What it costs, what's permitted, and what to ask before you hire.
Last verified: 2026-05-31 · Well-sourced
Incentive snapshot
Section 25C Energy Efficient Home Improvement Credit (heat pumps)
Expired Dec 31, 2025. For 2023–2025: up to $2,000/yr (30% of project cost, capped) for qualifying heat pumps and heat pump water heaters. EXPIRED: This federal credit ended Dec 31, 2025 under the One Big Beautiful Bill Act (Public Law 119-21, signed July 4, 2025). Installations completed in 2026 or later do not qualify, regardless of when payment was made. For installations completed during 2023–2025, the credit applied to U.S. primary residences with heat pumps or heat pump water heaters that met or exceeded the highest CEE efficiency tier in effect at the start of the install year; starting 2025, the manufacturer's Qualified Manufacturer Identification Number (QMID) was required on the tax return. Homeowners with eligible 2025 installations may still claim the credit on their 2025 federal tax return. Verify with a qualified tax professional.
California Home Electrification and Appliance Rebates (HEEHRA) — single-family
When available, up to $8,000 (households below 80% AMI) or $4,000 (80–150% AMI) for a qualifying heat pump HVAC system, with additional rebates for heat pump water heaters, electrical panel upgrades, and wiring inside the per-household envelope. Phase I single-family funds are currently fully reserved (waitlist active). PROGRAM STATUS: Single-family Phase I is FULLY RESERVED statewide as of 2026-02-24 — new single-family applications are not being accepted and a waitlist is in place. Multifamily applications remain open. Phase II is under development pending DOE approval. HEEHRA is California's implementation of the federal IRA Home Electrification and Appliance Rebates program, administered by the California Energy Commission (CEC) with single-family implementation through TECH Clean California. When open, eligibility requires income-qualified single-family homeowners (or landlords with income-qualified tenants) at or below 150% of Area Median Income; income tiers determine rebate amount (below 80% AMI vs 80–150% AMI). Projects must obtain an approved reservation before installation; rebates only apply to heat pumps installed after the reservation is approved. Income verification is required before a contractor can submit a reservation. Replacement of an existing non-heat-pump space heating system is required for the HVAC rebate. Homeowners should check techcleanca.com and the CEC IRA rebate page for re-opening announcements before signing a contract.
TECH Clean California — heat pump water heater incentive (single-family, market-rate)
Currently unavailable: single-family heat pump water heater incentives are fully reserved as of 2026-05-30. Service-area-specific funds were fully reserved between May 2024 and February 2025; the November 2025 round is also fully reserved. Historical incentive amounts varied by utility service territory and customer income tier — verify against techcleanca.com for re-opening announcements. PROGRAM STATUS: Single-family heat pump water heater incentives are FULLY RESERVED as of 2025-11-14 — new single-family reservations are not being accepted. Service-area-specific incentives were fully reserved between May 2024 and February 2025; subsequent rounds have also exhausted. TECH Clean California is a statewide CEC initiative administered by Energy Solutions under CPUC oversight. When open, single-family eligibility requires the homeowner to be a customer of a participating California utility, the installation to use an enrolled TECH contractor, and the project to obtain a reservation before installation. Specific dollar amounts varied by service territory. Homeowners should not assume an incentive is available; verify current reservation status with techcleanca.com before signing a contract. Income-qualified homeowners may be routed to HEEHRA instead (also currently fully reserved for single-family).
California Equitable Building Decarbonization (EBD) Direct Install Program
No-cost direct-install upgrades for income-qualified households — homeowner does not pay out-of-pocket for covered measures. Measures may include heat pump HVAC, heat pump water heater, induction stove, electrical panel upgrade, and weatherization, subject to a per-household scope set by the regional implementer. Administered by the California Energy Commission (CEC) as the statewide Equitable Building Decarbonization Direct Install Program, with delivery through regional implementers and a separate Tribal Direct Install track. Targets low- and moderate-income households in low-income communities; specific AMI thresholds and per-region eligibility rules are set by the regional implementer rather than statewide. Both single-family homeowners and renters in eligible buildings may qualify, though scope and contractor selection are determined by the implementer (homeowners do not freely choose contractors). The program is funded through California IRA HOMES funding (60% allocation to Direct Install, approximately $130.3M) plus state appropriations. Direct Install retrofits began rolling out in summer 2025. Homeowners interested in EBD should contact the CEC at equitablebuildingdecarb@energy.ca.gov or watch for their regional implementer's launch announcement; the program does not accept open online applications the way TECH or HEEHRA do.
SCE Energy Savings Assistance Program (ESA) — income-qualified no-cost upgrades
No-cost (program-funded) upgrades for eligible households. Reported scope includes HVAC and cooling measures, water heating (including heat pump water heaters), weatherization, lighting, and home efficiency upgrades. As of 2026-05-30 the program is actively accepting applications. Eligibility is income-based; effective July 1, 2025 through May 31, 2026, ESA income limits run from approximately $39,125 for a one-person household up to approximately $80,375 for a four-person household, with roughly $13,450 added for each additional person. Homeowners or renters in buildings with four or fewer units may qualify (renters need landlord permission for some measures). Applicants enrolled in CalFresh, Medi-Cal, SNAP, WIC, or similar assistance programs may qualify without providing income documentation. Verify current thresholds at the program page before applying.
SCE Home Performance Plus (HPP) — geographic-eligible enhanced electrification rebates
Per-measure rebates (as reported via The Switch Is On clearinghouse): approximately $1,144.80/ton for heat pump mini-splits; approximately $667/ton for fuel-substitution HVAC; approximately $1,350 for heat pump water heater when replacing a gas unit; approximately $1.07/sq ft attic insulation, $1.06/sq ft wall insulation, $0.53/sq ft duct sealing; approximately $424 for induction cooktops; approximately $424/ton for air conditioner replacement. Verify current amounts and the qualifying-product list at the program site before signing a contract. As of 2026-05-30 the program is active for geographically-eligible households. Eligibility requires the home to be located in a designated geographic-eligibility area (SB-535 disadvantaged community per the CalEnviroScreen map). IMPORTANT EXCLUSION: households currently enrolled in income-assistance programs (CARE, FERA, LIHEAP, or SCE's Energy Savings Assistance Program) may be ineligible for HPP — those households are typically routed to ESA for no-cost upgrades instead. HPP and ESA cannot be stacked on the same measure. Homeowners should verify both their geographic eligibility and their income-assistance enrollment status before signing a contract or applying.
Golden State Rebates — Heat Pump Water Heater (SCE-served homes)
Up to $900 instant rebate (water-heating category temporarily unavailable as of January 2026; verify current status before purchase) As of 2026-05-30 the water-heating category of Golden State Rebates is temporarily unavailable per the program operator; the program is scheduled to sunset June 30, 2026 or earlier if state funds run out. When active, residential customers on a residential rate served by a participating California IOU (PG&E, SCE, SDG&E, or SoCalGas) may qualify. Equipment must meet specified UEF and tank-size requirements (e.g., 45-55 gallon heat pump water heaters with UEF >= 3.30 when replacing an electric water heater). Verify current category status and qualifying-product list at goldenstaterebates.com before purchasing.
LADWP Consumer Rebate Program — Heat Pump Water Heater
As of 2026-05-30, for equipment purchased and installed on or after November 1, 2025, the LADWP Consumer Rebate Program offers up to $2,500 per unit for qualifying heat pump water heaters. The exact amount is scaled by gallon capacity and Uniform Energy Factor (UEF). Homeowners should verify the unit's specific rebate tier against the current CRP qualifying-products list before purchase. Must be a LADWP residential electric customer with an active meter at the installation address. The unit typically must replace a gas water heater (fuel-switching), the unit must appear on the CRP qualifying-products list, and an LA Building & Safety permit must be obtained. Application is post-installation and must be postmarked within 12 months of the purchase date. This rebate may stack with other regional/state incentives (for example, the South Coast AQMD GO ZERO program, when funded) — homeowners should verify stacking eligibility with each program before assuming combined totals.
LADWP Customers and CPUC-IOU Programs — Eligibility Disclosure
As of 2026-05-30, LADWP residential customers are generally NOT eligible for the following CPUC-administered or IOU-funded California incentive programs, which are restricted to investor-owned utility (PG&E, SCE, SDG&E) customers: TECH Clean California (heat pump incentives — fully reserved as of Pass 2 in any case), HEEHRA-CA (single-family heat pump rebates — fully reserved single-family as of Pass 2), the Self-Generation Incentive Program (SGIP — battery storage), Golden State Rebates (IOU joint program), and the CPUC NEM 3.0 / Net Billing Tariff for new solar interconnections. LADWP runs its own parallel rebate portfolio (Consumer Rebate Program for HVAC / water heating / cool roofs, Charge Up LA! for EV chargers, and its own net-metering tariff). Homeowners served by LADWP should look to the LADWP CRP rather than CPUC-IOU programs when scoping incentives. Applies to all LADWP-served residential addresses. Homeowners who are unsure whether they are served by LADWP or SCE should check the utility name printed on their most recent electric bill — the eligible program set differs materially between the two utilities even within LA County.
$3,000–$6,500 — Installed cost for a single-family SoCal home replacing a gas or electric tank water heater with an ENERGY STAR-rated 50–80 gal heat pump water heater, mid-range equipment, pre-incentive. Range covers 120V plug-in retrofits at the low end and 240V dedicated-circuit installs with minor plumbing rework at the high end. Excludes service-panel upgrade.
As of 2026-05-30, SCE residential electric service runs on time-of-use (TOU) rate plans by default. The standard TOU option is TOU-D-4-9PM (4 PM-9 PM weekday peak window). Alternatives include TOU-D-5-8PM (5 PM-8 PM peak window for households that cannot shift evening load) and TOU-D-PRIME, a rate reserved for customers with an EV, plug-in hybrid, residential battery, or an electric heat pump for space or water heating. TOU-D-PRIME features lower peak rates paired with a higher daily basic charge (about $0.79/day, roughly $24/month). Under California's Net Billing Tariff (NEM 3.0), new residential solar customers in SCE territory must be on TOU-D-PRIME. Legacy tiered and earlier TOU plans (TOU-D-A, TOU-D-B, TOU-D-T) remain available to existing customers but are closed to new enrollment. Households planning heat pump HVAC, EV charging, battery storage, or whole-home electrification may want to compare TOU-D-4-9PM and TOU-D-PRIME; verify current per-kWh rates and plan rules at the provider site before switching.
As of 2026-05-30, LADWP residential electric customers default to rate schedule R-1A (Standard), a three-tier inclining-block structure (Tier 1 / Tier 2 / Tier 3). During summer high-demand months all three tiers price separately; in winter Tiers 2 and 3 are billed at the same rate. LADWP divides the City into two temperature zones (Zone 1 cooler, Zone 2 hotter inland) and gives Zone 2 a larger Tier 1 allowance. Bills also include a monthly Power Access Charge (PAC) that scales with the customer's highest energy use over the prior year. A time-of-use option, R-1B (TOU), is available on request. Important: LADWP is a municipal utility owned by the City of Los Angeles and is NOT regulated by the California Public Utilities Commission (CPUC); rates are set by the LA Board of Water and Power Commissioners. LADWP operates its own net-metering tariff (system cap 1 MW) and is NOT subject to CPUC's NEM 3.0 / Net Billing Tariff (NBT), which governs only the investor-owned utilities PG&E, SCE, and SDG&E. Homeowners should verify current rates on the LADWP residential rates page before sizing a project; LADWP filed rate increases for 2026.