As climate challenges continue to mount, California’s leaders have an obligation to keep pushing for safer, healthier, and more affordable communities in 2025. Millions of Californians, particularly those in low-income and environmental justice communities, are grappling with the impacts of burning fossil fuels––including rising energy costs, extreme heat events, and harmful air pollution, as well as climate disasters like the devastating Los Angeles wildfires.
In the age of a new federal administration, the state’s resolve to tackle the intersection of climate change, public health, and energy equity through building decarbonization has never been more critical. Building decarbonization aims to protect public health and advance energy affordability and climate resilience by upgrading our homes and neighborhoods to run on clean energy and pollution-free heat pumps. It’s a direct pathway to creating healthier and safer communities and has been shown as the most cost effective option to meet our state’s climate goals. Here’s how state leaders can advance building decarbonization to benefit Californians and accelerate a just and clean energy transition:
1. Adopt legislation to speed heat pump installation
The clean energy transition is gaining momentum, and Californians are increasingly looking to retrofit their homes with clean, pollution-free appliances to cool and heat their homes and water. There is a steadily growing demand for heat pumps amongst consumers, with installations far outpacing those of new gas counterparts in 2024. However, the process is often slowed by complex local permitting requirements that add money, time, and hassle to clean appliance retrofits. These inconsistent installation requirements across hundreds of jurisdictions, in addition to long inspection times, varying permit types, and plan checks, make the process even clunkier, especially for contractors who navigate most of the hurdles.
SB 282, the Heat Pump Access Act, authored by Senator Scott Wiener, will standardize the heat pump permitting process to make it faster, easier, and more affordable for homeowners and contractors. The bill––which is co-sponsored by the BDC, San Francisco Bay Area Planning and Urban Research Association (SPUR), and Bay Area Air District––proposes streamlining the process across municipalities in the state, creating a self-certification pathway for contractors, capping permit fees, and requiring a maximum of one permit for heat pump installations. Passing this well-rounded reform of the permitting process would speed installations, bring down costs for homeowners, support California’s contractors, and help drive heat pump adoption to meet our state climate and heat pump goals.
2. Approve healthy statewide air standards
The California Air Resources Board (CARB) has taken notable measures in recent years to accelerate the state’s clean energy future. CARB is expected to introduce a rule this year to implement point of sale rules that, once approved, will go into effect in 2030 to ensure that modern, electric appliances replace their inefficient gas counterparts upon burnout. These rules will act as a market signal to accelerate the production of clean electric appliances like heat pumps and upskill the workforce for the clean energy transition. And the transition to highly efficient electric appliances like heat pumps will help households stabilize their utility bills and support energy affordability.
Local air districts have also begun to implement and move towards zero-NOx space and water heating rules. Bay Area Air District adopted a point of sale rule with zero-NOx requirements for residential space and water heating starting in 2027, and the South Coast Air Quality Management District (SCAQMD) will vote on similar rules for residential appliances later this year, following passage of the commercial ruling in 2024. Together these districts’ rules to encourage the sale of heat pumps for space and water heating would cover about 25 million Californians, or nearly 65% of the state’s population.
3. Accelerate neighborhood-scale building decarbonization
The state has ambitious goals to install 6 million heat pumps by 2030 and reach carbon neutrality by 2045. This leaves just five years to deploy over 4 million heat pumps, which will require quadrupling the current rate of installation. Large-scale solutions and regulatory frameworks are urgently needed to hit these targets—and that’s where neighborhood-scale decarbonization comes in.
Neighborhood decarbonization, or the process of transitioning street segments, developments, or even entire neighborhoods to decarbonized energy sources and electric appliances, is an innovative solution that creates safer, healthier homes while lowering energy bills, increasing climate-resilience, and cleaning the air. It speeds the clean energy transition because of its scale and creates opportunities for skilled labor that provides livable wages and lifelong careers.
SB 1221 (Min), which was signed into law last year, will pave the way for responsible utility investments and long-term energy affordability for Californians with priority for low-income and frontline communities. The bill enables utilities to shift away from expensive investments in aging natural gas pipelines toward more cost-effective, community-scale clean energy pilot projects.
In January, Governor Newsom included $1.7 million in his proposed budget for the implementation of SB 1221, though the pilot projects will not break ground until after 2026. However, the groundwork is already underway—mapping is due by July of 2025, and the funds will be used to add staff to the CPUC, enabling them to begin administration and develop a regulatory framework to evaluate pilot applications.
The pilot projects will offer California and other states a model for large-scale decarbonization. Other states have already passed similar bills, including Colorado, Washington, and New York, and there are small-scale pilots underway in California cities like San Jose and Richmond. Additionally, current neighborhood decarbonization projects such as Oakland’s Ecoblock and the Zonal Electrification Equity Pilot (ZEEP) are underway. As Los Angeles rebuilds after the devastating wildfires, neighborhood decarbonization is a potential solution for creating more resilient, energy-efficient neighborhoods that enhance safety, grid stability, and air quality.
4. Steadily fund equitable building decarbonization
While California has made progress in decarbonizing buildings, consistent and ample funding is needed to make meaningful, long-term changes. Programs like the Equitable Building Decarbonization (EBD) Program demonstrate how targeted investments can directly benefit low-income and frontline communities who are most vulnerable to adverse climate impacts like extreme heat. With $500 million secured in the state’s budget, the EBD Program will expand access to weatherization, pollution-free appliances like heat pumps, and other home upgrades that improve energy efficiency, equity, and climate resilience. The program takes a whole-home approach, addressing health, safety, and energy efficiency while modeling strong tenant protections to ensure positive outcomes for all program participants. Maintaining robust, ongoing funding for large direct install programs will be key to establish long-term energy affordability and emissions reductions.
California was one of the first states to distribute federal funding from the Inflation Reduction Act (IRA) for the Home Electrification and Appliance Rebates (HEEHRA)—allocating $80 million for low- and moderate-income households to upgrade their homes with modern electric appliances like heat pumps for space and water heating. The state’s award-winning heat pump initiative, TECH Clean California, rolled out these incentives for single and multifamily households.
Without sustained investments in these programs and incentives, California risks leaving behind the very communities that would benefit most from the clean energy transition. Consistent funding ensures that the state can continue to scale its equitable building decarbonization initiatives and lead by example.
5. Boost market momentum
The state’s first public-private partnership to drive heat pump adoption, the California Heat Pump Partnership (CAHPP), launched last year in a massive leap for the state’s climate and heat pump goals. This new groundbreaking alliance brings together state leadership, manufacturers, utilities, retailers, distributors, and other market actors in the supply chain to accelerate the heat pump market. This year, the CAHPP will launch its statewide marketing campaign and publish a blueprint outlining strategies to address technical, market, and policy barriers. This partnership can serve as a model for other states to align diverse stakeholders to confront their specific barriers and accelerate statewide heat pump adoption.
The combination of strong legislation, incentives and rebates, and regulatory frameworks will create industry readiness for building decarbonization—and the ability to meet market demand is necessary for a smooth transition to a clean energy future.
A path forward
A just transition to a clean energy future is possible—and California is taking steps in the right direction thanks to the tireless work of state leaders, environmental justice groups, environmental organizations, manufacturers, energy providers, and local governments. As the world’s fifth largest economy and as home to over 39 million people, California has an immense role to play on the national stage alongside other states leading on climate change. Even as the state faces challenges under the new federal administration, we must forge ahead to push forward on building decarbonization to protect the health and safety of our communities.
In the wake of extreme adversity, our state now also has the unique opportunity to model how we build back safer, healthier homes after climate disasters. This means speeding the process by which Californians can rebuild safely, but fast-tracking ways of building back cost-effectively while increasing climate resilience and maximizing public health and safety. By creating one clean energy neighborhood at a time, our state can gradually and equitably scale the homes and communities we need now and for the future.