According to the California Air Resources Board,  85 percent of on-site building emissions come from space and water heating and cooling. Heat pumps are key to decarbonizing buildings and achieving both San José and California's zero-carbon goals.

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, the technology works like a refrigerator in reverse. While a refrigerator pulls heat from inside a box and dumps it into the surrounding room, a stand alone 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.

Incentives and rebates

Rebates are available from a variety of sources including BayREN, TECH and through the Inflation Reduction Act (IRA) for homeowners and contractors. Rebates often can be layered - meaning they can be used together to reduce the total cost. Find more information on available rebate programs and incentives here. 

Tips for finding a Contractor

Regional organizations publish lists of approved contractors to participate in their respective building electrification rebate programs. Please note that the City does not endorse or recommend any particular vendor and that the following lists provided below are not exhaustive.

• Bay Area Regional Energy Network (BayREN)
• TECH Clean California
• The Switch is On

When selecting a contractor, including contractors provided on the list above: 

• Check a contractor license with the California Contractors State License Board
• Check complaints and litigation history with the Better Business Bureau
• Interview and request quotes from at least 3 contractors
• Ask for three references who can speak to the quality of services provided

Resources AND trainings

Contractor Trainings 

Free trainings are available for contractors to learn more about technology features and benefits, appropriate applications, energy efficiency comparison to other water heater types, installation techniques and best practices, service support and warranty, proper maintenance, troubleshooting, and selling strategies. Visit the Education Programs webpage for upcoming and recorded trainings including our 2023 Home Electrification Webinar Series. For other current training opportunities visit:

• Association for Energy Affordability (AEA)'s Electrification Knowledge Hub
• BayREN List of Trainings: Upcoming, Past and On Demand
• TECH Clean California Contractor Trainings and Resources

Frequently Asked Questions (FAQ)

 Building Electrification FAQs

For more information or questions, email climatesmart@sanjoseca.gov.