Same Hot Water for Less Money
Benefits:
- Lower energy bills
- Healthier living spaces
- More energy efficient and climate smart
- Incentives to lower installation costs
How it Works
Heat pump water heaters move heat rather than make heat. It’s like a reverse refrigerator. While a refrigerator pulls heat from inside a box and dumps it into the surrounding room, a heat pump water heater pulls heat from the surrounding air and transfers it at a higher temperature into the tank to heat your water.
Heat pump water heaters are 3 times more energy efficient than gas water heaters because they move heat while gas water heaters create heat via combustion. They also typically last 13-15 years while conventional water heaters need to be replaced every 8-12 years. They can also help customers avoid peak energy charges by heating water during parts of the day with lower electricity prices and keep that warm water stored until it is needed.
Average Project Costs
The average project costs in San Jose (including equipment, installation, and permits) can be as low as $3,000-$4,000 before incentives. After incentives (BayREN rebate and Inflation Reduction Act tax credit) the cost can be as low as $1,500-$2,000. Switching to a heat pump water heater also has the benefit of more than $100 per year in energy bill savings.
If an electrical panel upgrade is needed, project costs can be $5,000-$6,000 before incentives.
Rebates and Incentives
For Homeowners
BayREN
BayREN $400 rebate for single family homes built in 2016 or earlier (must work with a BayREN participating contractor)
Inflation Reduction Act (IRA) – Rewiring America
Claim 30% of project costs up to $2,000 with the Inflation Reduction Act tax credit
Golden State Rebate
Get a $500 Rebate (water heater must be purchased from a participating distributor)
For Contractors
BayREN
BayREN has a $400 incentive for contractors who install a heat pump water heater
Bill Savings
A PG&E review of customer bills found that switching from a gas to heat pump water heater resulted in $122 bill savings per year.
Heat pump water heaters can also help customers avoid peak energy charges. They can heat your water during parts of the day with lower electricity prices and keep that warm water stored until it is needed.
Permits and Installation Considerations
Permits
More information on specific permit requirements coming soon.
Installation Location
The Northwest Energy Efficiency Alliance (NEEA) sets forth specifications for heat pump water heaters. Heat pump water heaters that comply with NEEA’s Advanced Water Heater Specification of Tier 3 or higher may be located in a garage, basement, or other conditioned space.
- Heat pump water heaters draw air from the room to heat the water. The space or room must be at least 10x10x7 (700 cubic feet) or, if the room is smaller, there must be a door with a louvered panel with the panel at least 2’ x 3’ in size, to allow air to freely pass into the room. This also applies to accessory dwelling units (ADUs).
- Condensate must drain to an approved plumbing fixture or to a drywell.
- If the existing electrical service panel is not adequate for the added load, please see Bulletin #260 on Electrical Service Panel Upgrades
Finding a Contractor
We recommend residents follow these best practices when selecting any contractor, including contractors provided on the list below.
- Check licenses 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
Vetted Contractor List
Visit the Bay Area Regional Network (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.
