California Heat Pump Rebates 2026: What's Still Available After Federal 25C Expired

The landscape has shifted — here’s what actually matters in 2026

Two things happened in early 2026 that every California homeowner shopping heat pumps needs to know before calling a contractor: the federal Energy Efficient Home Improvement Credit (Section 25C) expired on December 31, 2025, and TECH Clean California’s single-family heat pump HVAC incentives hit their funding cap in November 2025. Neither program is accepting new reservations.

That sounds grim. It isn’t — or at least, the full picture is more complicated than those two headlines suggest.

California still has a multi-layer incentive stack that can meaningfully reduce your out-of-pocket cost on a heat pump installation. The HEEHRA single-family waitlist through the California Equitable Building Decarbonization (EBD) program matters most for lower- and moderate-income households. Utility-specific programs from SMUD, SDG&E, LADWP, and others are still operating with their own rebate structures. And if you’re replacing a whole-home gas furnace or a central air conditioner with a qualifying heat pump, there are timing and permit considerations that affect which future rebate cycles you’ll be positioned for.

This page walks through the current state of every program, what each offers (or offered), who qualifies, and how the incentives interact. We’ll show two worked examples — one for a moderate-income Sacramento household and one for a lower-income Fresno household — so you can see how the math changes depending on your income band and utility territory.

One honest note before we go further: both the federal 25C credit and TECH Clean California’s primary heat pump HVAC fund are closed to new applicants as of this writing. If you’re reading this page to find out whether you can claim 25C on a 2025 installation — the answer is yes, but only for systems placed in service by December 31, 2025. For 2026 installations, that credit is gone. We’ll be specific throughout about what’s open, what’s reserved, and what’s on a waitlist.

The programs, walked through one by one

TECH Clean California

TECH Clean California was the state’s flagship equipment incentive program — run by a statewide administrator on behalf of California’s major utilities, it paid direct rebates to contractors for qualifying heat pump HVAC, heat pump water heaters, and related electrification equipment. The incentives flowed to homeowners at point of installation, reducing the contractor’s invoice rather than requiring a separate rebate application.

Current status for heat pump HVAC (single-family): Fully reserved. As of November 14, 2025, TECH Clean California closed new reservations for single-family heat pump HVAC installations statewide. That date marked the last day contractors could create new reservations in the program system. No waitlist exists for heat pump HVAC — unlike the water heater program, which maintained a formal waitlist.

What the tiers looked like (for historical context and for planning if the program reopens):

Market Rate (all income levels):

• $1,000–$1,500 per unit, depending on the prior HVAC technology being replaced

Equity Rate (household income at or below 80% of Area Median Income, or at or below 250% of Federal Poverty Level):

• $3,500–$4,000 per unit — a substantially higher tier designed to offset the larger financial barrier for lower-income households

The equity rate distinction matters: income-qualified households were eligible for roughly 2.5–3x more per unit than market-rate applicants. Understanding this structure is useful for reading the HEEHRA program below, which uses similar income-tiering logic.

TECH Clean HEEHRA (single-family): The HEEHRA rebates administered through TECH Clean California — funded by the federal Inflation Reduction Act and passed through California’s state plan — are separately tracked from the standard TECH Clean equipment incentives. These also hit their funding cap: statewide single-family HEEHRA reservations were fully reserved as of February 24, 2026. A waitlist now exists. Waitlisted projects are only eligible for a HEEHRA rebate if the heat pump is installed after the reservation is approved — meaning you can’t work backward and claim a waitlist rebate on a system you already installed.

Multifamily HEEHRA: Per our last verification (2026-05-24, source: techcleanca.com), the most recent program update on TECH Clean California’s site is dated April 11, 2025 — at which point pre-applications were being processed and funding remained available in all regions. We could not confirm a more current status update from primary sources. Multifamily program status changes more frequently than single-family — verify directly via TECH Clean’s program page before assuming current eligibility.

California Equitable Building Decarbonization (EBD) Program

The California Energy Commission administers the EBD program, which is the state-level vehicle for distributing Inflation Reduction Act HEEHRA funding. The EBD program has three components:

1. Statewide Direct Install Program — for low- and moderate-income households; covers direct installation of heat pumps and other electrification equipment at little or no cost to the homeowner
2. Tribal Direct Install Program — serves tribal communities specifically
3. Statewide Incentive Program — offers loan loss reserves and interest rate buy-downs to make financing more accessible

The Direct Install component is the most relevant for individual homeowners. Unlike the rebate-plus-invoice structure of TECH Clean, Direct Install programs typically send a program-vetted contractor to assess and install equipment, with the homeowner paying little or nothing upfront. Eligibility is income-based.

Important caveat: The CEC’s program page does not publish specific dollar amounts or AMI thresholds for the EBD Direct Install Program. For current enrollment, income eligibility details, and a list of participating utilities administering the program in your area, contact the CEC directly at equitablebuildingdecarb@energy.ca.gov or check your utility’s website. Eligibility varies by utility territory and income band — see the source link in our sources section for the program contact.

SMUD (Sacramento Municipal Utility District)

If you’re in Sacramento County or adjacent SMUD territory, the picture is more concrete. SMUD operates its own rebate program independently of the TECH Clean/IOU structure.

Heat pump HVAC rebate: Up to $3,000 for qualifying systems. To qualify:

• Install a two-stage package system with a minimum 15.2 SEER2 rating, or
• Install a variable-stage electric heat pump HVAC system

Installation must be completed by a contractor in the SMUD Contractor Network. Using a contractor outside that network disqualifies the rebate — this is a common gotcha for homeowners who hire a well-reviewed general HVAC contractor without checking SMUD enrollment first.

Heat pump water heater rebate: Up to $4,000 for NEEA Tier III or IV heat pump water heaters with a Uniform Energy Factor (UEF) of 2.87 or higher. Same Contractor Network requirement.

SMUD’s program is not income-tested at the standard tier — the rebates are available regardless of household income for qualifying equipment. SMUD also offers separate low-income assistance programs, but those have separate enrollment requirements.

PG&E and SCE (Pacific Gas & Electric, Southern California Edison)

PG&E and SCE serve the largest share of California’s IOU (investor-owned utility) residential customers. Both utilities have historically offered heat pump rebates layered on top of TECH Clean incentives.

Note on current availability: PG&E and SCE’s rebate program pages returned access errors when we verified sources for this page (May 2026). We are not publishing specific dollar amounts for PG&E or SCE rebates because we could not confirm current figures from primary sources. Before installing a heat pump in PG&E or SCE territory, check each utility’s current rebate portal directly — programs and amounts change frequently, and figures from 2024–2025 may not reflect what’s available today.

SDG&E (San Diego Gas & Electric) and LADWP (Los Angeles)

San Diego (SDG&E territory) and Los Angeles (LADWP territory) have their own rebate programs. SDG&E is an IOU like PG&E and SCE; LADWP is the nation’s largest municipal utility and operates entirely separately from the IOU rebate structure.

For both utilities, check your specific utility’s rebate portal. Neither SDG&E nor LADWP pages were accessible during our verification check, so we cannot confirm current amounts. This is a known limitation — both sites have historically blocked automated access. Call or visit the portal directly.

Federal 25C — expired for 2026 installations

The IRS Energy Efficient Home Improvement Credit (Section 25C) allowed homeowners to claim up to $2,000 per year for qualifying heat pump installations. The credit was nonrefundable (you had to have federal tax liability to claim it) and required the heat pump to meet the CEE (Consortium for Energy Efficiency) highest efficiency tier in effect at the start of the year.

The credit expired on December 31, 2025. The IRS confirms that the credit applies only to qualifying property placed in service before December 31, 2025. There is no extension on record as of this writing.

If you installed a qualifying heat pump in 2023, 2024, or 2025 and haven’t yet claimed the credit on your taxes, you can still claim it on the relevant year’s return. A 2025 installation is claimable on your 2025 return (filed in spring 2026). The 2025 installments had an additional requirement: the equipment must have been produced by a qualified manufacturer and you must report the Qualified Manufacturer Identification Number (QMID) on your return.

Incentive stack table

Here’s the current state of every California program in one view:

Worked example: moderate-income Sacramento household

Scenario: A Sacramento homeowner with a household income of $90,000 replacing a gas furnace with a 36k BTU multi-zone heat pump in a 1,800 sq ft single-family home. They’re in SMUD territory.

Equipment: Variable-stage mini-split multi-zone system, 15.2 SEER2 or above. This qualifies for SMUD’s heat pump HVAC rebate.

Install cost (estimate): $14,000–$18,000 for a quality 36k BTU multi-zone system including labor, permits, and electrical work in Sacramento. We’ll use $16,000 as a working midpoint.

Income context: Sacramento County’s 4-person median family income is in the range of $100,000–$105,000 (per HUD tables). At $90,000, this household falls at roughly 85–90% of AMI — solidly within the HEEHRA moderate-income tier (80–150% AMI). Contrary to what older content about this program sometimes implies, a $90k Sacramento household is not above the HEEHRA income ceiling. They qualify.

Available incentives in May 2026:

• Federal 25C: $0 — credit expired December 31, 2025.
• TECH Clean HVAC rebate: $0 — program closed to new reservations November 14, 2025.
• TECH Clean HEEHRA (moderate-income tier, 80–150% AMI): This household qualifies for the HEEHRA moderate-income tier, which covers up to 50% of project costs, up to $4,000, for heat pump HVAC. However, TECH Clean HEEHRA (administered statewide through TECH Clean California, including for SMUD-territory residents) is waitlisted as of February 24, 2026. The program is not taking new reservations. Waitlisted projects are only eligible if the heat pump is installed after the reservation is approved — you cannot retroactively claim a waitlist rebate on a system already installed. For a multi-zone 36k BTU system, the eligible amount would be approximately $4,000 if the program were taking new reservations today. That makes it a meaningful “maybe next funding round” bonus — not a guarantee.
• SMUD heat pump rebate: Up to $3,000 — requires a SMUD Contractor Network installer and a qualifying variable-stage or two-stage 15.2 SEER2+ system. This is the only confirmed active rebate available to this household today.

Net cost after confirmed rebates:

• Install cost: $16,000 (midpoint estimate)
• SMUD rebate: −$3,000
• Out-of-pocket today: $13,000

If HEEHRA waitlist clears before installation:

• SMUD rebate + HEEHRA moderate tier: −$3,000 + −$4,000 = −$7,000
• Out-of-pocket if HEEHRA approves: $9,000

This is significantly less favorable than the 2024–2025 window when TECH Clean and federal 25C were both available and flowing. A comparable install in 2024 could have combined the SMUD rebate ($3,000) + TECH Clean market-rate incentive (~$1,500) + federal 25C ($2,000), bringing the effective cost down by $6,500 from day one — with no waitlist. That window is closed.

The framing flip for 2026: even moderate-income California households can no longer stack 25C + state + utility in a single installation. Plan for the SMUD rebate as the only sure thing today; treat TECH Clean HEEHRA as a potential bonus when the next funding round opens, expected in mid-to-late 2026.

The practical takeaway: If you’re in SMUD territory at moderate income, verify your contractor is in the SMUD Contractor Network before signing any contract. Get on the HEEHRA waitlist now if you haven’t started the installation — that positions you to capture the rebate when funding reopens, rather than having to start over.

Worked example: lower-income Fresno household

Scenario: A Fresno household of 4 with a combined income of $45,000, renting from a landlord who owns the unit. The household is in PG&E territory (Central Valley).

This scenario illustrates two important intersections: income qualification and renter status.

Income context: Fresno County’s 80% AMI for a household of 4 was approximately $63,000 in 2024 (AMI thresholds are published annually by HUD and vary by county; check current figures before applying). At $45,000, this household is well below 80% AMI and would have qualified for TECH Clean’s equity tier — the $3,500–$4,000 rebate bracket — had the program still been accepting reservations.

The renter problem: TECH Clean California rebates, HEEHRA rebates, and most utility rebate programs flow through the homeowner or the homeowner’s contractor, not the renter. As a tenant, this household cannot independently apply for equipment rebates on the rental unit. The landlord would need to be the applicant — and the landlord’s income is irrelevant to the equity tier qualification (the tenant’s income is what matters for the rebate tier, but the landlord must initiate the application).

What’s actually available:

• PG&E territory rebates: We could not confirm current PG&E rebate amounts. The household should check pge.com/rebates directly.
• CA EBD Direct Install Program: This program is designed for exactly this income profile — low-income households receiving direct installation at no cost. However, the renter constraint applies here too. The landlord must engage with the program unless the utility territory has a specific tenant pathway. Contact the CEC at equitablebuildingdecarb@energy.ca.gov to ask whether the Direct Install program has a tenant request pathway in PG&E territory.
• TECH Clean HEEHRA (waitlist): Fully reserved and waitlisted. Even if the reservation were approved, the installation must happen after reservation approval — and the landlord would need to be the contracting party.

Bottom line: Lower-income renters face the sharpest access barrier. The programs designed to help them the most (TECH Clean equity tier, HEEHRA) are currently closed or waitlisted, and the renter-owner gap means tenants can’t trigger rebates independently. The best near-term avenue is the CA EBD Direct Install Program — ask your utility if they’re administering it in your territory, and work with your landlord to initiate an application.

Eligibility gotchas unique to California

The SMUD Contractor Network requirement. SMUD’s rebate is only valid if the installation is completed by a contractor enrolled in the SMUD Contractor Network. This is non-negotiable — SMUD verifies contractor enrollment before processing rebates. Before signing a contract with any HVAC company in Sacramento, search the SMUD Contractor Network on smud.org. A highly rated company that isn’t enrolled costs you $3,000.

AMI thresholds vary dramatically by county. Bay Area counties (San Francisco, Santa Clara, Marin) have some of the highest AMI figures in the country — 80% AMI for a family of 4 in San Francisco County can be $100,000 or above. In the Central Valley (Fresno, Kings, Tulare), 80% AMI for the same family size can be $55,000–$65,000. The equity tier eligibility for TECH Clean and HEEHRA is tied to the county where the home is located, not a statewide threshold. If you’re on the income borderline, verify the current HUD AMI table for your specific county before assuming you qualify for the equity tier.

Title 24 and California permitting. California’s Title 24 Building Energy Code requires permits for most HVAC replacement work, including mini-split systems above a certain capacity. Non-permitted installations can forfeit rebate eligibility — rebate program administrators typically ask for permit documentation during the verification phase. Check with your local building department and confirm your contractor pulls the appropriate permit. Homeowners sometimes choose unpermitted installs to save money on permit fees; this is a false economy when a $3,000 rebate is on the line.

The installer approval chain is complex. Unlike a simple manufacturer rebate, TECH Clean California required contractors to be enrolled in the program and to create reservations through the program’s portal before installation. Homeowners couldn’t apply after the fact — the contractor had to initiate the process. This “contractor-first” model catches homeowners off guard when they try to retroactively claim a rebate on a system their non-enrolled contractor already installed.

The 2025 25C QMID requirement. If you’re filing a 2025 tax return and claiming the 25C credit for a 2025 installation, you must include the Qualified Manufacturer Identification Number (QMID) for the equipment on your return. Not all systems have QMID data available — verify with your manufacturer or contractor before claiming the credit. An equipment model without a QMID disqualifies the credit for that year’s installation.

Utility territory boundaries are not always obvious. Sacramento County is primarily SMUD territory, but some pockets are served by PG&E. Fresno is PG&E territory, but specific rural parcels may be on different service. Your utility territory determines which utility rebates you can access. Call your electric utility directly or enter your address on the utility’s service territory map.

Eligible product picks by California climate region

California spans six IECC climate zones. The right system for a coastal ADU is a different spec from a Sierra foothill whole-home retrofit. Here’s how we’d match equipment to each major subregion:

Coastal California (zones 3C, 4C) — mild year-round

The Bay Area, Los Angeles coast, and San Diego coastline rarely see sustained subfreezing temperatures. Cooling loads are modest; the primary heating challenge is damp winters with temperatures in the 40s. A single-zone system sized appropriately for the space is often sufficient for an ADU, converted garage, or primary bedroom addition.

For coastal retrofits, the Mr Cool DIY 24k hits the sweet spot between capacity and flexibility. At 24,000 BTU, it covers 700–1,000 sq ft in coastal California’s mild climate, and the DIY lineage means licensed electricians can handle the refrigerant pre-charged line sets without a specialty refrigerant technician on site.

Central Valley (zone 3B) — hot summers, mild winters

The Central Valley — Sacramento, Fresno, Bakersfield, Stockton — runs cooling loads that dwarf coastal California. Summer temperatures above 100°F are normal for weeks at a time. A whole-home replacement for a 1,600–2,000 sq ft house typically needs 30k–36k BTU of capacity to handle peak cooling demand without cycling constantly.

The Mr Cool DIY 36k is the right class for a Central Valley whole-home retrofit. Multi-zone configurations let you assign separate handlers to different rooms or zones, so you’re not cooling an empty guest room to the same setpoint as the living room. This is the system class most relevant to the Sacramento worked example above.

Sierra Nevada / mountain zones (zone 5B) — cold winters required

The Sierra Nevada foothills and mountain communities (South Lake Tahoe, Mammoth, Truckee, Grass Valley) see sustained cold snaps that exceed the performance envelope of standard mini-splits. You need an extended-cold-climate rated system — one that’s spec’d to maintain capacity and COP at temperatures well below 0°F.

The Mr Cool Hyper 18k is engineered for cold-climate operation and is sized for a single zone like a primary bedroom, home office, or a small cabin. For whole-home coverage at altitude, stack multiple units rather than over-sizing a single outdoor unit — multi-head configurations allow independent zone control and are easier to maintain.

What changes after mid-2026

TECH Clean California’s single-family HVAC fund is currently exhausted, but the program is not permanently over. TECH Clean operates on funding cycles tied to California’s Greenhouse Gas Reduction Fund and utility investments. When — not if — a new funding tranche is authorized, the equity rate tier will likely be the first to reopen, with income-tested households at the front of the queue.

The HEEHRA waitlist is the more actionable near-term item. If you qualify for the waitlist and your installation is pending, the approval window matters: you must install after your reservation is approved to receive the rebate. Monitoring your waitlist position and staying in contact with the program administrator is worth the effort if you’re in the equity tier income band — the $3,500–$4,000 rebate is meaningful.

On the federal side, 25C’s expiration was a policy decision, not a funding exhaustion. Future Congressional action could reinstate or expand the credit. We’ll update this page when we have confirmed legislative changes. For now, plan your 2026 installation around state and utility programs rather than a federal credit.

For everyone: check the primary program sources directly before making any installation decision. Rebate funding can open and close within weeks when a new tranche is authorized. The most current figures will always be at techcleanca.com, your utility’s rebate portal, and the California Energy Commission’s EBD program page.

Related

Tools and guides:

• BTU sizing calculator — size the system before specifying any equipment; California’s six climate zones can swing the right BTU class by 50% for the same square footage.
• DIY mini-split installation guide — step-by-step on the install process for permit-eligible systems.
• Federal heat pump rebates — 25C history, the 2025 cutoff, and how the federal pool stacked with state programs while it was active.

Other state rebate pages:

• New York heat pump rebates — NY Clean Heat, Con Edison $8–10k air-source, EmPower+ for low-income.
• Massachusetts heat pump rebates — Mass Save up to $10k, HEAT Loan, the Home Energy Assessment gate.
• Texas heat pump rebates — Austin Energy’s published tiers, SECO HEAR planning status, deregulated-market gotchas.
• Washington heat pump rebates — Pacific Northwest utility programs, climate-zone considerations, cold-climate spec requirements.

Frequently asked questions

Can I still claim the federal 25C credit for a heat pump I installed in 2025?

Yes — if the system was placed in service (fully installed and operational) by December 31, 2025, you can claim up to $2,000 on your 2025 tax return. For 2025 installations, you also need to report the Qualified Manufacturer Identification Number (QMID) provided by the equipment manufacturer. The credit is nonrefundable, meaning it reduces your tax bill but doesn’t generate a refund if the credit exceeds what you owe. If you installed in 2025 and your tax liability is zero, you won’t benefit from the credit.

Does TECH Clean California require a Program-Approved Installer?

Yes. TECH Clean California’s rebates flowed through enrolled contractors, not directly to homeowners. To have received a TECH Clean rebate, your contractor had to be enrolled in the program and had to create a reservation in the system before your installation date. Homeowners could not apply after the fact. This means that if a contractor told you they’d “handle the rebate paperwork” after installation, verify that they created a reservation before the program closed — otherwise there is no rebate to recover.

What if I’m a renter? Can I apply for any of these rebates?

Not directly. Heat pump rebate programs in California run through the property owner, not the tenant, because the equipment becomes part of the property. As a renter, your best path is the California EBD Direct Install Program, which has a low-income focus and may have a tenant request pathway in some utility territories. Contact the CEC at equitablebuildingdecarb@energy.ca.gov to ask about your specific utility area. Beyond that, you can ask your landlord to initiate an application — frame it as a shared benefit (lower utility bills can benefit both parties).

How long does a HEEHRA rebate take to arrive after installation?

Because California’s single-family HEEHRA rebates were administered through TECH Clean as a point-of-sale or post-installation credit through the contractor, the timing varied by contractor and region. The key constraint now is that the program is waitlisted — any timing question depends on when your reservation is approved, and the installation must happen after that approval. For any new HEEHRA reservation inquiry, contact TECH Clean’s program administrator at TECH.info@energy-solution.com.

My utility is SMUD, SDG&E, or LADWP — not PG&E or SCE. Where do I go?

Each utility has its own rebate program:

• SMUD (Sacramento): Visit smud.org and look for the Rebates for My Home page. SMUD’s heat pump HVAC rebate (up to $3,000) is currently confirmed active. Use the SMUD Contractor Network search to find eligible installers.
• SDG&E (San Diego): Visit sdge.com/rebates for current programs. We were unable to confirm current amounts at time of writing — check directly.
• LADWP (Los Angeles): Visit ladwp.com for current rebates. LADWP operates independently of the IOU structure and has its own electrification incentive programs. Check directly for current amounts and eligibility.