Your 2026 HVAC rebate & upgrade options, sorted out in one visit
Air & Plumbing Systems helps Bay Area homeowners navigate the heat-pump HVAC, water-heater & electrification rebates that apply in 2026 — federal, state, utility and city — and stack the ones you qualify for.
The two biggest HVAC opportunities right now
Wood-burning → heat pump: BAAQMD Clean HEET (apply by Jul 14, 2026)
Replacing a wood stove, insert, or open-hearth fireplace with an electric heat pump can earn $3,000–$6,500 base, plus a $4,000 low-income plus-up and $3,000 for a second device. Applications close 2026-07-14 at 5 PM PDT, and approval must come before work begins.
Check your Clean HEET timelineYour utility’s heat-pump rebate (SVCE · PCE · SJCE · CPAU)
Most Bay Area utilities pay $1,500–$5,000 toward a qualifying heat-pump HVAC system, with higher amounts for income-qualified households. Which program applies depends on your electric provider — we match it to your address and equipment.
See which utility rebate fits your homeEstimate your incentives
Enter your ZIP & household basics to see heat-pump, water-heater & electrification incentives you may qualify for.
Why a heat pump, and why 2026 changes the math
The federal 25C tax credit that helped offset high-efficiency HVAC expired 2025-12-31 under the OBBBA — so for 2026, the savings shift to utility, city, and air-district rebates. The good news: those stack. A single heat pump heats and cools the home at 2–4× the efficiency of a furnace-plus-AC, and it’s the exact equipment nearly every program is built to reward.
That’s what makes the upgrade pencil out. Layering a utility base rebate (SVCE, PCE, SJCE, or CPAU) with a city add-on — and, for income-qualified homes, HEEHRA — can bring a full heat-pump conversion close to the cost of a like-for-like furnace swap. We model your specific stack, by utility territory and equipment, at the estimate.
Programs that may apply to you
Pick your city above and the matching programs expand automatically.
What it covers: Heat pump HVAC and HPWH (replacing gas or electric resistance), plus city-funded adders in some cities
Details: HP HVAC $2,000 standard / $3,000 income-qualified (replacing gas); $500 / $1,500 (replacing electric resistance). HPWH $2,500 / $3,500 (gas); $1,000 / $2,000 (electric resistance). City adders stack on top in some SVCE cities: Milpitas +$850 HPWH / +$2,500 HP HVAC / +$250 panel; Mountain View +$2,000 HPWH (gas) / +$500 HPWH (electric); Los Altos +$1,000 HPWH / +$1,000 HP HVAC; Sunnyvale +$1,000 HP HVAC / +$1,500 income-qualified HVAC. Reserve before install
Eligibility: SVCE electric customer: Campbell, Cupertino, Gilroy, Los Altos, Los Altos Hills, Los Gatos, Milpitas, Monte Sereno, Morgan Hill, Mountain View, Saratoga, Sunnyvale, unincorporated Santa Clara County. Excludes San Jose, City of Santa Clara, Palo Alto
View official program page →What it covers: Heat pump HVAC and HPWH (replacing gas)
Details: HP HVAC $1,500 standard / $2,500 Environmental Justice Communities; HPWH $2,500 / $3,500 EJC. Reserve before install (120-day window)
Eligibility: SJCE customer, City of San Jose; replace a gas appliance
View official program page →What it covers: Heat pump HVAC, HPWH, and electrical panel
Details: HP HVAC $1,500 (replace gas/propane/oil furnace). HPWH $3,500 (replace gas) / $500 (replace electric resistance). Electrical panel upgrade $1,000. CARE/FERA bonus +$1,000 per measure, max $4,000 per electric account. Apply within 90 days. Optional 0% loan up to $10,000
Eligibility: PCE customer in San Mateo County or City of Los Banos; property owner; replace a gas/propane/oil appliance (or electric resistance for the $500 HPWH). Not new construction or ADU
View official program page →What it covers: Heat pump HVAC and HPWH (replacing gas or electric resistance)
Details: HP HVAC $2,500 standard / $5,000 income-eligible (REAP). HPWH $3,500 (replace gas) / $500 (replace electric resistance), plus a limited-time +$500 bonus for switches between July 1 and October 31, 2026. Gas Meter Removal incentive $2,500. Wiring/circuit add-ons available. Reserve before install (holds 120 days)
Eligibility: Palo Alto resident with active CPAU electric and gas service
View official program page →What it covers: HPWH, HVAC tune-up, smart thermostat, attic insulation
Details: HPWH $5,500 (replace gas), up to $6,500 income-qualified (FRAP/LIHEAP). HPWH $500 (replace electric resistance), up to $1,000 income-qualified. HVAC tune-up up to $75. Smart thermostat $50. Attic insulation $1.00/sq ft up to $5,000. ENERGY STAR + permit. First-come.
Eligibility: City of Santa Clara resident receiving electricity from Silicon Valley Power
View official program page →What it covers: Heat pump HVAC and HPWH
Details: HPWH grid-connected $4,600 (under 55 gal) / $5,300 (over 55 gal), up to $5,685 / $6,385 income-qualified; simpler non-connected option $3,300 / $3,800; +$1,500 low-GWP refrigerant kicker. HP HVAC $3,000/unit (2-stage or variable speed with old AC decommissioned) or $2,000/unit; up to 2 units; +$2,000 electrical; +$1,000 income-qualified
Eligibility: 3CE customer in Santa Cruz County: Capitola, Santa Cruz, Scotts Valley, Watsonville, unincorporated. Replace fossil-fuel equipment; ENERGY STAR; apply by deadline
View official program page →What it covers: Heat pump HVAC, only when replacing a wood-burning device
Details: CLOSED to new applications: the Clean HEET application period ended 2026-07-14. Was $3,000 to $6,500 base by device replaced; +$4,000 low-income; +$3,000 for a second device.
Eligibility: Homeowner in the 9 BAAQMD counties (includes San Mateo and Santa Clara; NOT Santa Cruz) replacing a wood stove, insert, or fireplace with a heat pump
View official program page →What it covers: Heat pump HVAC, only when replacing a wood-burning device
Details: $5,000 for an electric heat pump replacing a wood stove, insert, or fireplace. Income-qualified: low-income households and residents of designated disadvantaged communities. Estimate must be dated on or after 2025-09-03 by an authorized installer
Eligibility: Homeowner in Santa Cruz, Monterey, or San Benito County; income or DAC qualified. This is the Santa Cruz analogue to BAAQMD Clean HEET (Santa Cruz is in MBARD, not BAAQMD)
View official program page →What it covers: Heat pump water heater, instant point-of-sale rebate
Details: CLOSED to new coupon reservations after 2026-07-23; program ends after 2026-07-31 (final redemption 2026-07-31). Was instant rebate $400 to $700 by tank size (about $600-$700 replacing gas, $400 replacing electric).
Eligibility: Qualifying efficiency and size; participating retailer; PG&E/SCE/SDG&E customer
View official program page →What it covers: New-construction all-electric incentives (HPWH controller, smart panel/HEMS, battery storage)
Details: $600 HPWH controller, $1,500 smart panel/HEMS per dwelling unit, plus battery storage $250/kWh ($300/kWh in all-electric reach-code jurisdictions). All-electric new construction only, not retrofits
Eligibility: Market-rate all-electric new construction (single-family, multifamily, manufactured) statewide
View official program page →What it covers: Standard central or room AC that is not a heat pump
Details: No utility, CCA, or federal program rebates replacing a standard non-heat-pump AC in 2026. The federal central-AC credit expired 2025-12-31. Closest help: PG&E AC Quality Care tune-up up to $1,125, SVP HVAC tune-up up to $75, smart-thermostat rebates $40-$60, Golden State room AC $40. The real rebate money is in converting to a heat pump ($1,500-$6,500+ depending on city).
Eligibility: All three counties
View official program page →What it covers: Heat pump HVAC
Details: HP HVAC $3,000 per ton, max $10,000 (replace gas furnace). $1,000 per system (replace electric resistance). Income-qualified bonus +$500 FRAP and +$500 LIHEAP per system (up to $11,000 total when maxed). HVAC Tune-Up $75. Rebates up to $600 paid as a bill credit, over $600 by check; allow 2 to 3 billing cycles. Licensed or qualified contractor labor only.
Eligibility: City of Santa Clara resident receiving electricity from Silicon Valley Power
View official program page →What it covers: Whole-building electrification bundle (HP space heat + HPWH + induction + electric dryer)
Details: Single-family $4,250 base + $250 HP dryer bonus + up to $1,000 electrical infrastructure bonus. Requires converting ALL gas appliances together; not HPWH-only; no propane conversions
Eligibility: PG&E/SCE/SDG&E single-family and low-rise multifamily
View official program page →What it covers: Heat pump HVAC and HPWH reservations
Details: No longer accepting single-family reservations; fully reserved statewide.
Eligibility: Not applicable (closed)
View official program page →What it covers: Heat pump HVAC, HPWH, electrification
Details: Single-family fully reserved, waitlist only. Multifamily up to $14,000 per unit for income-qualified; intake temporarily paused
Eligibility: Income-qualified; HEEHRA-certified contractor
View official program page →What it covers: Tax credit for heat pumps and HPWH
Details: Not available for property placed in service after 2025-12-31 (OBBBA). Pre-2026 installs may still be claimed.
Eligibility: Not applicable (expired for 2026)
View official program page →Some cities add a bonus on top
If you’re in certain Santa Clara County cities, your city may offer an extra incentive that stacks on top of the SVCE base rebate. We verify current amounts at the estimate.
City stack-on bonuses+
A recent win
We recently helped a San Jose homeowner stack SVCE and BayREN heat-pump incentives to make a full heat-pump upgrade cost-competitive with a like-for-like furnace replacement (2026-04 install). Every outcome depends on home specifics, utility territory, and the equipment installed — we walk through exact numbers at the in-home estimate, not here.
Frequently asked questions
Is the federal HVAC tax credit (25C) still available in 2026?+
Can I stack utility and city rebates?+
Do I have to apply before installation?+
Is HEEHRA (IRA electrification) available now?+
Why a heat pump instead of a new furnace and AC?+
How do I know which programs apply to my home?+
Program availability, rebate amounts, and eligibility rules can change. Air & Plumbing Systems does not administer these programs — final eligibility must be confirmed against current program rules at the time of application. Each program above shows the date we last verified it.
