For Immediate Release
December 22, 2025
Media Contact:
Robin Tung, robin@buildingdecarb.org
California Greenlights New Pilot to Expand Access to Heat Pumps
California utility commissioners vote to approve Southern California Edison’s groundbreaking pilot, a major step toward making clean energy upgrades accessible for millions of Californians.
Sacramento, CA – The California Public Utilities Commission (CPUC) approved a Proposed Decision authorizing Southern California Edison’s pilot for a groundbreaking program designed to make clean energy upgrades such as zero-emission heat pumps more affordable and accessible for Californians. The Commission’s vote advances exploration of Tariffed On-Bill (TOB) programs, also known as Inclusive Utility Investment, which recovers the cost of efficient electric appliances through a utility-bill charge that is attached to the site, not the occupant. This improves accessibility to clean energy technologies and ties the investment to the property where the appliance is installed.
SCE’s pilot will launch in 2026 and represents a milestone towards helping renters, low- and moderate-income households, as well as customers who have difficulty accessing traditional loans, participate in California’s clean energy transition. The pilots will include about 200 residential customers and, scaled to a statewide program, can benefit an estimated 6 million Californians.
“We applaud the Commission for launching this pilot to help put affordable, all-electric upgrades within reach for the Californians who need them most,” said Beckie Menten, California Director at the Building Decarbonization Coalition. “The tariffed On-Bill model removes the barrier of upfront costs and expands access for renters and low- and moderate-income households, delivering efficient heat pumps and real bill savings. This is meaningful progress toward an equitable, all-electric California.”
Tariffed On-Bill programs treat the cost of a new electric appliance as a utility investment, helping customers with the upfront cost of installing an appliance while avoiding high interest rate financing and unsecured debt. This allows customers to add a charge to their monthly utility bill to cover installation over time.To keep bills affordable, programs must cap monthly charges below expected energy savings and include strong consumer protections. Because the charge is attached to the utility account and not the occupant, it can transfer from one resident to the next, making the model especially useful for renters who may not stay at the property for the lifetime of the appliance. This structure also expands access for customers who aren’t able to qualify for traditional financing or who need lower-cost alternatives.
Under the Proposed Decision, SCE will develop the two-year pilot for a planned launch in 2026. The utility must report on customer participation, cost-recovery performance, and data accuracy to generate insights that can guide and accelerate the development of a statewide TOB program. Other California utilities are directed to monitor SCE’s pilot and use its findings to strengthen future proposals, positioning California to scale TOB as a significant affordability tool in the clean energy transition.
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The Building Decarbonization Coalition (BDC) aligns critical stakeholders on a path to transform the nation’s buildings through clean energy, using policy, research, market development, and public engagement. The BDC and its members are charting the course to eliminate fossil fuels in buildings to improve people’s health, cut climate and air pollution, prioritize high-road jobs, and ensure that our communities are more resilient to the impacts of climate change. Learn more at www.buildingdecarb.org.