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Heat Pump Water Heaters

Did you know water heating makes up 20% of your energy bill? Replace your gas or electric resistance water heater with a high-efficiency heat pump option for big energy and cash savings.

Heat pump water heaters are up to four times more efficient than standard models by using a process that transfers heat from the surrounding air to the water. Get started for energy bill savings, plus rebates for you and your contractor.* 

All upgrades must be completed by a BayREN Participating Contractor.

Learn about Heat Pump Water Heaters for Accessory Dwelling Units.

*Exact amounts vary by city and county.


Get cash back on a high-efficiency, heat pump water heater when you work with a BayREN Participating Contractor. Combined with incentives for the contractor, switching to a new heat pump water heater is an economical and environmental choice.

Energy ratings (UEF — or Uniform Energy Factor) indicate how efficient the equipment is. The more efficient your equipment, the more energy you save and the lower your water heating costs will be.

See which upgrades qualify and how much you can earn, based on the energy efficiency of your new equipment:

Heat Pump Water Heater Upgrade Rebate

Heat pump water heater (fuel substitution)

Unified energy factor (UEF) ≥ 3.30 (All tank sizes). Must replace an existing non-electric system. 


Heat pump water heater 

Unified energy factor (UEF) ≥ 3.30 (All tank sizes)


Combustion Appliance Safety (CAS) test-out 

CAS test-out required if original unit shared an exhaust/flue pipe with a gas appliance that is left in operation. Not available as a standalone rebate. Only one per service address.

$100 bonus rebate


Some customers may be eligible for additional incentives. Find additional incentives.

*Rebates were updated as of August 1st, 2023. Learn more. 

  • Rebates are available on a first-come, first-served basis and available for qualifying Bay Area residents with homes built in 2016 or earlier.
  • Customers who receive only one, electric or gas, service from PG&E can apply for measures that correspond to the services received.
  • Customers must complete eligible improvements with a BayREN Participating Contractor in order to receive a rebate (except for electrification appliance measures).
  • Customer must not have previously received a rebate for the same product or equipment from more than one energy-efficiency program offering rebates, financing or other rebates funded with PG&E ratepayer dollars within the past three years for O&M measures and eight years for building shell, HVAC and water heating measures.
  • One rebate is offered per measure per address. 
  • Rebates are capped at $4,000 per eligible customer over an eight-year period. Individual measure rebates may not exceed the measure cost.
  • Some customers may be eligible for additional incentives. Find additional incentives.
How to Apply

Your BayREN Participating Contractor will assist you through the rebate process to make sure you get the best price on your projects.

To get started, contact your Home Energy Advisor for information about qualifying projects. Then hire a BayREN Participating Contractor and get your project started!

Your BayREN contractor will work with you to determine the scope and budget of your project. They will be able to tell you which rebates your project qualifies for.

Your contractor will create documentation of your project before and after it is completed. Once the project is completed, the contractor will submit program documentation to BayREN on your behalf.

After your documentation has been submitted, you can track the progress of your rebate online.

Get Started

Contact a Home Energy Advisor to learn more about home heating and cooling projects and rebates.

Find a Contractor

Have you chosen your project? Find a BayREN Participating Contractor in your area.

More Heat Pump Options

Heat Pump Dryer
Heat Pump Dryers

Replace your conventional gas dryer with a high-efficiency heat pump dryer and watch your energy use tumble — by at least 28%.

heat pump AC
Heat Pumps

Enjoy year-round comfort and savings with a heat pump that moves heat in or out of your home — for heating or cooling, based on the season.