Energy Efficiency Incentives for Water Heaters in San Diego County
San Diego County homeowners have access to substantial energy efficiency incentives for water heater upgrades in 2024 and 2025. While some programs have reached capacity, new opportunities continue to emerge through federal, state, and local initiatives. These incentives can help you save thousands of dollars on your next water heater installation.
SDG&E Rebates vs. Local Municipal Utility Incentives
San Diego Gas & Electric (SDG&E) customers have access to various rebate programs, though availability has become limited. SDG&E offers special in-store instant rebates on energy-efficient water heaters ranging from $75 to $500, available through their online rebates portal.
The Golden State Rebates program, which served SDG&E customers, is temporarily paused and expected to relaunch on or before November 1, 2025. This program previously offered up to $900 instant rebates on heat pump water heaters for qualifying customers.
Municipal utility customers in San Diego County may have different rebate options depending on their service provider. Each utility maintains its own incentive programs, so it's important to check with your specific utility company for current offerings.
California State Programs
HEEHRA (Home Electrification and Appliance Rebates)
California's HEEHRA program provides substantial rebates for income-qualified households through TECH Clean California. The program launched in October 2024 and offers:
Single-Family Households:
- Households earning less than 80% of Area Median Income (AMI): up to $8,000 per unit
- Households earning between 80-150% AMI: up to $4,000 per unit
Multifamily Properties:
- Heat Pump Water Heater (Electric to Electric): $700
- In-Unit Heat Pump Water Heater: $1,750
- Central Heat Pump Water Heater: $1,750 per served unit
HOMES Program
The Home Efficiency Rebates Program provides rebates for whole-home energy upgrades. California received $291 million in federal funding for this program, which launched in 2025. The program focuses on measured energy savings and offers performance-based rebates.
TECH Clean California
TECH Clean California administered many of the state's heat pump water heater incentives, though single-family market rate incentives became fully reserved statewide as of February 24, 2025. The program required participation in demand response programs and enrollment in time-of-use rates for recipients.
Alt text: Clean utility room featuring a newly installed energy-efficient water heater
Description: A well-organized home utility room with a modern water heater, proper clearances, and clean installation showcasing professional workmanship
Federal Tax Credits and IRA Benefits
The federal government offers a substantial tax credit for heat pump water heaters through the Inflation Reduction Act. Homeowners can receive up to $2,000 (or 30% of installation costs, whichever is less) when filing their taxes. This credit applies to both heat pump HVAC systems and heat pump water heaters.
The Energy Star rebate finder helps homeowners identify all available federal incentives for their specific situation. These federal credits can be combined with state and local programs to maximize savings.
PACE Financing Options
Property Assessed Clean Energy (PACE) financing provides an alternative to traditional rebates by allowing homeowners to finance energy improvements through their property tax bill. Programs like HERO and CaliforniaFIRST operate in San Diego County, though specific water heater eligibility varies by program.
PACE financing typically covers 100% of project costs and allows repayment over 5-25 years. This option can be particularly valuable when rebate programs are unavailable or fully subscribed. San Diego County participates in PACE programs, making this financing option accessible to most homeowners.
Application Process and Requirements
Working with Certified Contractors
Most rebate programs require installation by certified contractors. For TECH Clean California incentives and HEEHRA rebates, only contractors who have completed required training can apply. These contractors handle all paperwork, permits, and inspections.
High Tech Plumbing's certified technicians are trained in current rebate programs and can help you navigate the application process. Our team handles permit applications as detailed in our water heater installation permits guide and ensures compliance with all program requirements.
Customer Requirements
Rebate recipients typically must meet specific requirements:
- Enrollment in approved demand response programs
- Agreement to transition to time-of-use rates
- Enrollment in water heater rewards programs where available
- Income verification for HEEHRA programs
Typical Rebate Amounts by System Type
Heat Pump Water Heaters
Heat pump water heaters typically qualify for the highest rebate amounts:
- Federal tax credit: up to $2,000
- HEEHRA rebates: $700-$8,000 (income-qualified)
- Utility rebates: $100-$3,000 (when available)
High-Efficiency Gas Water Heaters
Traditional high-efficiency gas units may qualify for:
- Utility rebates: $80-$1,500 for ENERGY STAR certified tankless models
- Golden State Rebates: varies by efficiency rating (program currently paused)
Solar Water Heating Systems
When combined with gas backup systems, solar thermal systems can qualify for:
- Utility rebates: $2,500-$5,000 for ENERGY STAR certified systems
- Federal tax credit: 30% of system cost
Current Program Status and Availability
As of 2025, many rebate programs have reached capacity or have limited availability. Key status updates include:
- TECH Clean California single-family heat pump water heater incentives are fully reserved statewide
- SDG&E service area market rate incentives became nearly reserved in April 2024
- Golden State Rebates program is paused until November 2025
- HEEHRA programs continue to accept applications for income-qualified households
Our team at High Tech Plumbing stays current on program availability and can help you identify alternative incentives when primary programs are unavailable. We recommend contacting us early in your planning process to explore all available options.
Maximizing Your Savings
Stacking Incentives
When available, you can often combine multiple incentives:
- Federal tax credits with state rebates
- Utility rebates with PACE financing
- State programs with local municipal incentives
Timing Your Upgrade
Planning your water heater replacement when rebate programs have funding available can save thousands of dollars. Consider upgrading before your current unit fails completely to take advantage of program timing.
Choosing the Right System
The comparison between tankless vs tank water heaters affects rebate eligibility. Heat pump water heaters typically qualify for the highest incentives, while high-efficiency tankless models may qualify for utility rebates.
Energy Savings Beyond Rebates
Heat pump water heaters can reduce water heating costs by hundreds of dollars annually compared to traditional electric units. These systems are particularly effective in San Diego's mild climate, where ambient air temperatures support efficient operation year-round.
Understanding proper water heater sizing ensures your new efficient system meets your household's needs while maximizing energy savings. Our technicians can help you select the right capacity for your home and usage patterns.
Why Choose High Tech Plumbing for Your Energy-Efficient Water Heater
High Tech Plumbing's certified technicians have extensive experience with energy-efficient water heater installations throughout San Diego County. We handle all aspects of your upgrade, from initial consultation through rebate application and professional installation.
We serve homeowners throughout San Diego County, including specialized water heater installation services in Chula Vista, El Cajon, La Mesa, National City, and Santee. Our team understands local utility requirements and can help you maximize available incentives.
Plan Your Water Heater Upgrade
Energy efficiency incentives for water heaters in San Diego County continue to evolve, with new programs launching and existing programs reaching capacity. Staying informed about available options can help you save significantly on your next water heater installation.
Contact High Tech Plumbing today to discuss your water heater upgrade options and current incentive availability. Our team can help you navigate the complex landscape of rebates and financing options to find the best solution for your home and budget.
For detailed information about installation costs, review our San Diego water heater installation cost guide to understand total project expenses and potential savings from available incentives.