In 2025, five states that have historically led on climate action faced legislative setbacks for building energy codes in two main forms: (1) moratoria on code improvements and (2) delays in implementation of building decarbonization laws.
These actions were likely well-intentioned: they aimed to protect affordability by slowing the rise in housing and energy costs. Unfortunately, while appearing to lower costs in the short term, these actions actually undermine consumer protections, precisely because energy codes and decarbonization laws are mechanisms that protect housing and energy affordability.
Without modernized building energy codes, utility bills will become increasingly unaffordable, air pollution will increase, and grid reliability will further deteriorate. Well-written codes and decarbonization laws protect energy and housing affordability. Several states with strong commitments to mitigating climate change have historically refined and improved the design and implementation of building codes and climate laws, setting examples for other states to follow.
Actions in Leading States
California: On June 30, 2025, Governor Gavin Newsom signed Assembly Bill 130 (AB 130). The bill blocks revisions to the residential energy code until 2031, forcing agencies to skip a required 2028 update. This bill will prevent energy codes from keeping pace with new technologies that enter the market, which may drive up costs for new homeowners and impede market adoption of more efficient building envelopes and appliances, especially heat pumps.
AB130 also, surprisingly, bans California cities from passing their own “reach codes” while the state’s code is paused. This ban caused many cities, including San Francisco, to rush through energy code updates before the October 1, 2025, deadline, leaving less time for code language review and for providing advance notice to the market.
These decisions were in part a response to the tragic wildfires in the Pacific Palisades and Eaton Canyon in January 2025. While the aim was to accelerate the construction of much-needed housing, a surprising impact is that energy codes could be weakened or paused in response to a climate disaster, even though they improve energy resilience and passive survivability. Though removing code elements may appear to address short-term affordability, such a move risks damage to long-term public safety, homeowner’s insurance affordability, and community resilience.
Delaware: Another unexpected decision came on October 27, 2025, when the Secretary of Delaware’s Department of Natural Resources and Environmental Control (DNREC) published a letter declining to approve the state-amended version of the 2024 IECC. This decision means that the DNREC is now out of compliance with a state law, “that new residential building construction in Delaware shall be zero net energy capable by December 31, 2025.” That law has been in place for 16 years.
Affordability and market preparedness, especially among homebuilders, were cited as reasons to justify this decision. The DNREC Secretary’s letter states, “At this point the homebuilding industry lacks the training and the technical expertise to take the dramatic jump to net zero construction without the benefit of years of preparation contemplated by the legislature.” Notably, the code would not require full net zero construction, but only net zero energy capable construction.
Delaware is poised to take up a request to revise the 2009 law and potentially remove the goal of net zero energy capable homes, which would be a further setback for climate change mitigation, energy affordability, and grid reliability in the state. There is also a risk that backpedaling may be taken advantage of by special interest groups to weaken or downgrade the energy code to an older version. Until the October decision, this capable-only provision was viewed by many advocates as too weak for the state’s climate goals. There was hope for a full net zero code by 2030, but that is now also in question. Despite the setback, DNREC attested to widespread industry support for the model 2024 IECC as a way to protect consumer energy affordability.
Hawaii: On September 23, 2025, Governor Josh Green signed the 15th Emergency Proclamation Relating to Affordable Housing, suspending the State Building Code Council’s authority to update or amend state building codes. Governor Green cited the rising costs of construction materials and labor, as well as the financial viability of affordable housing. Hawaii has the highest median new home price in the nation, and, like California’s AB 130, this change was made in part in response to the tragic wildfires of August 2023 and to the desire to allow communities to rebuild as quickly and affordably as possible. However, affordability does not need to conflict with energy efficiency and climate resilience in building codes. Unlike in California, Hawaii’s legislation did not remove local jurisdictions’ ability to amend their local codes while the State Code Council is suspended.
New York: Until recently, New York was positioned to be the first state in the nation to require all new residential and commercial construction to be all-electric. New York’s 2019 Climate Leadership and Community Protection Act (CLCPA) was pivotal, leading to the 2023 passage of the All-Electric Buildings Act (AEBA). The AEBA would eliminate on-site emissions. Because on-site emissions in residential and commercial buildings account for a higher percentage of total emissions in New York than in most states, electrifying building operational energy use would have an outsized impact on New York’s air quality and emissions.
The AEBA was set to go into effect on January 1, 2026. However, in November 2025, New York abruptly paused enforcement of the AEBA due to a pending lawsuit, which may take years to resolve.
Governor Hochul called off the AEBA after receiving a letter from 19 state legislators portraying it as a major threat to grid reliability. The letter cited a New York Independent System Operator (NYISO) report that the legislators characterized as demonstrating that a grid failure would be likely by 2034 if all new construction were electrified. Governor Hochul responded publicly after the AEBA delay, claiming the indefinite delay was necessary and that she must “govern in reality.”
A closer look at the cited NYISO report calls into question some of the fear around the AEBA and its impact on the grid. The NYISO report indicates that several other factors will have greater impacts on the New York grid. The largest threat to grid reliability, according to the report, is the sheer quantity of ‘large load’ connections requesting interconnection. These include data centers, advanced manufacturing facilities, and other industrial-scale electricity users. The report also shows several other near-term changes with potentially larger impacts on the grid, including fleet electrification and EVs, retiring power plants, and undercounting upcoming solar and wind additions. Uncertainties around a transmission line connection to hydro power in Quebec are an even greater grid reliability concern than electrifying commercial and residential buildings.
Some opponents have wrongly portrayed the AEBA as a law requiring all buildings in the state—new and existing—to be electrified within the next decade. The AEBA only regulates fossil fuel combustion in new construction and includes exceptions for harder-to-electrify building types, such as hospitals.
Governor Hochul’s office publicly stated that “The Governor remains committed to the all-electric-buildings law and believes this action will help the State defend it, as well as reduce regulatory uncertainty for developers during this period of litigation.”
Vermont: On September 17, 2025, Governor Phil Scott signed Executive Order 06-25 “Promoting Housing Construction and Rehabilitation.” The executive order rolls back Vermont’s 2024 code and reinstates the 2020 Residential Building Energy Standards (RBES) and Commercial Building Energy Standards (CBES), allowing new construction projects to comply with either the older or the newer standard. It allows builders to comply with the state-amended 2018 version of the IECC instead of the 2024 version. The Executive Order cites a housing-unit deficit of over 5,000, as reported in a Vermont Housing Needs Assessment. Rolling back the state’s energy code to a nearly decade-old standard will not boost housing supply. There is little correlation between the version of energy codes enforced and the number of houses built in any given municipality. While Vermont’s rollback could make construction easier for builders who have become familiar with the 2018 version of the IECC over the years, it is unlikely that the change will noticeably lower construction costs in a way that is passed on to consumers and lowers housing prices. Much more likely, the rollback will result in a measurable increase in utility bills, maintenance costs, and potentially insurance rates for future owners of those homes and businesses.
Energy Codes Improve Affordability
It is unfortunate that advanced energy codes and electrification policies are suddenly being challenged in leading states, even though these are among the most important tools for protecting energy and housing affordability and energy resilience in the long run.
While the intent is good, it seems that attention is being misdirected to building codes. In fact, in many of the code rollbacks seen in 2025, building codes have been conflated with other local regulations that are stronger barriers to affordable housing.
For instance, in many cities across the country, a main driver of housing costs is outdated zoning codes—not building codes, energy codes, or climate laws that successfully strengthen the grid and future affordability.
Many cities have zoned out affordability, with zoning codes and local land-use policies that allow only large, single-family homes on suburban lots, effectively rendering apartments and starter homes illegal. More attention is being paid to these problems in zoning codes by lawmakers, as in Arizona, with HB2721, in effect as of January 1, 2026, and in Congress, with the bipartisan 21st Century ROAD to Housing Act proposed in early 2026, which seeks to increase housing supply by promoting better zoning regulations. In addition to attempts at zoning reform, the 21st Century ROAD to Housing Act also contains measures that would weaken building and energy codes. Removing these energy regulations would likely have a limited impact on housing supply but could harm energy affordability. A bill focusing on housing and energy affordability should promote the most up-to-date energy codes available. Surveying the many legislative and executive actions in 2025 and 2026, one thing is clear: scapegoating energy codes will not help solve our affordability problems. In fact, such actions will most likely result in the opposite: higher utility bills, increased maintenance costs, and growing insurability issues for decades to come.
Author
by Kevin Berry, project manager