Washington's Clean Buildings Performance Standard has reached its first hard deadline: Tier 1 buildings over 220,000 square feet were due June 1, 2026. Domestic hot water is one load an owner can change within a single capital cycle without touching the envelope or the air side. At the assumptions used below, a heat pump water heater cuts site energy for that load by roughly two-thirds against a gas heater; thermal storage lets the heat pump be sized toward average load rather than peak recovery. That electrical capacity difference can keep the project off a service upgrade.
The next two Tier 1 cohorts follow on June 1, 2027 and June 1, 2028. Tier 2, which includes every multifamily building over 20,000 square feet, reports on July 1, 2027. The Department of Commerce counts about 27,600 covered buildings; as of September 30, 2025, fewer than 400 had an approved compliance or exemption on file.
Domestic hot water is not the largest load in most of those buildings. A heat pump water heater with thermal storage addresses site energy, mechanical-room access where a welded tank cannot fit, and electrical service capacity. This article identifies where that measure sits in the Washington CBPS framework. The general retrofit method is covered in how to electrify domestic hot water in existing multifamily buildings.
Tier 1 offers four energy performance pathways within a site-energy framework. Tier 2 requires benchmarking, an energy management plan and an operations and maintenance program, but no performance target yet. Water heating electrification lowers site energy use intensity, or EUI, because a heat pump delivers more thermal energy than the electrical energy it draws. Storage determines whether the heat pump can be small enough to fit the existing service.
Separately, for new construction and permitted work under Washington's commercial energy code, the code requires an air-source heat pump water heating system, subject to exceptions, with storage sufficient for peak demand. That requirement does not govern an existing building's CBPS compliance.
Key Takeaways
In this article
Who is covered and when
The Clean Buildings Performance Standard applies in two tiers. Commerce defines Tier 1 as buildings over 50,000 square feet and reports three cohorts by gross floor area: more than 220,000 square feet; more than 90,000 and up to 220,000 square feet; and more than 50,000 and up to 90,000 square feet.
Tier 2 covers nonresidential, hotel, motel and dormitory floor area of more than 20,000 and up to 50,000 square feet, and all multifamily residential buildings over 20,000 square feet. Parking garage area is excluded in both tiers. Federal buildings and buildings owned by federally recognized tribes are not covered.
The June 2026 Report to the Legislature puts the covered stock at 27,622 buildings. Commerce had received 510 cumulative applications as of September 30, 2025, about 80 percent of them Tier 1. Cohort counts, compliance status and the published calendar are listed below.
Commerce is reviewing Tier 1 applications in order received and prioritizing the largest buildings. Owners may request extensions within six months before or after a deadline, but the extension application window opens only once the new extension rules are codified. Tier 1 buildings with an approved extension within six months of the deadline are not penalized if they comply within the extension period.
Commerce released a 2026 edition of the CBPS Integrated Document on August 27, 2026. Extension rules were still being codified at the time of research. Confirm deadlines, thresholds, penalties and incentive figures against Commerce's current documents before relying on them.
What compliance requires
Both tiers start with three obligations: benchmark the building in ENERGY STAR Portfolio Manager, implement an energy management plan, and implement an operations and maintenance program. Utilities must provide consumption data on request.
The completed plan and program reporting tools attach to the compliance application. Commerce states that implementation of both can begin at any time before applying.
Tier 1 adds an energy performance requirement, satisfied through one of the four pathways listed below from the Commerce Tier 1 page.
Conditional compliance delays verification of the EUI target or Investment Criteria result. It is available only when all measures are implemented and only verification time remains. The application must be submitted at least 180 days before the compliance date, with annual reporting until full compliance is shown.
Tier 2 adds a qualified energy manager and an EUI target developed with Commerce's Form B or the CBPS 019 pre-calculator, or ENERGY STAR's national median site EUI where a target cannot be developed. Commerce's Tier 2 page states that Tier 2 buildings are not required to meet a performance target at this time.
Exemptions apply per building, for criteria such as no certificate of occupancy, unconditioned space, certain industrial or agricultural uses, demolition, financial hardship or national security affecting more than 50 percent of the square footage. Applications must be submitted between two years and six months before the compliance date.
For Tier 1, Commerce must assess administrative penalties where there is no approved compliance or exemption application and no extension. The maximum is $5,000 plus $1.50 per square foot of gross floor area, and owners may pay in lieu of compliance. For Tier 2, penalties for failing to submit documentation cannot exceed $0.30 per square foot.
Where domestic hot water sits in the framework
The standard measures site energy. A gas water heater converts fuel to hot water at its thermal efficiency: at an assumed 80 percent efficiency, it burns 1.25 units of site energy for each unit of delivered hot water. A heat pump water heater moves heat from the air into the water: at an assumed coefficient of performance, or COP, of 2.5, it draws 0.40 units of site electricity for each unit of delivered hot water.
Both figures are assumptions chosen to show the structure. The gas figure is the minimum thermal efficiency for a commercial gas storage water heater manufactured before October 6, 2026. The COP must come from the selected equipment's performance data at the building's entering water and ambient temperatures.
The worked comparison below uses assumed loads, temperatures, efficiency, COP and floor area. Every calculated site-energy figure is an illustrative result of those assumptions, not a measured building result.
Thermal kWh and electrical kWh are different quantities. In the assumed example, 410.6 kWh thermal per day is the heat delivered to the water; 164.2 kWh electrical per day is what the meter records at COP 2.5. At an assumed COP of 2.0, electrical consumption is 205.3 kWh per day and the site energy reduction is 60 percent. At an assumed COP of 3.0, electrical consumption is 136.9 kWh per day and the site energy reduction is 73 percent.
Whether the assumed reduction of 3.9 kBtu per square foot per year closes the gap to a Tier 1 EUI target depends on the building's starting point. The first step is the Portfolio Manager benchmark Commerce requires.
Under Minimum Energy Use Reduction, the measure contributes directly to the 15 percent weather-normalized reduction. Under Investment Criteria, it enters the ASHRAE Level 2 audit as a measure with a calculated simple payback. Commerce describes Space Heating Electrification in terms of space conditioning equipment; water heating is not treated here as qualifying under that pathway.
Why storage decides whether the heat pump fits
The number that stops water heating electrification in an existing building is rarely the COP. It is the peak. A gas storage water heater recovers at the burner's full input; a heat pump water heater sized to match that recovery rate needs an electrical feed many existing services cannot provide.
Storage separates peak delivery from heat pump recovery. If the tank carries the three-hour morning peak, the heat pump can be sized toward the average load across a 16-hour recovery window rather than the peak hour. The calculations below use the same assumed 120-apartment building.
The peak fraction, recovery window and COP are assumptions. The method for replacing them with the building's draw profile is in how to size thermal storage tanks for peak hot water demand. The central heat pump water heater multifamily guide covers the single-pass versus multi-pass selection that follows from the storage temperature.
In Washington, a 10 kW electrical connection is a different conversation with the serving utility than a 23 kW connection. The Tier 2 July 1, 2027 reporting date leaves little room for a service upgrade.
The TEHQ specification sheet for a 700-gallon module lists heat loss of 2.4 F per 24 hours. At that listed heat loss, storage holds its charge across the daily cycle, which makes the smaller heat pump possible. Product information is available in the Thermal Tank overview; this article makes no determination that a TEHQ product satisfies a code or standard.
The new-construction code already points the same way
Washington's commercial energy code established the hot water requirement for new buildings before CBPS reached its first deadline. Section C404.2.1 of the Washington State Energy Code, as amended effective March 15, 2024, states that service hot water shall be provided by an electric air-source heat pump water heating system. This commercial-code requirement is separate from existing-building CBPS compliance.
The section carries seven exceptions. These include an allowance of 24 kW plus 0.1 watts per square foot of building area of electric resistance service water heating per building; offsets for solar thermal, waste heat recovery and ground source systems; systems meeting the NEEA Advanced Water Heating Specification; pre-existing district energy; booster heaters for dishwashers and process equipment at 120 F or higher; low-carbon district energy; and essential facilities with redundant backup.
The sizing and storage provisions below govern new construction and permitted work under the commercial code. They do not apply to an existing building's CBPS compliance.
For a CBPS project, these provisions describe a system architecture Washington plan reviewers and contractors already know, rather than an additional CBPS requirement. The referenced NEEA Advanced Water Heating Specification, hosted on the DOE Building America Solution Center, defines the same primary-storage, temperature-maintenance and controls structure.
Incentives and sequencing
The legislative report lists $284.5 million in CBPS incentive funding across four programs: a $75 million Tier 1 Early Adopter Incentive; a $150 million Tier 2 Early Adopter Incentive paying $0.30 per square foot for compliance; Clean Buildings Performance Grants, with $45 million for 2023 to 2025 fully allocated and $5 million for 2025 to 2027; and energy audit funding for public buildings.
The report states that demand for performance grants was twice the available funding and that less than 1 percent of the Tier 2 incentive had been allocated as of the report date.
Three sequencing rules apply to a hot water project inside a CBPS plan. For broader project context, see the commercial decarbonization guide.
Nothing here determines eligibility for an incentive or interprets the standard for a specific building. Commerce, the qualified energy manager and the engineer of record make those calls.
Frequently Asked Questions
When is my Washington multifamily building due under CBPS?
Multifamily buildings over 20,000 gross square feet, excluding parking, are Tier 2 and report on July 1, 2027, then every five years. A multifamily building is not in Tier 1 regardless of size; Commerce places all multifamily over 20,000 square feet in Tier 2.
Does Tier 2 require meeting an EUI target?
Not now. Commerce's Tier 2 page states that Tier 2 covered buildings are not required to meet a performance target at this time. Tier 2 requires benchmarking, an energy management plan, an operations and maintenance program, a qualified energy manager and a developed EUI target or the ENERGY STAR national median.
What is the penalty for missing a CBPS deadline?
Tier 1: up to $5,000 plus $1.50 per square foot of gross floor area, assessed after a notice of violation and opportunity to correct. Tier 2: not more than $0.30 per square foot for failing to submit documentation. Owners may pay Tier 1 penalties in lieu of compliance.
Does electrifying water heating count under the Space Heating Electrification pathway?
Commerce describes that pathway as replacing fossil fuel space conditioning equipment with electric heat pumps. Water heating electrification is counted through the EUI target, Minimum Energy Use Reduction or Investment Criteria pathways, where its site-energy effect is measured directly.
How much does a heat pump water heater reduce site EUI?
In the worked example, a 120-apartment building at an assumed 20 gallons per apartment per day and a 70 F rise moves from a calculated 639 million Btu per year with a gas heater at an assumed 80 percent thermal efficiency to 204 million Btu per year with a heat pump at an assumed COP of 2.5. Under those assumptions, the reduction is 68 percent of the hot water portion of site energy, or about 3.9 kBtu per square foot per year on an assumed 110,000 square feet. Replace every assumption with the building's data.
Why does thermal storage matter for CBPS compliance?
Storage lets the heat pump be sized toward average load rather than peak recovery. In the assumed worked example, that is 10.3 kW electrical instead of 23.3 kW at an assumed COP of 2.5. That capacity difference can determine whether the project uses the existing service or requires an upgrade before the compliance date.
Does the Washington energy code require heat pump water heaters?
For new construction and permitted work under the commercial code, Section C404.2.1, as amended March 15, 2024, requires an electric air-source heat pump water heating system, subject to seven exceptions. Storage must be sized for the peak demand period, with primary capacity of at least 50 percent of peak at 40 F and 25 percent at 24 F. It does not govern existing buildings under CBPS.
Where do I find the EUI targets?
In Table 7-2a of the Clean Buildings Performance Standard, which Commerce describes as site-based averages for similar building types. This article does not reproduce them.
The bottom line
Washington's standard is live, it is site-based, and the first penalties are no longer hypothetical. Domestic hot water is a load an owner can move within a single capital cycle: under the worked example's assumptions, including COP 2.5 and 80 percent gas thermal efficiency, a heat pump water heater cuts the hot water share of site energy by roughly two-thirds.
Thermal storage lets the heat pump be sized toward average load rather than peak recovery. That can make the electrical load small enough to fit the existing service before the Tier 2 reporting deadline in July 2027 or a Tier 1 deadline in 2027 or 2028.
Separately, Washington's commercial energy code already specifies that heat-pump-and-storage architecture for new construction and permitted work, subject to exceptions. It does not establish the requirements for existing-building CBPS compliance.
Benchmark first, put the measure in the audit, check the utility program before buying, and confirm every figure against the building's data and Commerce's current documents.
