Water heating

Heat pump water heater (HPWH)

If you’re planning to transition to a clean energy home, your water heater is a great place to start. Nearly 60% of the methane gas used by homes is for heating water. Heat pump water heaters are clean, safe, and all-electric. Peninsula Clean Energy offers a rebate up to $2,000 to help customers make the switch to a heat pump water heater. Our rebate can be used in addition to other rebates and incentives, many of which are listed here.

Get a 0% interest loan up to $10,000 with no credit check for a heat pump water heaters through our Zero Percent Loan Program.

installed heat pump water heater
Installed heat pump water heater
  • Don't wait until your water heater fails catastrophically: if your water heater is at least 10 years old or you are planning a remodel consider a HPWH
  • A qualified contractor can evaluate your home and help you understand factors that may affect the ease and cost of installation, including HPWH selection and location, but also…
  • Check out these HPWH installation guidelines
  • Rebates not only help offset costs of HPWHs but are also available for electrical panel  upgrades, if needed
  • HPWHs typically need more space when compared to gas water heaters and are best suited for installation in a garage, but may be installed in a closet if it is properly ventilated
  • HPWH noise varies depending upon the model and may be mitigated through choice of location and/or sound-proofing
  • Start today – demand for HPWHs is growing and contractor schedules and order times for popular models require advanced planning

Methane gas leaks and combustion of methane contribute to climate change and are unhealthy and potentially hazardous in the home. Heat pumps have been around for decades – refrigerators and window air conditioners both use heat pumps.

  • Efficient: At least 3x more efficient than methane gas water heaters  
  • Safe: Heat pumps are all-electric – no gas combustion emissions or hazards 
  • Clean: Heat pumps powered by Peninsula Clean Energy is 100% clean

Peninsula Clean Energy rebates make it easier for residents in its member communities to transition to a clean energy home. The following table outlines all of Peninsula Clean Energy home appliance rebates. Please read the terms & conditions for full eligibility details and program requirements.

Upgrade TypeRebate Amount
Heat pump HVAC
Replace gas heater/furnace$2,500
Heat pump water heater
Replace gas water heater$2,000
Replace electric resistance water heater$500
Additional rebate add-ons
Electrical panel upgrade$1,000
CARE/FERA customer$1,000

Additional rebates
Other regional, state, and federal programs offer incentives to help your transition to a clean energy home. We recommend using the Switch is On incentive finder tool for information about other rebates available to you.

  • Be a resident of San Mateo County or the City of Los Banos 
  • Own the residence where upgrades are installed  

Please read the terms & conditions for full eligibility details and program requirements. Section 4.1 specifies the heat pump water heater eligibility requirements.

Please note that this applies to our rebates only. If you are also applying for our 0% loan, there are additional requirements and steps. Visit our Zero Percent Loan program to learn more.

  1. Plan your project: review our program guidelines and find a contractor. You may work with any contractor you'd like. If you need assistance finding a contractor, refer to our list of loan program approved contractors here.
  2. Install your equipment and retire your old gas equipment. Make sure to get a building permit for your project from your city.
  3. Apply for your rebate: you will be asked to provide photos of your new equipment and capped gas line to the old gas equipment, proof of project costs such as a contractor invoice, and copy of the city permit.
  4. Receive rebate: once the application is approved, we will mail you or your contractor the rebate check, whichever is identified as the rebate recipient in the application. We will only mail the rebate to your contractor if they applied on your behalf and provide proof that the rebate was fully passed down to you as a discount.

To be eligible for the rebate, you must own the property in San Mateo County or Los Banos where the HPWH is being installed. We offer two rebate amounts depending on the water heater type that your new HPWH is replacing. Below is the HPWH eligibility guidelines as stated in our rebate program terms & conditions:

  • If you replace an electric resistance tank or tankless water heater, you are eligible for a $500 rebate. HPWH to HPWH replacements are not eligible.
  • If you replace a gas, propane, or oil tank or tankless water heater, you are eligible for a $3,000 rebate. New construction projects do not qualify.
  • Proof that you decommissioned an old water heater is required. This can include a before and after photo demonstrating removal of the old equipment, or a photo of the capped fuel line at the location where the decommissioned equipment was or is.
  • All electric heat pump water heaters qualify, regardless of amperage, voltage, configuration (unitary or split), efficiency rating, or tank size.
  • One rebate per water heater replaced. Limited to two HPWH rebates per electric account.

To be eligible for the electrical panel upgrade rebate, you must own the property in San Mateo County or Los Banos where the panel is being upgraded, and the panel upgrade must take place within 6 months of the heat pump water heater or heat pump HVAC installation. Below is the electrical panel eligibility guidelines as stated in our rebate program terms & conditions:

  • Main electrical panel upgrades qualify. This includes installing a new panel with the same amperage or increasing the electrical service to the residence and installing a new panel with increased amperage. Main electrical panel amperage must be 200 amps or less to qualify.
  • Electrical subpanel upgrades or electrical subpanel additions qualify.
  • Electrical work not involving a main panel or subpanel upgrade/addition, such as running a new circuit from the existing panel, do not qualify for the rebate.
  • The electrical panel upgrade must take place within 6 months of the HPWH or HP HVAC installation to qualify. This rebate is a bonus rebate, not a standalone rebate, and therefore cannot be applied for on its own. Apply for this rebate at the same time as a HPWH and/or HP HVAC application.
  • Limited to one panel upgrade rebate per electric account.

The following documents are required:

  • Itemized contractor invoice(s):
    • Invoice must show the name and total cost of the heat pump water heater. If invoice is combined with other work, name of each upgrade and cost must be itemized. If your project was self-installed/“DIY,” receipts for the equipment and any materials used in the installation may be submitted instead.
  • Photos of HPWH and electrical panel, if applicable:
    • One photo of the installed HPW from afar and one of the nameplate (i.e. the sticker with the specifications)
    • One photo of the inside of the new panel installed, if panel was upgraded.
  • Photo proof of previous water heater removal and/or decommissioning, either:
    • Photo of capped gas line to the old water heater, or
    • Before and after photos demonstrating removal of old water heater.
  • Copy of city permit(s) for HPWH and electrical panel upgrade, if applicable:
    • Permit must show the name of each upgrade that took place.
    • If the permit is for a large remodel and does not specifically state the heat pump water heater or electrical panel upgrade, additional city permit documentation is needed to demonstrate that these upgrades were part of the work completed.

You can use any contractor you’d like. In fact, self-installed/“DIY” projects are also eligible for the rebate. However, please note that you to get our Zero Percent Loan, you do have to use a loan program approved contractor.

Yes, self-installed / “do it yourself” heat pump water heater projects qualify for the rebates. Please note self-installed projects are still required to provide copy of the city permit.

You are not required to use the same contractor for the HPWH and electrical panel upgrade. However, the electrical upgrade rebate must be applied for at the same time as a heat pump water heater or heat pump HVAC rebate.

Both are allowed – you can apply yourself or the contractor can do it on your behalf. The application will ask who is filling out the application. Make sure to talk to your contractor about who will be submitting the application so that you do not submit duplicate applications. Duplicate applications will lead to longer processing times.

The rebate goes to the customer by default unless the contractor is identified as the rebate payee in the application. The rebate may only go to your contractor if it fully passed down as a discount to you and clearly itemized in their invoice.

Unfortunately, we do not offer rebate reservations at this time.

The average time to receive the rebate from the time of application is 4-6 weeks. Applications submitted through BayREN generally take about a week longer than applications submitted directly to us. You will receive an email from us when you rebate application is approved; from that point, you can expect the check in 2 weeks.

Unfortunately, they do not qualify. Rebates are only available for replacement/retrofit projects where the heat pump water heater installed is replacing a gas or other fossil-fuel powered water heater, (for the $3,000 rebate) or electrical resistance water heater (for the $500 rebate).

You do not have to be the PG&E account holder to qualify for the rebate. However, you must be the property owner. If the application is not under the PG&E account holder’s name, we will reach out to request additional documentation that proves you are the property owner and/or reside at the property.

Yes, rental properties qualify for the rebate as long as the rebate applicant is the property owner.

If you installed a HPWH between January 1, 2022 and September 30, 2022, you are eligible for our previous rebate amount of $1,000. Only installations completed on or after October 1, 2022 are eligible for our current rebate of $3,000. 

Yes, we offer up to two heat pump water heater rebates per electric account; one per water heater replaced.

It depends. The electrical panel upgrade must take place within 6 months of the heat pump water heater or heat pump HVAC installation to qualify. This rebate is a bonus rebate, not a standalone rebate, and therefore cannot be applied for on its own. The rebate must be applied for at the same time as a heat pump water heater or heat pump HVAC rebate.

This rebate is a bonus rebate, not a standalone rebate, and therefore cannot be applied for on its own. The rebate must be applied for at the same time as a HPWH or heat pump HVAC rebate. If you are using a different contractor for your electrical panel upgrade and the HPWH contractor is the one applying for you, you should provide with them with these three things: 1) copy of permit for electrical work, 2) photo of the inside of the panel, and 3) invoice for your contractor/electrician for the panel upgrade. Your contractor will submit these documents for you along with the HPWH application.

If you are applying yourself, you can submit all the documents for the HPWH and electrical panel upgrade in that single application.

The program does not have an end date and is available until funding is depleted. Rebates are available on a first-come, first-served basis based on the application submittal date. It is likely for the rebates to continue through 2024 and future years, though the rebate levels are subject to change.

Peninsula Clean Energy has rebates for heat pump HVAC. Please see Heating and Cooling for details. You may also qualify for our zero interest loan program – see Zero Percent Loans