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Electrify San José – Heat Pump Water Heater Rebate Program
Electrify San José is a new program that provides rebates for San José households to switch from a natural gas water heater to an electric heat pump water heater. Current California Alternate Rates for Energy (CARE) and Family Electric Rate Assistance (FERA) customers are eligible for additional rebate amounts.

Limited rebates are available on a first-come, first-served basis until September 2020.

Electrify San José will help homes switch from fossil-fuel based energy sources to electricity, helping reach our Climate Smart San José goals for zero net carbon (ZNC) building and citywide greenhouse gas reduction to improve public health, environment and economy.

Rebate Amounts
Customer Type Heat Pump Water Heater Installation Labor
Electrical Panel Upgrade
Building Permit Fees
Maximum Total Rebate
Income-qualified resident (CARE/FERA) Up to cost for qualified products
 Up to cost $6,000 with panel upgrade or $3,500 without panel upgrade
All Other Residents Up to cost for qualified products  Up to cost $4,500 with panel upgrade or
$2,000 without panel upgrade

Eligibility Requirements
Only properties and heat pump water heaters that meet all the requirements below are eligible for a rebate.
  • Property requirements:
    • Property must have existing natural gas water heater – no new construction
    • Replacement must be in a single-family or multifamily unit located in San José
  • Heat pump water heater requirements:
    • Minimum Uniform Energy Factor of 2.87 or greater
    • Must have a thermostatic mixing valve
    • Must have grid-connected capabilities
    • Must be Energy Star® certified

How to Apply for a Rebate
  1. Download the Electrify San José Application Packet. Residents and contractors must complete and submit all the items under “Reservation Application Checklist.” You will be notified within three (3) business days if your reservation has been approved.
  2. Complete the installation within 90 days of the reservation approval.
  3. Once installed, complete and submit all the items under “Post-Installation Checklist.” You will be notified if your rebate has been approved, and the program will award the contractor with the rebate.

For more details on how the program works, please refer to the Electrify San José Application Packet.

Selecting a Contractor
We recommend residents follow these best practices when selecting any contractor, including contractors provided on the list below.

On May 24, 2019, the City of San José issued a Request for Information (RFI) to generate a list of heat pump water heater installers to help residents identify local contractors. Contractors were asked to submit:

  • A signed “Participant Obligations and Requirements” agreement acknowledging that they will adhere to program rules
  • A valid and current California Contractors State License Board number
  • Proof of the minimum insurance requirements specified in the City's RFI

The City will post the list of responding contractors as it receives responses. If you are a contractor and would like to be on this list, please email and provide the required documents as specified in the City's RFI.

FAQ
Heat Pump Water Heater Diagram
Image Source: SCI REMC
What is an electric heat pump water heater and how does it work?
Heat pump water heaters are two to three times more efficient than gas water heaters. They use electricity to move heat from one place to another instead of generating heat directly.

To move the heat, heat pumps work like a refrigerator in reverse. While a refrigerator pulls heat from inside a box and dumps it into the surrounding room, a standalone air-source heat pump water heater pulls heat from the surrounding air and dumps it at a higher temperature into a tank to heat water.

Does a heat pump water heater work if the outside air is too cold?
Yes. While this is unlikely in San José’s climate, if it gets too cold, an electric heat pump water heater will switch to backup coils and run just like an electric resistance water heater.

What are the benefits of switching from a gas water heater to an electric heat pump water heater?
  • Lower Energy Bills – While an Energy Star®-certified heat pump water heater costs slightly more upfront, the energy cost savings will pay for its additional costs in about three years for a typical home.
    Source: Energy Star
  • Healthier and More Comfortable Living Spaces – Burning natural gas creates emissions of unhealthy gases such as nitrogen dioxide, carbon monoxide, and formaldehyde. Eliminating these emissions in your water heater or stovetop will improve indoor air quality while cooling the surrounding areas.
  • SMART Home – Most heat pump water heaters can be connected to Wi-Fi and to your smartphone for setting schedules and important alerts like water leak detection.
  • More Energy-Efficient and Climate Smart – Heat pump water heaters can be two to three times more energy-efficient than conventional electric resistance and natural gas water heaters, reducing your greenhouse gas emissions.

What are the benefits of a heat pump when used with solar electricity?
During the day when the sun is shining, rooftop solar panels harvest solar energy and convert it to be used in your home as electricity. Because heat pump water heaters are powered by electricity, pairing the heat pump with rooftop solar could effectively reduce the cost to run it compared to running it without solar. For more information on how to get solar, visit our Solar Energy page.

Will I need a building permit to replace my gas water heater?
Yes, your installation contractor will need to pull a permit with the City’s Building Division and Code Enforcement. For more information, call or visit the Permit Center at San José City Hall.

What are other ways to move toward a ZNC home?
Additional ways to move towards a ZNC home include:

For more information or questions on Electrify San José, please email .