Providing market intelligence for more than 35 years


Residential Building Efficiency Standards & Time Development Valuation (TDV)

The California Energy Commission is responsible for ensuring new and existing buildings improve energy efficiency and indoor environmental quality. Title 24, Part 6 covers the specific details regarding all low-rise residential buildings including single-family home new construction, which is the focus of the report. Local agencies enforce and verify compliance to the codes.

Codes are updated every three years to incorporate new technologies and construction techniques that are cost-effective for a homeowner over the expected lifespan (30 years) of the home. Each iteration of the code is designed to save energy, improve indoor comfort and air quality, reduce the need for additional power plants, and reduce greenhouse gases. The code details are specific to the sixteen climate zones in the state.

The 2019 standards went into effect on January 1, 2020. The California Energy Commission estimates the standards will add about $40 to an average monthly 30-year mortgage payment but will save consumers $80 per month on heating, cooling and lighting bills.

Local governments are allowed to have more stringent standards than state codes. However, to implement, the local municipalities must prove their standards will save more energy cost-effectively.

2019 Title 24 Building Standards

The California Energy Commission estimated the 2019 Title 24 building standards would reduce annual electricity usage by 653 gigawatt-hours and natural gas consumption by 9.8 million therms. Its reported that in 2020, these standards were expected to affect 117,000 new single-family homes in the state.

Recently adopted, the new residential standards' primary focus is on updated ventilation requirements and smart residential solar PV systems. Many of the changes attempt to align details with nationally accepted standards or to prescribe requirements for higher efficiency products or installation methods for categories such as solar PV, ventilation, insulation, and lighting.[1]

Mandatory, Prescriptive, and Performance

Building standards can dramatically impact home energy use and are a key element of how California has kept consumption flat. While the standards cover hundreds of details, there are three main categories: mandatory features, prescriptive requirements, and performance options. All parts of the codes are evaluated for cost-effectiveness.  

  • Mandatory features apply to every home built and their associated costs are applicable to the base home. As described, they are not optional.
  • Prescriptive requirements often vary by climate zone, but are specific in how they address a building component. For example, the type and amount of insulation is different by climate zone but still required. These prescriptive standards are proven cost-effective measures for a minimum energy savings via construction techniques or a technology solution. Following the prescriptive requirements is often easier for the builder or trades involved as they essentially follow a set of instructions, but this method offers less flexibility. Unlike mandatory items, there can be more than one choice and either can be chosen as an acceptable solution. 
  • Performance options exist to give builders flexibility and encourage new solutions. Builders can submit alternative design choices for prescriptive requirements. If the building achieves the same overall efficiency as using the prescriptive option, it is likely to be approved and then the performance option may be used.


Each of the construction methods or technologies are measured against the base home by climate zone from the previous standard. For example, the cost to build a home to the 2019 standard is compared with cost to build to the 2016 code, and then the energy savings are included in the evaluation. For example, the 2016 code resulted in an increase of $2,700 to construct the home and saves $7,400 in energy and maintenance costs over 30 years. This translates to an $11 per month increase on a 30-year mortgage with a 5% interest rate. Energy and maintenance savings add up to $31 per month. The net gain to the homeowner was $20 per month.

The entire structure must meet a minimum building efficiency. In the state of California, this is called the home’s energy budget, which is the energy consumption per square foot of floor space. Before construction begins, the home’s design must be modeled through state-approved software. One of the software options is CBECC-Res, a free computer program developed by the California Energy Commission for use in demonstrating compliance with the California Residential Building Energy Efficiency Standards.  

Time Dependent Valuation (TDV) is a key attribute of how the energy budget is calculated. It takes into account supply and demand of energy, including the addition of distributed renewables. This measure is unique to California’s building energy calculations. TDV enables the California Energy Commission to address the needs of the electrical grid to find the best overall solution to the state’s energy needs.

California has practice implementing codes and success in obtaining results. Central to the success is addressing all the stakeholders in the building process from educating architects, construction trades, and local code compliance offices.  

As these measures drive distributed energy generation, the electrical infrastructure is clearly affected. Utility partners must be involved to manage the distribution system to continue providing reliable service.

This is an excerpt from Parks Associates library of research. Thank you for your comments and reading our work. Please visit for more information or contact any members of our team.

Source: 2019 Building Energy Efficiency Standards ZNE Strategy by Mazi Shirakh PE, Christopher Meyer, Bill Pennington, California Energy Commission, April 2017

[1] For details, refer to the California Energy Commission website: /   

If you enjoyed this article, be sure to subscribe to our newsletter on LinkedIn: 

More from Elizabeth Parks

May 16, 2023

Telly: Entering the Market with an “Ads-Pay-for-Hardware” Approach

In today's fast-paced world of streaming and digital content,: providing affordable and engaging con...

Read More

February 15, 2023

Smart Energy Summit Insights from the Industry

Parks Associates hosted its 14th annual Smart Energy Summit this week in Austin, TX bringing the bes...

Read More

March 13, 2023

OTT Video Market Tracker: Insights into the Evolving US Streaming Landscape

Are you interested in learning more about the rapidly evolving OTT video market in the United States...

Read More