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With California’s aggressive push to eliminate gas-powered appliances, heat pump water heaters (HPWH) have become a top priority in statewide electrification plans. These high-efficiency systems use electricity to move heat instead of generating it directly, cutting energy use by up to 65%.
And the best part? In 2025, you can get $3,000–$6,000 back in stackable rebates and federal tax credits. In this blog we will break down top 5 most rewarding rebates in San Jose.
Program: Inflation Reduction Act (IRA), Section 25C
Rebate: 30% of cost, up to $2,000
Applies To: ENERGY STAR® certified heat pump water heaters
Effective: 2023–2032
Claim Method: IRS Form 5695 on your tax return
ENERGY STAR official tax credit page
Rebate: Up to $3,100
Program Type: State-funded electrification incentive
Stackable With: PG&E, Golden State Rebates, local utility programs
TECH Clean California HPWH program
Rebate: $500–$1,000 (varies by utility and location)
Program Type: Utility-sponsored rebates for high-efficiency appliances
Utilities Covered: PG&E, SCE, SoCalGas, Liberty, Bear Valley Electric
Golden State Rebates – Check eligibility by ZIP
Rebate: $500–$1,000 (often funneled through Golden State Rebates or TECH Clean CA)
Utility: PG&E (Pacific Gas & Electric)
Bonus: Up to $1,000 extra available if electrical panel upgrade is required and bundled through TECH
Rebate:
City: Available only to San José residents
San José Clean Energy Electrification Rebates
Rebate:
Cities Served: Sunnyvale, Cupertino, Mountain View, Los Altos, Saratoga, Morgan Hill, Gilroy, and more
Rebate Program | Max Amount |
---|---|
Federal Tax Credit (IRA) | $2,000 |
TECH Clean California | $3,100 |
Golden State Rebates | $1,000 |
PG&E (stacked w/above) | Varies |
San José Clean Energy (SJCE) | $2,000 + $500 |
Silicon Valley Clean Energy (SVCE) | $2,000 + $1,000 |
Stack total: Up to $6,000+ possible in combined incentives.
We specialize in heat pump water heater installations that qualify for every available incentive. We’ll:
Get your rebate estimate and quote today
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California homeowners can receive up to $6,000 in combined rebates and tax credits in 2025. This includes:
$2,000 federal tax credit
Up to $3,100 from TECH Clean California
$500–$1,000 from Golden State Rebates or your utility (e.g., PG&E)
Additional rebates from SJCE or SVCE (up to $2,000 plus bonus for panel upgrades)
To qualify:
You must install an ENERGY STAR-certified heat pump water heater
It must be in your primary residence
The installation must occur between 2023–2032
File IRS Form 5695 with your federal return
Applies to existing homes only, not new construction
Yes! You can stack rebates from:
TECH Clean California
Golden State Rebates or PG&E
Local programs like SJCE or SVCE
Federal tax credits
Example: If you’re in San Jose, you could combine a $3,100 TECH rebate with a $2,000 SJCE rebate and the $2,000 federal credit (subject to limits).
To qualify, the unit must:
Be ENERGY STAR® certified
Have a UEF rating of at least 3.1
Be installed by a licensed contractor
Replace a gas or electric resistance water heater
Be installed with permits and inspection approval
Here’s a quick overview:
Federal Tax Credit: Claim on your tax return using Form 5695
TECH Clean California: Work with a TECH-enrolled contractor (they apply for you)
Golden State Rebate: Submit online with receipts and permit documentation
SJCE/SVCE: Apply via their official rebate portals after project completion
Not always. But if your existing panel doesn’t support a heat pump water heater, some programs offer additional rebates (e.g., $500 from SJCE or $1,000 from SVCE/TECH) to help cover upgrade costs.
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