2,236) Cool Roof (0.25 Ref) (at roof
replacement) 9 (14) (0.08) (1,335) (0.73) ($23) ($726) $1,786 $2,407 0.00 ($3,132) 0.00 ($4,005) Window Upgrade: 0.28 vs 0.30 U-factor 56 26 0.16 2,796 1.51 $78 $2,144 $11,871 $11,871 0.18 ($9,727) 0.31 ($8,175) Case
Annual
Elec
Savings
(kWh)
Annual
Gas
Savings
(therms)
Average
Annual
GHG
Reductions
(metric
tons)
Annual
Site
Energy
(kBtu)
Annual
Source
Energy
(kBtu/ft2)
Utility Cost Savings Incremental Cost On-Bill 2025 LSC
First Year Lifecycle
(2022$)
First
Year
Lifecycle
(2022$)
B/C
Ratio NPV B/C Ratio NPV
3kW PV 3,733 0 0.10 12,736 1.18 $564 $12,855 $9,608 $11,574 1.11 $1,281 0.70 ($3,432)
Cost-Effectiveness Analysis: Central Coast Community Energy 16 California Energy Codes & Standards | A statewide utility program 2024-03-15 Table 14: E-Elec Rate HPSH Single Family Cost-Effectiveness Summary 1978-1991 Table 15: E-Elec Rate HPWH Single Family Cost-Effectiveness Summary 1978-1991 Case
Annual
Elec
Savings
(kWh)
Annual
Gas
Savings
(therms)
Average
Annual
GHG
Reductions
(metric
tons)
Annual
Site
Energy
(kBtu)
Annual
Source
Energy
(kBtu/ft2)
Utility Cost Savings Incremental Cost On-Bill 2025 LSC
First Year Lifecycle
(2022$)
First
Year
Lifecycle
(2022$)
B/C
Ratio NPV B/C Ratio NPV
DFHP Existing Furnace (1,277) 150 0.67 10,672 5.76 ($265) ($4,090) $2,349 $1,008 0.00 ($5,098) 5.88 $4,914 DFHP New Furnace (1,283) 147 0.64 10,271 5.54 ($275) ($4,364) $7,200 $8,708 0.00 ($13,072) 0.80 ($1,776) HPSH (Std Efficiency) (1,644) 169 0.71 11,279 6.01 ($367) ($6,181) $1,020 $1,618 0.00 ($7,799) 4.21 $5,192 HPSH (High Efficiency) (1,348) 169 0.76 12,291 6.57 ($259) ($3,733) $3,951 $6,430 0.00 ($10,162) 1.43 $2,761 Ducted MSHP (1,341) 169 0.76 12,314 6.58 ($257) ($3,679) $1,442 $2,951 0.00 ($6,631) 3.13 $6,289 Ductless MSHP (Std Efficiency) (1,152) 143 0.65 10,417 5.61 ($251) ($3,900) $8,826 $14,274 0.00 ($18,174) 0.61 ($5,499) Ductless MSHP (High Efficiency) (407) 143 0.77 12,957 7.06 $18 $2,227 $12,410 $20,158 0.11 ($17,931) 0.73 ($5,390) HPSH + 3kW PV 3,309 169 0.85 28,180 7.57 $361 $10,401 $10,628 $13,192 0.79 ($2,791) 1.21 $2,758 Case
Annual
Elec
Savings
(kWh)
Annual
Gas
Savings
(therms)
Average
Annual
GHG
Reductions
(metric
tons)
Annual
Site
Energy
(kBtu)
Annual
Source
Energy
(kBtu/ft2)
Utility Cost Savings Incremental Cost On-Bill 2025 LSC
First Year Lifecycle
(2022$)
First
Year
Lifecycle
(2022$)
B/C
Ratio NPV B/C Ratio NPV
240V Fed. Min. HPWH (1,391) 170 0.86 12,273 7.77 ($381) ($6,493) $4,332 $6,554 0.00 ($13,047) 1.64 $4,202 240V Market Std. NEEA HPWH (1,077) 170 0.90 13,361 8.17 ($179) ($1,898) $5,193 $7,967 0.00 ($9,865) 1.64 $5,087 240V Market Std. NEEA HPWH + DR (967) 170 0.92 13,738 8.39 ($129) ($743) $5,193 $7,967 0.00 ($8,710) 1.79 $6,285 120V Market Std. NEEA HPWH (935) 171 0.92 13,893 8.43 ($116) ($452) $2,893 $4,273 0.00 ($4,725) 3.39 $10,213 240V Fed. Min. HPWH (Exterior Closet) (1,424) 169 0.85 12,036 7.66 ($320) ($5,117) $4,751 $6,973 0.00 ($12,090) 1.49 $3,384 240V Fed. Min. HPWH (Interior Closet) (1,162) 130 0.67 9,069 6.00 ($286) ($4,830) $4,413 $6,634 0.00 ($11,464) 1.16 $1,058 240V Fed. Min. HPWH (Interior Closet,
ducted) (1,355) 180 0.93 13,367 8.37 ($275) ($3,961) $5,492 $7,714 0.00 ($11,675) 1.59 $4,541 240V Fed. Min. HPWH + 3kW PV 3,562 170 1.00 29,174 9.33 $558 $14,917 $13,940 $18,128 0.82 ($3,211) 1.21 $3,800
Cost-Effectiveness Analysis: Central Coast Community Energy 17 California Energy Codes & Standards | A statewide utility program 2024-03-15
4.3 1992-2010 Vintage
Table 16: E-TOU-C Rate HPSH Single Family Cost-Effectiveness Summary 1992-2010 Table 17: E-TOU-C Rate HPWH Single Family Cost-Effectiveness Summary 1992-2010 Case
Annual
Elec
Savings
(kWh)
Annual
Gas
Savings
(therms)
Average
Annual
GHG
Reductions
(metric
tons)
Annual
Site
Energy
(kBtu)
Annual
Source
Energy
(kBtu/ft2)
Utility Cost Savings Incremental Cost On-Bill 2025 LSC
First Year Lifecycle
(2022$)
First
Year
Lifecycle
(2022$)
B/C
Ratio NPV B/C Ratio NPV
DFHP Existing Furnace (1,130) 136 0.61 9,784 5.34 ($130) ($1,209) $2,349 $1,008 0.00 ($2,217) 5.65 $4,692 DFHP New Furnace (1,134) 133 0.59 9,426 5.14 ($138) ($1,437) $7,200 $8,708 0.00 ($10,145) 0.76 ($2,098) HPSH (Std Efficiency) (1,439) 151 0.65 10,216 5.51 ($239) ($3,515) $1,020 $1,618 0.00 ($5,133) 4.00 $4,859 HPSH (High Efficiency) (1,181) 151 0.69 11,096 5.98 ($129) ($1,004) $3,951 $6,430 0.00 ($7,434) 1.32 $2,078 Ducted MSHP (1,173) 151 0.69 11,126 6.00 ($125) ($919) $1,442 $2,951 0.00 ($3,870) 2.91 $5,623 Ductless MSHP (Std Efficiency) (1,025) 133 0.61 9,762 5.31 ($98) ($540) $8,826 $14,274 0.00 ($14,814) 0.59 ($5,782) Ductless MSHP (High Efficiency) (388) 133 0.71 11,935 6.50 $166 $5,465 $12,410 $20,158 0.27 ($14,693) 0.67 ($6,588) Case
Annual
Elec
Savings
(kWh)
Annual
Gas
Savings
(therms)
Average
Annual
GHG
Reductions
(metric
tons)
Annual
Site
Energy
(kBtu)
Annual
Source
Energy
(kBtu/ft2)
Utility Cost Savings Incremental Cost On-Bill 2025 LSC
First Year Lifecycle
(2022$)
First
Year
Lifecycle
(2022$)
B/C
Ratio NPV B/C Ratio NPV
240V Fed. Min. HPWH (1,392) 170 0.86 12,259 7.77 ($358) ($6,017) $4,332 $6,554 0.00 ($12,570) 1.64 $4,186 240V Market Std. NEEA HPWH (1,077) 170 0.90 13,347 8.17 ($208) ($2,590) $5,193 $7,967 0.00 ($10,557) 1.63 $5,053 240V Market Std. NEEA HPWH + DR (968) 170 0.92 13,724 8.39 ($152) ($1,319) $5,193 $7,967 0.00 ($9,286) 1.79 $6,269 120V Market Std. NEEA HPWH (935) 171 0.92 13,876 8.42 ($136) ($941) $2,893 $4,273 0.00 ($5,213) 3.39 $10,196 240V Fed. Min. HPWH (Exterior Closet) (1,424) 169 0.85 12,036 7.66 ($376) ($6,432) $4,751 $6,973 0.00 ($13,405) 1.49 $3,384 240V Fed. Min. HPWH (Interior Closet) (1,181) 130 0.66 8,979 5.96 ($331) ($5,899) $4,413 $6,634 0.00 ($12,534) 1.14 $941 240V Fed. Min. HPWH (Interior Closet,
ducted) (1,357) 180 0.93 13,354 8.37 ($327) ($5,187) $5,492 $7,714 0.00 ($12,900) 1.59 $4,524
Cost-Effectiveness Analysis: Central Coast Community Energy 18 California Energy Codes & Standards | A statewide utility program 2024-03-15 Table 18: E-TOU-C Rate Envelope and Duct Measures Single Family Cost-Effectiveness Summary 1992-2010 Table 19: E-Elec Rate Solar PV Single Family Cost-Effectiveness Summary 1992-2010 Case
Annual
Elec
Savings
(kWh)
Annual
Gas
Savings
(therms)
Average
Annual
GHG
Reductions
(metric
tons)
Annual
Site
Energy
(kBtu)
Annual
Source
Energy
(kBtu/ft2)
Utility Cost Savings Incremental Cost On-Bill 2025 LSC
First Year Lifecycle
(2022$)
First
Year
Lifecycle
(2022$)
B/C
Ratio NPV B/C Ratio NPV
30% Air Sealing 4 6 0.04 613 0.33 $25 $729 $4,684 $4,684 0.16 ($3,955) 0.17 ($3,901) New Ducts: R-6 49 11 0.07 1,267 0.68 $42 $1,109 $4,808 $4,808 0.23 ($3,700) 0.37 ($3,043) New Ducts: R-8 53 14 0.09 1,530 0.82 $48 $1,282 $6,311 $6,311 0.20 ($5,029) 0.33 ($4,213) Duct Sealing: 10% 6 5 0.03 523 0.28 $12 $346 $1,400 $1,400 0.25 ($1,054) 0.49 ($718) Attic Insulation: R-38 4 3 0.02 335 0.18 $8 $227 $1,781 $1,781 0.13 ($1,554) 0.25 ($1,332) Attic Insulation: R-49 9 6 0.04 628 0.34 $15 $433 $1,827 $1,827 0.24 ($1,395) 0.46 ($978) Cool Roof (0.20 Ref) (at roof
replacement) 0 (7) (0.04) (718) (0.39) ($14) ($413) $893 $1,203 0.00 ($1,616) 0.00 ($2,069) Cool Roof (0.25 Ref) (at roof
replacement) (1) (11) (0.06) (1,096) (0.60) ($21) ($636) $1,786 $2,407 0.00 ($3,043) 0.00 ($3,722) Window Upgrade: 0.28 vs 0.30 U-factor 32 39 0.23 3,968 2.15 $84 $2,423 $11,871 $11,871 0.20 ($9,449) 0.42 ($6,826) Case
Annual
Elec
Savings
(kWh)
Annual
Gas
Savings
(therms)
Average
Annual
GHG
Reductions
(metric
tons)
Annual
Site
Energy
(kBtu)
Annual
Source
Energy
(kBtu/ft2)
Utility Cost Savings Incremental Cost On-Bill 2025 LSC
First Year Lifecycle
(2022$)
First
Year
Lifecycle
(2022$)
B/C
Ratio NPV B/C Ratio NPV
3kW PV 3,654 0 0.10 12,468 1.15 $475 $10,820 $9,608 $11,574 0.93 ($754) 0.70 ($3,499)
Cost-Effectiveness Analysis: Central Coast Community Energy 19 California Energy Codes & Standards | A statewide utility program 2024-03-15 Table 20: E-Elec Rate HPSH Single Family Cost-Effectiveness Summary 1992-2010 Table 21: E-Elec Rate HPWH Single Family Cost-Effectiveness Summary 1992-2010 Case
Annual
Elec
Savings
(kWh)
Annual
Gas
Savings
(therms)
Average
Annual
GHG
Reductions
(metric
tons)
Annual
Site
Energy
(kBtu)
Annual
Source
Energy
(kBtu/ft2)
Utility Cost Savings Incremental Cost On-Bill 2025 LSC
First Year Lifecycle
(2022$)
First
Year
Lifecycle
(2022$)
B/C
Ratio NPV B/C Ratio NPV
DFHP Existing Furnace (1,130) 136 0.61 9,784 5.34 ($321) ($5,572) $2,349 $1,008 0.00 ($6,580) 5.65 $4,692 DFHP New Furnace (1,134) 133 0.59 9,426 5.14 ($329) ($5,794) $7,200 $8,708 0.00 ($14,503) 0.76 ($2,098) HPSH (Std Efficiency) (1,439) 151 0.65 10,216 5.51 ($407) ($7,359) $1,020 $1,618 0.00 ($8,977) 4.00 $4,859 HPSH (High Efficiency) (1,181) 151 0.69 11,096 5.98 ($314) ($5,234) $3,951 $6,430 0.00 ($11,663) 1.32 $2,078 Ducted MSHP (1,173) 151 0.69 11,126 6.00 ($311) ($5,162) $1,442 $2,951 0.00 ($8,113) 2.91 $5,623 Ductless MSHP (Std Efficiency) (1,025) 133 0.61 9,762 5.31 ($141) ($1,533) $8,826 $14,274 0.00 ($15,807) 0.59 ($5,782) Ductless MSHP (High Efficiency) (388) 133 0.71 11,935 6.50 $89 $3,706 $12,410 $20,158 0.18 ($16,452) 0.67 ($6,588) HPSH + 3kW PV 3,514 151 0.78 27,117 7.07 $323 $9,292 $10,628 $13,192 0.70 ($3,900) 1.19 $2,475 Case
Annual
Elec
Savings
(kWh)
Annual
Gas
Savings
(therms)
Average
Annual
GHG
Reductions
(metric
tons)
Annual
Site
Energy
(kBtu)
Annual
Source
Energy
(kBtu/ft2)
Utility Cost Savings Incremental Cost On-Bill 2025 LSC
First Year Lifecycle
(2022$)
First
Year
Lifecycle
(2022$)
B/C
Ratio NPV B/C Ratio NPV
240V Fed. Min. HPWH (1,392) 170 0.86 12,259 7.77 ($393) ($6,807) $4,332 $6,554 0.00 ($13,361) 1.64 $4,186 240V Market Std. NEEA HPWH (1,077) 170 0.90 13,347 8.17 ($268) ($3,956) $5,193 $7,967 0.00 ($11,923) 1.63 $5,053 240V Market Std. NEEA HPWH + DR (968) 170 0.92 13,724 8.39 ($217) ($2,801) $5,193 $7,967 0.00 ($10,769) 1.79 $6,269 120V Market Std. NEEA HPWH (935) 171 0.92 13,876 8.42 ($205) ($2,508) $2,893 $4,273 0.00 ($6,781) 3.39 $10,196 240V Fed. Min. HPWH (Exterior Closet) (1,424) 169 0.85 12,036 7.66 ($408) ($7,166) $4,751 $6,973 0.00 ($14,139) 1.49 $3,384 240V Fed. Min. HPWH (Interior Closet) (1,181) 130 0.66 8,979 5.96 ($383) ($7,073) $4,413 $6,634 0.00 ($13,708) 1.14 $941 240V Fed. Min. HPWH (Interior Closet,
ducted) (1,357) 180 0.93 13,354 8.37 ($365) ($6,044) $5,492 $7,714 0.00 ($13,757) 1.59 $4,524 240V Fed. Min. HPWH + 3kW PV 3,562 170 1.00 29,160 9.33 $468 $12,827 $13,940 $18,128 0.71 ($5,301) 1.21 $3,767
Cost-Effectiveness Analysis: Central Coast Community Energy 20 California Energy Codes & Standards | A statewide utility program 2024-03-15
4.4 Sensitivities
Table 22 shows the On-Bill NPV results of Climate Zone 5 with 3CE utility rates and the impacts of escalation rates for select cases. The “Standard Results” in Table 22 assumes the escalation rates used in the analysis presented elsewhere in this report. Table 23 shows the impact of electrical panel upgrades. The “Standard Results” in Table 23 does not assume a panel upgrade is required. Both cases in Table 23 are based on the escalation rates used in the analysis presented elsewhere in this report.
Table 22. Sensitivity Analysis Results for On-Bill NPV
Measure Vintage Standard
Results
2025 LSC
Escalation
DFHP Existing Furnace 1992-2010 ($2,217) $1,935
DFHP New Furnace 1992-2010 ($10,145) ($6,117)
HPSH (Std Efficiency) 1992-2010 ($5,133) ($669)
HPSH (High Efficiency) 1992-2010 ($7,434) ($2,838)
Ducted MSHP 1992-2010 ($3,870) $730
HPSH + 3kW PV 1992-2010 ($3,900) $1,238
240V Fed. Min. HPWH 1992-2010 ($12,570) ($8,539)
240V Market Std. NEEA HPWH 1992-2010 ($10,557) ($6,946) 240V Market Std. NEEA HPWH + DR 1992-2010 ($9,286) ($5,730) 120V Market Std. NEEA HPWH 1992-2010 ($5,213) ($1,715)
240V Fed. Min. HPWH (Exterior Closet) 1992-2010 ($13,405) ($9,369) 240V Fed. Min. HPWH (Interior Closet) 1992-2010 ($12,534) ($10,102) 240V Fed. Min. HPWH (Interior Closet, ducted) 1992-2010 ($12,900) ($8,604) 240V Fed. Min. HPWH + 3kW PV 1992-2010 ($5,301) $554
30% Air Sealing Pre-1978 ($3,151) ($2,262)
R-6 Ducts Pre-1978 ($379) $1,649
R-8 Ducts Pre-1978 ($1,677) $457
10% Duct Sealing Pre-1978 ($75) $1,230
R-13 Wall Insulation Pre-1978 $653 $2,616
R-38 Attic Insulation Pre-1978 ($3,793) ($2,317)
R-49 Attic Insulation Pre-1978 ($4,194) ($2,582)
R-30 Raised Floor Insulation Pre-1978 $1,898 $5,830
Cool Roof (0.20 Ref) (at roof replacement) Pre-1978 ($1,860) ($2,356) Table 23. Electric Panel Upgrade Sensitivity [Pre-1978]
Measure
Standard Results Electric Panel Upgrade
On-Bill NPV LSC NPV On-Bill NPV LSC NPV
HPSH (Std Efficiency) ($8,298) $7,900 ($13,368) $5,120
240V Fed. Min. HPWH ($11,721) $4,252 ($14,600) $1,472
Cost-Effectiveness Analysis: Central Coast Community Energy 21 California Energy Codes & Standards | A statewide utility program 2024-03-15 5 Summary
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 costeffectiveness 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 pump space heating: HPSHs were found to be LSC cost-effective in most cases, but not On-Bill costeffective in any case. Cost-effectiveness for the ductless MSHP cases was poorer and was found to be LSC cost-effective for only the pre-1978 vintage for high efficiency equipment. 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.
b. Ductless MSHPs, evaluated for homes with existing ductless systems, have a high incremental cost because they are 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.
2. Heat pump water heating: All the HPWH measures were LSC cost-effective but were not On-Bill cost-effective for all three vintages. 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. a. Various HPWH locations were also explored, however there are some factors outside of costeffectiveness 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).
3. Envelope measures: Improving envelope performance can be very cost-effective in older homes. However, none of the envelope measures were found to be cost-effective in homes built 1978 and later. 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 for the pre-1978 vintage. a. Adding new ducts with R-6, R-8 or duct sealing to 10% showed to be cost effective based on LSC only. b. Adding attic insulation was not cost effective based on either metric. c. Wall insulation showed to be cost effective On-Bill and on LSC. d. Adding R-19 or R-30 floor insulation was cost-effective On-Bill and on LSC. e. Upgrading to a cool roof at roof replacement with 0.2 or 0.25 solar reflectance was shown to not be cost effective. This is expected in Climate Zone 5 where heating loads dominate since cool roofs increase heating energy use by reducing solar heat gain through the roof and attic.
Cost-Effectiveness Analysis: Central Coast Community Energy 22 California Energy Codes & Standards | A statewide utility program 2024-03-15 f. 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 showed to be substantial, even though it is not cost-effective.
4. 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.
5. Table 22 shows how escalation rate assumptions will impact cost-effectiveness. a. 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 as well as envelope and duct 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.4 The CPUC will decide 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 costeffective due to lower utility bill cost savings.
6. 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 for vintages pre-1978 and 1978-1991.
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 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.
4 https://www.cpuc.ca.gov/industries-and-topics/electrical-energy/electric-costs/demand-response-dr/demand-flexibilityrulemaking
Cost-Effectiveness Analysis: Central Coast Community Energy 23 California Energy Codes & Standards | A statewide utility program 2024-03-15 6 References
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-affairsdivision/reports/2021/senate-bill-695-report-2021-and-en-banc-whitepaper_final_04302021.pdf Statewide Reach Codes Team. (2024). 2022 Cost-Effectiveness Study: Existing Single Family Building Upgrades.
Prepared by Frontier Energy. . Retrieved from Not yet published
Cost-Effectiveness Analysis: Central Coast Community Energy 24 California Energy Codes & Standards | A statewide utility program 2024-03-15 7 Appendices
7.1 Map of California Climate Zones
Climate zone geographical boundaries are depicted in Figure 1. The map in Figure 1 along with a zip-code search directory is available at: https://ww2.energy.ca.gov/maps/renewable/building_climate_zones.html Figure 1. Map of California climate zones.
Cost-Effectiveness Analysis: Central Coast Community Energy 25 California Energy Codes & Standards | A statewide utility program 2024-03-15
7.2 Utility Rate Schedules
The Reach Codes Team used 3CE electricity and SoCalGas gas tariffs detailed below to determine the On-Bill savings for each package.
7.2.1 Central Coast Community Energy – Electricity
Following are the 3CE tariffs applied in this study. The E-TOU-C and E-Elec rate was applied to PG&E territory T, climate zone 5.5 Table 24 and Table 25 provide a comparison of the generation rates and total effective rates comparing 3CE and PG&E’s standard E-TOU-C rate and electric E-Elec rate.
The 2019 PCIA charge was used based on feedback from SLO staff.
Table 24: Comparison of 3CE and PG&E’s E-TOU-C Rates
PG&E/3CE Comparison Summer
Peak
Summer
Part-Peak
Summer
Off-Peak
Winter
Peak
Winter
Part-Peak
Winter
Off-Peak
PG&E Bundled Generation
Rate ($/kWh) (No PCIA
Charge)
$0.22387 0 $0.16043 $0.17528 0 $0.15025
3CE Bundled Generation Rate
($/kWh) (No PCIA Charge) $0.22422 0 $0.09322 $0.18422 0 $0.10022 Bundled Generation Rate %
Difference (0.2%) 0 42% (5%) 0 33%
PG&E Total Rate ($/kWh) $0.61806 0 $0.53462 $0.51536 0 $0.48701 3CE Total Rate ($/kWh) $0.61794 0 $0.46694 $0.52383 0 $0.43651 Total Rate % Difference .02% 0 13% (2%) 0 10%
Table 25: Comparison of 3CE and PG&E’s E-Elec Rates
PG&E/3CE Comparison Summer
Peak
Summer
Part-Peak
Summer
Off-Peak
Winter
Peak
Winter
Part-Peak
Winter
Off-Peak
PG&E Bundled Generation
Rate ($/kWh) (No PCIA
Charge)
$0.30550 $0.20639 $0.16129 $0.14337 $0.12340 $0.11005
3CE Bundled Generation Rate
($/kWh) (No PCIA Charge) $0.22422 $0.11122 $0.09022 $0.18422 $0.11222 $0.09922 Bundled Generation Rate %
Difference 27% 46% 44% (28%) 9% 10%
PG&E Total Rate ($/kWh) $0.63580 $0.47392 $0.41724 $0.40429 $0.38220 $0.36834 3CE Total Rate ($/kWh) $0.55405 $0.37828 $0.34570 $0.44467 $0.37055 $0.35704 Total Rate % Difference 13% 20% 17% (10%) 3% 3%
5ELEC_SCHEDS_E-TOU-C.pdf (pge.com)
ELEC_SCHEDS_E-ELEC.pdf (pge.com)
Cost-Effectiveness Analysis: Central Coast Community Energy 26 California Energy Codes & Standards | A statewide utility program 2024-03-15
Cost-Effectiveness Analysis: Central Coast Community Energy 27 California Energy Codes & Standards | A statewide utility program 2024-03-15
Cost-Effectiveness Analysis: Central Coast Community Energy 28 California Energy Codes & Standards | A statewide utility program 2024-03-15
Cost-Effectiveness Analysis: Central Coast Community Energy 29 California Energy Codes & Standards | A statewide utility program 2024-03-15
Cost-Effectiveness Analysis: Central Coast Community Energy 30 California Energy Codes & Standards | A statewide utility program 2024-03-15
Cost-Effectiveness Analysis: Central Coast Community Energy 31 California Energy Codes & Standards | A statewide utility program 2024-03-15
7.2.2 SoCalGas – Gas
The SoCalGas monthly gas rate in $/therm applied in this analysis is shown in Table 26. The gas rates were developed based on the latest available gas rate for February 2024 and a curve to reflect how natural gas prices fluctuate with seasonal supply and demand. The seasonal curve was estimated from SoCalGas’s monthly residential tariffs between 2014 and 2023. 12-month curves were created from monthly gas rates for each of the ten years. The ten annual curves were then averaged to arrive at an average normalized annual curve. Long-term historical natural gas rate data was only available for SoCalGas’ procurement charges.6 The baseline and excess transmission charges were found to be consistent over the course of a year and applied for the entire year based on February 2024 rates. The costs presented in Table 26 were then derived by establishing the February baseline and excess rates from the latest 2024 tariff as a reference point, and then using the normalized curve to estimate the cost for the remaining months relative to the February rates.
Table 26: SoCalGas Monthly Gas Rate ($/therm)
Month Total Charge
Baseline Excess
Jan $1.73685 $2.16346
Feb $1.46941 $1.89602
Mar $1.40304 $1.82965
Apr $1.33281 $1.75942
May $1.35857 $1.78518
June $1.40441 $1.83102
July $1.42375 $1.85036
Aug $1.48077 $1.90738
Sept $1.42813 $1.85474
Oct $1.39955 $1.82616
Nov $1.44858 $1.87519
Dec $1.53152 $1.95813
6 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)
Cost-Effectiveness Analysis: Central Coast Community Energy 32 California Energy Codes & Standards | A statewide utility program 2024-03-15
7.2.3 Fuel Escalation Rates
The average annual escalation rates in Table 27 were used in this study. The electricity and natural gas 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 3CE, therefore electricity escalation rates for PG&E and statewide natural gas escalation rates were applied.
Table 28 presents the average annual escalation rates used in the utility rate escalation sensitivity analysis shown in Section 4.4. 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 2053.7 These rates were developed for electricity use statewide (not utilityspecific) 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 27: Real Utility Rate Escalation Rate Assumptions, CPUC En Banc and 2022 TDV Basis 7https://www.energy.ca.gov/files/2025-energy-code-hourly-factors. (California Energy Commission, 2023). Actual escalation factors were provided by consultants E3.
Year
Statewide Natural
Gas Average Rate
(%/year, real)
PG&E Electric
Average Rate
(%/year, real)
2024 4.6% 1.8%
2025 4.6% 1.8%
2026 4.6% 1.8%
2027 4.6% 1.8%
2028 4.6% 1.8%
2029 4.6% 1.8%
2030 4.6% 1.8%
2031 2.0% 0.6%
2032 2.4% 0.6%
2033 2.1% 0.6%
2034 1.9% 0.6%
2035 1.9% 0.6%
2036 1.8% 0.6%
2037 1.7% 0.6%
2038 1.6% 0.6%
2039 2.1% 0.6%
2040 1.6% 0.6%
2041 2.2% 0.6%
2042 2.2% 0.6%
2043 2.3% 0.6%
2044 2.4% 0.6%
2045 2.5% 0.6%
2046 1.5% 0.6%
2047 1.3% 0.6%
2048 1.6% 0.6%
2049 1.3% 0.6%
2050 1.5% 0.6%
2051 1.8% 0.6%
2052 1.8% 0.6%
2053 1.8% 0.6%
Cost-Effectiveness Analysis: Central Coast Community Energy 33 California Energy Codes & Standards | A statewide utility program 2024-03-15 Table 28: Real Utility Rate Escalation Rate Assumptions, 2025 LSC Basis Year
Statewide Natural
Gas Residential
Average Rate
(%/year, real)
Statewide
Electricity
Residential
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%
Cost-Effectiveness Analysis: Central Coast Community Energy 34 California Energy Codes & Standards | A statewide utility program 2024-03-15 Get In Touch
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