California Heat Pump Rebates 2026: Every Program Worth Stacking

The rebate landscape for California heat pumps changed dramatically at the end of 2025. The federal tax credit expired, the big income-based state rebate ran out of money, and the remaining programs are scattered across five utilities and a handful of state initiatives. Here's an honest, current look at what's actually available in 2026.

What just changed (and why most online guides are wrong)

If you've spent any time researching heat pump rebates, you've probably read articles claiming you can stack a $2,000 federal tax credit with state rebates and utility incentives for $5,000 or more in total savings. Most of those articles were accurate when they were written in 2024 or early 2025. They are no longer accurate for installations in 2026.

Two major shifts happened around the end of 2025:

The federal Section 25C tax credit expired. This was the Energy Efficient Home Improvement Credit that covered 30% of qualifying heat pump installations up to $2,000. It was originally extended through 2032 under the Inflation Reduction Act, but legislative changes shortened that timeline. Air-source heat pumps installed on or after January 1, 2026 are no longer eligible. If you completed a qualifying installation in 2025, you can still claim the credit on your 2025 tax return when you file in early 2026, but for new 2026 installs, that door is closed.

HEEHRA (the High-Efficiency Electric Home Rebate program) ran out of money in California. This was the big income-based rebate offering up to $8,000 for low-income households and up to $4,000 for moderate-income households. California's allocation was substantial, but it was always finite. Central and Southern California's funding was exhausted on January 7, 2026. Northern California followed on February 24, 2026. New applicants statewide can request to be placed on a waitlist, but additional funding is not guaranteed.

What's still available: the 2026 California heat pump rebate stack

Here's an overview of the programs currently funded and accepting new applications. Specific amounts depend on your utility, equipment, income, and project scope, so treat these as starting points and always verify against the official program page before counting on a number.

SMUD (Sacramento Municipal Utility District)

SMUD increased its heat pump rebates in February 2026, explicitly framing it as a response to the expiration of federal and state programs. Current amounts:

SMUD rebates require installation by a participating contractor in the SMUD Contractor Network, with two-stage systems needing minimum SEER2 of 15.2. The contractor handles the paperwork and may apply the rebate as an upfront discount.

PG&E (Pacific Gas and Electric)

PG&E doesn't run a single flat heat pump rebate. Instead, it points customers to the statewide Switch Is On incentive lookup, which aggregates available programs by zip code. PG&E-area residential rebates typically land in the $500 to $1,500 range depending on equipment type and configuration.

For income-qualified PG&E customers, the Energy Savings Assistance Program offers free heat pump water heater upgrades and other improvements at no cost. Eligibility is based on household income.

SCE (Southern California Edison)

SCE offers rebates in the $200 to $1,000 range for central air conditioning and heat pump installations meeting efficiency thresholds. Amounts depend on equipment specifications and whether the project includes a panel upgrade or other electrification work.

SDG&E (San Diego Gas & Electric)

SDG&E's residential heat pump rebates run on a similar structure to SCE, with amounts varying by equipment class. Check current offerings through the Switch Is On lookup or your installer.

LADWP (Los Angeles Department of Water and Power)

LADWP's Consumer Rebate Program is among the most generous in the state for HVAC. The program offers up to $2,500 per ton for qualifying heat pump systems with minimum HSPF2 of 7.7 and SEER2 of 15.2. For a typical 3-ton residential system, that's up to $7,500 in rebates from LADWP alone, before any other stacking. The program has the highest per-unit rebates of any California utility right now.

California Energy Smart Homes

This is a statewide program supporting whole-home electrification, especially in new construction and gut renovations. Qualifying single-family projects can receive $4,250 or more depending on the scope of electrification work. The program is contractor-administered through a network of participating builders.

Community Choice Aggregators (CCAs) and local programs

Many California cities and counties have their own electrification programs through Community Choice Aggregators like Silicon Valley Clean Energy, MCE, Peninsula Clean Energy, and others. These vary widely. Some offer thousands in additional incentives on top of utility rebates. If you're served by a CCA, check their site directly because these programs are often missing from broader rebate lookup tools.

How to actually stack rebates

In 2025, the standard stack was federal credit plus state rebate plus utility rebate. In 2026, the stack is shorter but still worth pursuing. Here's how to approach it:

1. Confirm your utility. Your utility determines which programs you can access. SMUD, PG&E, SCE, SDG&E, and LADWP all have distinct programs. You can only claim rebates from the utility that serves your address.
2. Check the Switch Is On incentive lookup. The state-run switchison.org aggregates available programs by zip code and equipment type. It's the best single starting point.
3. Apply for HEEHRA waitlist if income-qualified. If your household earns under 150% of Area Median Income, get on the HEEHRA waitlist even though funding is currently exhausted. Costs nothing, and additional funding could become available.
4. Check your CCA, if applicable. If you're in a Community Choice Aggregator service area, check their site directly for additional incentives.
5. Use a participating contractor. Most rebate programs require installation by a contractor who's registered with the program. The contractor handles paperwork and often applies rebates as upfront discounts.
6. Save documentation. Even with rebates handled by your contractor, keep copies of your contract, equipment specifications, and any rebate paperwork. You may need them for tax purposes (for any remaining geothermal credits) or for future program audits.

What about the federal credit if I do a geothermal system?

Geothermal heat pumps, which use ground-source rather than air-source technology, are still eligible for the federal Residential Clean Energy Credit under Section 25D. This credit covers 30% of the total project cost (equipment plus installation) with no dollar cap, and it's available through December 31, 2032.

The catch is that geothermal systems are significantly more expensive to install than air-source heat pumps, often $20,000 to $40,000 for residential, because they require drilling ground loops. The math can still work out favorably for the right home, but they're rare in residential California outside of specific climate zones and custom builds. For most California homeowners, air-source remains the practical choice, even without the 25C credit.

Common 2026 stacking scenarios

Some realistic combinations for typical California homes:

Sacramento (SMUD area), gas furnace replacement with heat pump HVAC

• SMUD gas-to-electric conversion rebate: up to $3,000
• Go Electric Bonus (with panel upgrade): up to $2,000
• Potential total: up to $5,000

Los Angeles (LADWP area), 3-ton heat pump HVAC

• LADWP Consumer Rebate Program: up to $7,500 (at $2,500 per ton)
• SCE rebate (for SCE-served portions of LA): variable
• Potential total: up to $7,500+

Bay Area (PG&E area), heat pump water heater

• PG&E rebate: variable, typically $500 to $1,500
• CCA bonus (varies by service area): $300 to $1,000+
• Local utility-run program: variable
• Potential total: $800 to $2,500+ depending on stacking

These are estimates based on current published program amounts. Your actual rebate depends on your specific equipment, contractor pricing, and program funding status at the time you install.

What programs to watch in late 2026

The rebate landscape will keep shifting. A few things worth tracking:

• HEEHRA funding restoration. Additional federal allocations to the HEEHRA program could reopen single-family applications. The waitlist exists precisely for this scenario.
• Utility program updates. Investor-owned utilities adjust rebate amounts at least annually, often quarterly. SMUD's February 2026 increase was specifically tied to the federal expiration. Other utilities may follow.
• Federal legislation. Energy efficiency incentives have been politically volatile. New legislation could restore some form of federal heat pump credit, though there's no current proposal close to passage.
• Refrigerant requirement changes. Starting January 1, 2026, residential heat pump systems eligible for HEEHRA must use refrigerants with global warming potential of 700 or lower. This affects equipment availability and pricing.

The honest summary

In 2026, California heat pump rebates are smaller and harder to stack than they were in 2025. The federal credit is gone. HEEHRA is on hold. The remaining programs are mostly utility-run, vary significantly by service area, and require working through participating contractors.

Even so, the economics for switching from gas to a heat pump can still work in your favor, especially in SMUD or LADWP service areas, especially for whole-system replacements that qualify for the largest rebates, and especially if your existing equipment is at or past end of life. The total incentive picture is just less than what online calculators built for the 2024-2025 era would suggest.

For a personalized estimate using current 2026 rebate amounts and your specific utility, run the heat pump savings calculator. It uses the same data described in this guide and produces a starting point for getting installer quotes.