AB 368 directs the California Energy Commission (CEC) to do a systematic evaluation of passive house energy standards so legislators and regulators have evidence to decide whether and how those standards should influence Title 24 building rules. The bill focuses the study on cost-effectiveness and modeling, then requires the CEC to deliver findings and recommendations to the Legislature.
For compliance officers, builders, and energy modelers, the practical effect is a funded, legislatively mandated technical review that could inform future updates to California's building energy code (Part 6 of Title 24). The bill does not itself change code; it creates a structured analytical step intended to surface where passive house strategies are economically viable and where they are not.
At a Glance
What It Does
The bill requires the Energy Commission to evaluate the cost‑effectiveness of passive house energy standards across California’s climate zones using metrics the commission adopts (explicitly listing long‑term system cost as an example). It also requires the commission to assess the two passive house energy models the state currently requires for certification and to compare passive house construction to the baseline construction regulated under Part 6 of Title 24.
Who It Affects
Primary targets are the Energy Commission (which must conduct the study), energy modelers and certifiers who use the state‑required passive house models, and stakeholders in the Title 24 rulemaking process including builders, code consultants, and state policy staff who would use the report to inform any future code changes.
Why It Matters
The analysis could alter the technical and economic basis for future Title 24 updates by producing climate‑zone‑specific evidence about passive house approaches. That matters for companies that design and construct high‑performance buildings and for agencies weighing whether to adopt stricter envelope and ventilation requirements.
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What This Bill Actually Does
AB 368 instructs the California Energy Commission to carry out a focused, evidence‑based evaluation of passive house energy practices so the Legislature and regulators have a factual foundation for decisions about building standards. The bill narrows the evaluation to economic effectiveness — not just energy savings — and asks the commission to use internally adopted metrics that can include lifecycle or long‑term system costs rather than only up‑front capital figures.
The commission must include the two passive house energy models that the state currently requires for certification in its analysis. That means the study must treat those models as the functional representation of passive house performance and test their outputs against the state’s baseline compliance pathways under Part 6 of Title 24.
The comparison is about cost‑effectiveness: whether building to passive house standards yields net economic benefits compared to the construction methods already permitted under the code.The bill ties the evaluation to existing statutory cost‑effectiveness procedures by requiring compliance with a specific paragraph of Section 25402, so the commission must follow established analytic constraints and stakeholder processes embedded in statute. Finally, the commission must document findings and recommendations in a formal report for the Legislature, filed in the statutorily required format.
While AB 368 does not itself alter Title 24, the report is positioned to influence future regulatory choices by making climate‑zone distinctions and modeling assumptions explicit.For implementers, the work will demand clear data inputs, transparency about modeling assumptions, and careful framing of metrics (for example, which costs get counted over what period). The study’s design choices — which metrics, how to handle model discrepancies, and how to align passive house outputs with Title 24 baselines — will shape whether the results show passive house approaches to be broadly cost‑effective, cost‑effective only in certain climates, or not cost‑effective under the applied methods.
The Five Things You Need to Know
The commission must evaluate cost‑effectiveness by California climate zone rather than at a single statewide level.
The study must incorporate the two passive house energy models that the state currently requires for passive house certification as part of its analysis.
The commission must compare passive house construction’s cost‑effectiveness to existing construction regulated under Part 6 (Title 24) of the California Code of Regulations.
The commission’s evaluation must comply with the procedural and analytic constraints referenced in paragraph (3) of subdivision (b) of Section 25402.
The bill requires the commission to submit a report documenting findings and recommendations to the Legislature, and the reporting requirement expires on January 1, 2032.
Section-by-Section Breakdown
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Mandate to assess cost‑effectiveness by climate zone
This subsection requires the Energy Commission to evaluate passive house energy standards' cost‑effectiveness on a climate‑zone basis and to use metrics the commission adopts, explicitly citing long‑term system cost as an example. Practically, the commission must segment analysis geographically so that results reflect California’s diverse climates rather than producing a single statewide average; that will affect sample selection, load modeling, and economic inputs.
Modeling requirement and Title 24 comparison
The commission must include the two passive house energy models the state currently requires for certification in its analysis and directly compare passive house construction to the baseline construction under Part 6 of Title 24. This subsection forces the study to treat state‑accepted passive house modeling approaches as primary evidence and to map those outputs to the code baseline used for compliance and cost comparisons.
Procedural conformity with Section 25402
The bill requires the evaluation to comply with paragraph (3) of subdivision (b) of Section 25402. That cross‑reference binds the study to existing statutory rules governing how the commission conducts cost‑effectiveness evaluations — for example, established analytic methods, stakeholder engagement, or documentation standards embedded in Section 25402 — so the commission cannot adopt a wholly novel analytic framework without addressing those statutory constraints.
Reporting deadline and statutory sunset for the requirement
This subsection sets the administrative deliverables: the commission must submit a report to the Legislature documenting findings and recommendations and must do so in compliance with the cited Government Code reporting requirement. The statute also makes the reporting obligation inoperative on January 1, 2032, which limits the period during which the Legislature can compel this specific study under this authority.
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Explore Energy in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Policymakers and regulators — receive a climate‑zone‑specific evidence base to inform future Title 24 updates, reducing uncertainty when deciding whether to adopt passive house elements.
- High‑performance builders and designers — gain authoritative analysis that could justify premium investments in envelope, ventilation, and passive measures in the climates where they prove cost‑effective.
- Energy modelers and certifiers — see increased demand for validated modeling work and clearer expectations about which models and assumptions the state will weigh.
Who Bears the Cost
- California Energy Commission — must allocate staff time, contract resources, and modeling work to design and complete the evaluation within the statutory framework.
- Small and mid‑size builders and developers — may face compliance costs if the report leads to stricter code requirements in some climate zones, or may need to invest in learning and new workflows to meet passive strategies.
- Local code enforcement and design consultants — will need to interpret the report’s recommendations and potentially update permitting guidance, trainings, and plan‑review procedures.
Key Issues
The Core Tension
The central tension is between two legitimate objectives: producing a rigorous, conservative cost‑effectiveness test that protects ratepayers from expensive measures with marginal net benefit, and designing an analysis that captures long‑term and non‑energy benefits that might justify higher up‑front costs. The bill forces a choice of metrics and methods that will determine whether passive house approaches are treated as costly or worthwhile, and reasonable analysts can disagree about the right balance.
The bill sets out an analytic assignment but leaves multiple high‑stakes design choices to the commission: which specific metrics beyond 'long‑term system cost' will be adopted, how to discount future benefits, and how to treat non‑energy benefits (health, resilience) in cost tests. Those choices will materially change whether passive house approaches appear cost‑effective, and stakeholders can reasonably expect to lobby heavily over metric selection and parameter values.
Another open question is how the commission will reconcile discrepancies between the two passive house models it must evaluate. Different models can yield materially different load and savings estimates because they treat airtightness, solar gains, and ventilation differently.
The statute requires inclusion of both models but does not prescribe a reconciliation method, leaving room for methodological disputes. Finally, the statutory cross‑reference to Section 25402’s procedures constrains the study but also introduces procedural complexity: complying with those statutory requirements could lengthen the study or limit novel analytic choices, and the January 1, 2032 inoperative date means this is a time‑bounded exercise rather than a permanent new reporting duty.
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