Heat Pump and Water Heater Rebates in the South Bay and Peninsula

Where do heat pump rebates come from now?

Mostly from your local power provider. In the South Bay and Peninsula, the electricity on your bill is usually bought by a local, community-run provider, and several of these offer their own rebates for switching from gas to electric heat pumps. Some cities add their own money on top.

The larger federal and state programs that many people have heard about are not available for new installs right now. That’s why the first step is always to find out who supplies your power. It’s printed on your PG&E or city utility bill.

Which rebate program applies to my city?

Find your city below. As of November 2026, these are the main programs for heat pump heating and cooling (heat pumps) and heat pump water heaters. We don’t list amounts because they change often. Each program’s own page has the current details.

Your city	Power provider and program	When to apply
Milpitas, Sunnyvale, Mountain View, Cupertino, Campbell, Los Gatos, Saratoga, Monte Sereno, Los Altos Hills	Silicon Valley Clean Energy (SVCE) home rebates, with a higher tier for income-qualified homes. Milpitas, Mountain View, Sunnyvale and Los Altos Hills add city rebates on top.	Before the install
San Jose	San José Clean Energy EcoHome Rebate. The heat pump must replace a gas appliance, and the old gas line is capped.	Before the install (approval required)
Palo Alto	City of Palo Alto Utilities, including its Electrify My Home program and rebates for heat pump water heaters	See the city’s page
Santa Clara	Silicon Valley Power, the city’s own utility, which lists its rebates on its site	Check SVP’s page first
Menlo Park, West Menlo Park, Redwood City, San Carlos, Woodside, East Palo Alto	WestLight Energy (formerly Peninsula Clean Energy) appliance rebates, plus an extra amount for CARE and FERA customers and a panel upgrade rebate	Within 90 days after the install
Fremont, Newark, Union City, Sunol	Ava Community Energy, which has an incentive finder: enter your address to see current offers	See Ava’s finder

• Milpitas, Sunnyvale, Mountain View and most of Santa Clara County Program website (Silicon Valley Clean Energy)
• San Jose Program website (San José Clean Energy)
• City of Palo Alto Utilities Palo Alto Program website (City of Palo Alto Utilities)
• Silicon Valley Power Santa Clara Program website (Silicon Valley Power)
• Menlo Park, Redwood City, San Carlos, Woodside, East Palo Alto Program website (WestLight Energy)
• Fremont, Newark, Union City, Sunol Program website (Ava Community Energy)

Program names and logos belong to their owners. Upgrade Home Services is an independent, licensed contractor. We are not affiliated with, and not endorsed by, these programs or utilities.

Not sure which applies to you? Call us at (408) 649-3198 with your city, and have your electric bill handy. You may qualify; call us and we’ll check what applies to your home.

What about federal tax credits and state rebates?

As of November 2026, neither is available for a new installation:

• Federal tax credit. The IRS Energy Efficient Home Improvement Credit covered heat pumps and heat pump water heaters, but it only applies to equipment placed in service by December 31, 2025. There is no credit for 2026 installs.
• State HEEHRA rebates. The income-qualified Home Electrification and Appliance Rebates, run by TECH Clean California, have been fully reserved statewide since February 24, 2026. New requests go on a waitlist.

If either program reopens, we’ll update this page.

What do most rebates require?

Each program has its own rules, but most local rebates share these:

1. Replace a gas appliance. The larger rebates are for switching a gas furnace or gas water heater to a heat pump.
2. Apply at the right time. SVCE and San José need approval before the work starts. WestLight takes applications after the install. Applying late can mean no rebate.
3. Use qualifying equipment. Some programs set minimum efficiency or size, or exclude certain types.
4. Pull a permit. Programs usually ask for the city permit, and some want the old unit removed and the gas line capped.
5. Keep your paperwork. Save the invoice, photos of the new and old equipment, and the permit. You’ll need them to apply.

We pull the permit on every heat pump job and give you the invoice, photos and permit copy for your application. Funding is often first-come, first-served and can run out, so it’s worth checking early.

Are there 0% loans for heat pumps?

Yes, in two areas. As of November 2026, San José Clean Energy’s EcoHome Payment Plan and WestLight Energy’s zero percent loan offer 0% financing for heat pump water heaters and heat pump HVAC, paid back on your electric bill. Both require an approved contractor and a signed loan agreement before the install. Upgrade Home Services is an approved contractor for both. Approval is up to the program.

“They were honest, very pleasant to work with and they did not try to upsell us anything we don’t actually need.”

Ellen I., Yelp review

How does Upgrade Home Services help with rebates?

Upgrade Home Services is a family-owned HVAC company at 743 Ames Ave in Milpitas, licensed by the California Contractors State License Board (CSLB #1066776) and serving homeowners since 2002. At your free estimate, we confirm your power provider and city, check which programs are open that day, and quote equipment that meets their rules. We handle the permit and give you the paperwork you need to apply. We serve 22 cities in Santa Clara, San Mateo and southern Alameda counties. We never promise a rebate amount, because the programs decide that.