Bay Area HVAC Rebates & Incentives Guide: Save Thousands in 2024-2025

Why Rebates Matter Now More Than Ever

Between federal, state, and utility incentives, Bay Area homeowners can potentially save 30-50% on qualified HVAC upgrades. These incentives won't last forever, making now an excellent time to upgrade.

Federal Tax Credits (Inflation Reduction Act)

Heat Pumps: 30% Tax Credit

What Qualifies:

• Air-source heat pumps (including mini-splits)
• Must meet efficiency requirements (SEER2 16+, HSPF2 8.1+)

The Credit:

• 30% of total project cost
• Maximum $2,000 per year
• Includes installation labor

Example: $12,000 heat pump installation = $2,000 tax credit

Central Air Conditioning: 30% Tax Credit

What Qualifies:

• Central AC meeting SEER2 16+ requirement
• Must be primary residence

The Credit:

• 30% of project cost
• Maximum $600 per year
• Can combine with other credits same year

Furnaces: 30% Tax Credit

What Qualifies:

• Gas furnaces 97%+ AFUE

The Credit:

• 30% of project cost
• Maximum $600 per year

How to Claim

1. Save all receipts and manufacturer specifications 2. File IRS Form 5695 with your tax return 3. Credit reduces tax owed dollar-for-dollar

Important: These are TAX CREDITS, not deductions. $2,000 credit = $2,000 off your tax bill.

PG&E Rebates

Heat Pump Water Heater Rebates

• Up to $1,000 for qualifying heat pump water heaters
• Additional $2,500 for income-qualified customers

Central AC/Heat Pump Rebates

PG&E offers rebates for qualified equipment:

• Varies by efficiency level
• Check pge.com for current offers
• Often $100-800 depending on system

Home Energy Checkup

• Free or low-cost professional energy audit
• Identifies efficiency opportunities
• Often required for maximum rebates

BayREN (Bay Area Regional Energy Network)

Home+ Rebate Program

For Comprehensive Upgrades:

• Combination of insulation + HVAC + air sealing
• Rebates based on energy savings achieved
• Can stack with other incentives

Typical Rebates:

• $500-2,000 for HVAC upgrades
• Additional $1,000+ for insulation
• Performance bonuses for verified savings

Single Family Program

• Free home energy assessment
• No-cost basic improvements
• Contractor guidance and rebate processing assistance

Silicon Valley Clean Energy (SVCE) / Other CCAs

If your city is served by a Community Choice Aggregator, additional rebates may apply:

• Check your specific CCA website
• Often $500-1,500 for heat pump upgrades
• Some offer point-of-sale rebates (instant discount)

TECH Clean California

Heat Pump Incentives

For Switching from Gas to Heat Pump:

• Up to $4,000 for heat pump HVAC
• Up to $4,000 for heat pump water heater
• Administered through contractors

Requirements:

• Must replace gas equipment with heat pump
• Equipment must meet efficiency requirements
• Installed by participating contractor

Income-Qualified Programs

LIWP (Low-Income Weatherization Program)

• Free HVAC replacement for qualifying households
• Includes insulation and air sealing
• Income limits apply

PG&E CARE/FERA Customers

• Enhanced rebates available
• Priority for energy efficiency programs
• Lower income requirements than LIWP

ESA Program (Energy Savings Assistance)

• Free weatherization services
• No-cost HVAC repairs and replacement in some cases
• Income-qualified

Stacking Rebates: Maximum Savings Example

Scenario: Replace 20-year-old AC and furnace with heat pump

IncentiveAmount

Federal Tax Credit (30%)$2,000 TECH Clean California$3,000 PG&E Rebate$500 BayREN Performance$800 Total Incentives$6,300

On a $14,000 project, that's 45% savings!

How to Maximize Your Rebates

Before You Buy

1. Research current rebates (they change frequently) 2. Get detailed quotes showing equipment models 3. Verify equipment qualifies for each rebate 4. Confirm contractor is registered for applicable programs

During Installation

1. Ensure all paperwork is completed 2. Get manufacturer spec sheets 3. Take photos of installation 4. Keep all receipts and invoices

After Installation

1. Submit rebate applications promptly (deadlines apply) 2. File federal tax credit with annual return 3. Keep documentation for 3+ years

Common Mistakes to Avoid

1. Not Checking Qualification First

Some rebates require pre-approval or specific contractors. Verify before signing contracts.

2. Missing Deadlines

Rebate programs have funding limits and deadlines. Apply promptly.

3. Wrong Equipment

Not all "efficient" equipment qualifies. Get exact model numbers verified.

4. Not Using Qualified Contractor

Some programs require specific contractor certifications or registrations.

5. Forgetting Documentation

Lost receipts or spec sheets can void rebate eligibility.

We Handle the Paperwork

Navigating rebates is complicated. We track all current incentives and handle rebate paperwork for our customers. Ask about available rebates when you request a quote.