Home Electrification Accelerator Program FAQ

Heat Pump Water Heaters (HPWHs) and Heat Pump HVAC systems use electricity to move heat from one place to another instead of generating heat directly like traditional gas and electric resistance appliances. This makes them the most energy-efficient appliances on the market (3-4 times more efficient than gas water heaters and HVAC systems). Heat Pump appliances can also be programmed and controlled remotely to use power from the grid when it is cleaner and cheaper, saving you money.

A heat pump water heater (HPWH) is an energy-efficient alternative to a gas or electric resistance water heater. They use electricity to extract heat from the surrounding air and transfer it to water in a tank.

A heat pump, hereafter referred to as heat pump heating, ventilation, and air conditioning (HP HVAC), is an energy-efficient alternative to furnaces and air conditioners. These systems use electricity to transfer heat from one place to another, providing both heating and cooling in the same unit. 

There are several incentives, rebates, and tax credits available today to significantly reduce the upfront cost of heat pump appliances, often times making switching to a heat pump appliance equal to or less expensive than gas or electric resistance units. When you switch from a gas water heater or HVAC systems to a heat pump technology, you will slash your home’s carbon footprint. Heat pump appliances are also safer and healthier; they don’t require an open flame and combustion, removing a major potential source of indoor air pollution from your home. When heat pump appliances are installed and controlled properly, many customers experience total utility bill savings as well, especially when on an electrification rate and paired with solar and/or battery storage.

The existing water heater must be decommissioned, and the new HPWH must comply with local building permit and installation requirements. Photos and permits are required for incentive claims.

The existing furnace/heater must be decommissioned, and the new HP HVAC system must comply with local building permit and installation requirements. Photos and permits are required for incentive claims.

Eligible work includes any electrical work that occurs in anticipation of (pre-wiring) or during installation of an HPWH and/or HP HVAC system. Examples of associated electrical work include pre-wiring, circuits, conduit, receptacles, smart splitters, sub-panels, and panel upgrades.

All electric heat pump water heaters qualify, regardless of amperage, voltage, configuration (unitary or split), efficiency rating, or tank size. This program is for heat pump water heaters ONLY. Tankless water heaters are not eligible.

All fully electric HP HVAC systems qualify, regardless of type and configuration (packaged/split, ducted/ductless, single/multi-zoned), amperage, tonnage, or efficiency rating. Dual-fuel systems with gas heat as backup do not qualify.

Any community member who lives at a residence served by SBCE and has an account in good standing is eligible to apply for HEAP. Each SBCE account is eligible for one of each type of incentive offered under this program per fiscal year.

Incentives are currently available for:

• Heat pump water heaters (HPWHs).
• Heat pump heating ventilation and air conditioning (Heat Pump HVAC)
• Associated electrical work, including pre-wiring or upgrades required during HPWH installation.

Applicants must submit an Incentive Reservation application verifying eligibility, provide their SBCE account number, upload a contractor bid, and include documentation for income qualification (if applicable). Reservations must be made before installation.

SBCE customers must apply for the incentive, but the incentive can be received by either the SBCE customer or the contractor. Applicants may identify their contractor as the incentive payee, in which case the contractor is required to pass down the entire incentive amount to customer as shown by line-item deduction on project invoice.

Incomplete applications or those that do not meet requirements will not be approved. Applicants will be notified and may need to resubmit with the correct information.

• For HPWH projects, you can apply for a Fast and Free Permit through the City’s permitting platform here:  Accela Citizen Access
• For Heat Pump HVAC projects, you can apply for an Express HVAC permit through the City’s permitting platform:  Accela Citizen Access

Yes! Emergency replacements are not required to have a reservation to receive an incentive from SBCE. For help with receiving your incentive for an HPWH emergency replacement, give us a call at (805) 991-7699

 Yes — applicants must stay enrolled in SBCE’s generation service for five years from the installation date.

Incentive levels vary:

HPWHs:

• $500 (base incentive) or $1,000 (income-qualified incentive) for replacing electric resistance water heaters.
• $2,500 (base incentive) or $3,500 (income-qualified incentive) for replacing gas or propane water heaters.

HP HVAC:

• $1,000 (base incentive) or $2,000 (income-qualified incentive) for replacing an electric resistance heater/furnace.
• $2,500 (base incentive) or $3,500 (income-qualified incentive) for replacing a gas or propane heater/furnace.

Associated Electrical Work:

• Up to $2,000 (base incentive) or up to $4,000 (income-qualified incentive).

Yes, income-qualified applicants receive higher incentive amounts. For example, they can receive up to $3,500 for replacing a gas water heater with an HPWH.

Yes! HEAP is a separate program, and SBCE customers can apply for both.

• For HPWH projects, a list of contractors who have completed projects for SBCE customers can be found here: SBCE Res HPWH Contractors.pdf
• For Heat Pump HVAC projects, you can find vetted contractors here: (Hire Trusted Electrification Contractors | The Switch Is On) 

• Generally, incentives are stackable as long as they come from separate funding sources. The following programs do not stack for the same technology, meaning you must select between them:
• 3C-REN, Golden State (HPWHs only), and California Energy Smart Homes cannot be stacked together
• IRA HEEHRA and IRA HOMES cannot be stacked together
• Please submit a form through our Home Advisor Service, and the SBCE staff will respond to your inquiry on the latest available incentives:  Home Electrification Advisor | Sustainability & Resilience
• Resources for building electrification and incentives can be found here: Govcentives 

• The IRA includes both federal tax credits and state-administered incentives for efficient electric appliance upgrades (HEEHRA and HOMES).
• Federal Tax Credits for Home Energy Efficiency Improvement have criteria and annual limits for certain technologies. Use the U.S. Department of Energy’s Tax Credit Product Lookup Tool to confirm that your appliance meets the tax credit criteria. This tax credit expires on December 31, 2025, so all projects must be installed and completed by the end of this year.
• The HEEHRA Incentive program (now available) provides point-of-sale incentives to help low-income and moderate-income households (up to 150% of the area median income) go electric. Incentive amounts depend on income levels and technology.
• It is important to note that the HEEHRA and HOMES incentive programs cannot be stacked together. For households that qualify for both, the HEEHRA incentives will generally be more financially beneficial.

No – SBCE program funds are not tied to federal allocations.