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Electrify San José Rebates

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 again on a first-come, first serve basis. Please see "How to Receive A Rebate" and submit a fully completed rebate reservation application. For a list of completed project costs and remaining rebates available, please see the public reservation tracker.

For additional savings, you may stack the Electrify San José rebate with BayREN Home+'s $1,000 heat pump water heater rebate. Although you may work with any licensed contractor for the Electrify San José program, BayREN requires you to work with one of their participating contractors. Please plan accordingly. Contact an Energy Advisor at 866-878-6008 or to choose one of their participating contractors and to learn more.

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 Receive a Rebate

  1. Contact a contractor to receive an estimate. You may work with any contractor with a valid and current California Contractors State License Board. If you need help finding one, see the resources under "Selecting a Contractor."
  2. Reserve Your Rebate by submitting an Electrify San José Rebate Reservation Application packet. You will be notified within three (3) business days if your reservation has been approved.
  3. Review heat pump water heater installation requirements and get building permits from the San José Permit CenterInstall the qualifying product within 90 days of the reservation approval. 
  4. Request Your Rebate once the product is installed by submitting the Electrify San Jose Post-Installation Application packet. You will be notified if your rebate has been approved and the contractor will be provided with the rebate.

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

Here's a list of participating contractors who responded to the RFI. The City does not endorse or recommend any contractor. 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.

The Bay Area Regional Network (BayREN) provides regional-scale energy efficiency programs and services to reduce carbon emissions and promote healthy, energy-efficient buildings and homes. BayREN is implemented by local county governments and vets and approves contractors. Visit the BayREN website to find a participating heat pump water heater contractor in Santa Clara County. The City does not endorse or recommend any particular vendor.


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. 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