SV Clean Energy Heat Pump Water Heater Rebate Program Reaches New Milestone

SV Clean Energy Heat Pump Water Heater Rebate Program Reaches New Milestone

Program participants report positive experience with switch to efficient, electric water heaters

10/20/2021 – To reduce local emissions, Silicon Valley Clean Energy (SVCE) provides rebates to customers who replace gas water heaters with efficient, electric Heat Pump Water Heaters (HPWHs). The FutureFit HPWH program has now helped fund the installation of more than 200 HPWHs. Additional rebate funding is also available for customers who need a panel upgrade to support the switch to electric water heating and can prepare them for further home electrification.

Most existing homes in the Bay Area have water heaters that run on natural gas, which accounts for approximately half of a home’s carbon emissions. Heat pump water heaters are powered with clean electricity instead of burning gas, making them a cleaner and safer choice. HPWHs move heat from the outside air to heat water, making them more than three times as efficient as traditional electric resistance water heaters.

Phase One of the FutureFit HPWH program launched in 2019 with grant funding support from the Bay Area Air Quality Management District. The rebate offered $3,500 for customers switching from gas to electric and included an additional $1,500 for income-qualified customers. The program also provided $1,500 if a panel upgrade was needed. Participating customers also received a whole-home monitoring device for tracking their electricity usage.

Phase One was fully subscribed within 18 months of launch with 102 HPWH installations. The FutureFit HPWH Phase One program evaluation, a summary of the methodology and results can be found here, results include a reduction of 96.6 metric tons of carbon dioxide over the life of the HPWHs. Nearly 60 local contractors engaged with Phase One and reported it being the first, or among the first, of their experiences with HPWH technology. The program evaluation also found that including incentives for panel upgrades had a similar cost effectiveness to incentivizing HPWHs because recipients pursued additional electrification on their own (e.g. replacing a natural gas furnace with a heat pump).

“The Air District funded this rebate program to accelerate the switch from fossil fuels to cleaner technology to protect both the climate and the health of people living in the Bay Area,” said Jack Broadbent, executive officer of the Bay Area Air Quality Management District. “Natural gas combustion not only produces greenhouse gases, it is a source of harmful air pollutants. This program helps even the playing field for cleaner technologies by making them an affordable choice for all.”

Based on the success of Phase One, SVCE launched Phase Two in 2020 to continue encouraging all-electric HPWH installations, drive market demand, and increase contractor and consumer awareness around the technology. Phase Two has seen a higher program enrollment rate, reaching 100 installations in 14 months, despite the rebate amount being lower than Phase One. Phase Two rebates offer a $2,000 rebate for replacing a gas water heater, and an additional $1,500 available for income-qualified customers and those who need an electrical panel upgrade. This program installment also offers a rebate to customers switching from an electric resistance water heater to a more efficient, HPWH.

“This rebate allowed me to replace my very old gas water heater with a new heat pump water heater and upgrade the electric panel that enabled additional home electrification,” said Maria, a Los Gatos resident.

Silicon Valley Clean Energy’s Decarbonization Strategy & Programs Roadmap recognizes the importance of accelerating high-efficiency, all-electric new construction and retrofits to achieve emissions reductions in the built environment. On average, nearly half of a home’s fossil fuel emissions come from natural gas-powered water heaters, so switching from a gas to an all-electric HPWH immediately reduces carbon emissions in the community.

“Fuel switching from natural gas to all-electric is an important step for our communities in the transition to a clean, healthy future,” said Mountain View Councilmember and SVCE board chair Margaret Abe-Koga. “This was the first consumer-facing program for SVCE, and we are very pleased to see that it has considerable uptake from community members who want to do their part in the fight against climate change and reduce carbon emissions for years to come.”

The FutureFit HPWH rebate still has funding available, for more information or to apply, visit

About Silicon Valley Clean Energy

Silicon Valley Clean Energy is a not-for-profit, community-owned agency providing clean electricity from renewable and carbon-free sources to more than 270,000 residential and commercial customers in 13 Santa Clara County jurisdictions. As a public agency, net revenues are returned to the community to keep rates competitive and promote clean energy programs. Silicon Valley Clean Energy is advancing innovative solutions to fight climate change by decarbonizing the grid, transportation, and buildings. Learn more at

Media Contact: 
Michaela Pippin,, 408-721-5301 x1020