California HVAC rebates and gas furnace rules in 2026
This guide explains which California heat pump rebates are open right now, which are closed, what happened to the federal tax credit, and what the Bay Area and statewide rules on gas furnaces actually say.
We checked the sources in October 2026. Programs change often, so treat this as a starting point and confirm with the program before you buy.
The short answer
- HEEHRA, the big income based heat pump rebate: closed to new single family reservations. TECH Clean California says single family rebates were fully reserved statewide as of February 24, 2026.
- Federal tax credit (Section 25C): ended. It does not apply to equipment placed in service after December 31, 2025.
- Utility and local programs: they vary by address and change often. Ask before you buy.
- Gas furnace rules: the Bay Area Air District has adopted a zero NOx standard for new gas furnaces starting January 1, 2029. California's statewide proposal had not been adopted as of mid 2026. Nothing outside the Bay Area requires a heat pump today.
HEEHRA, explained
HEEHRA stands for the Home Electrification and Appliance Rebates program. It is funded by the federal Inflation Reduction Act and managed by the California Energy Commission, and it reaches homeowners through TECH Clean California.
For a single family home it offered up to $8,000 for households below 80 percent of the area median income and up to $4,000 for households between 80 and 150 percent, toward a qualifying heat pump HVAC system that replaces a non heat pump heating source such as a gas furnace.
A few rules matter. The rebate has to be approved before the installation starts, so work that is done first cannot be rebated afterward.
It is only available through contractors who are TECH Clean California certified and trained for HEEHRA.
Eligible equipment must be an ENERGY STAR certified two speed or variable speed heat pump, and from January 1, 2026 it must use a refrigerant with a global warming potential of 700 or lower under the EPA's Technology Transitions rule.
The status is the part most websites get wrong. According to TECH Clean California, single family HEEHRA rebates were fully reserved statewide as of February 24, 2026, and multifamily rebates were fully reserved as of September 1, 2026.
The program is not taking new reservations. Check the HEEHRA page for the current status, since funding can change.
TECH Clean California and the stacking rule
TECH Clean California also ran its own incentives for heat pump HVAC systems, paid through participating contractors. Since July 15, 2025, a project cannot receive both a TECH incentive and a HEEHRA rebate, and a customer with an approved TECH reservation cannot switch to HEEHRA.
Single family heat pump incentives under TECH were widely reported as fully reserved in 2026, so check the TECH portal before you count on one.
What happened to the federal tax credit
The Energy Efficient Home Improvement Credit, Section 25C, paid up to 30 percent of the cost of qualifying heat pumps, up to $2,000 a year. Congress ended it for property placed in service after December 31, 2025.
If you installed qualifying equipment by that date, you may still claim it on your 2025 return. A system installed in 2026 does not qualify.
Some manufacturer and ENERGY STAR pages still show older dates, so rely on the IRS and a tax professional, not a brochure.
Utility and local programs
Your electric and gas utility, and sometimes your city or electricity provider, may offer separate rebates or income qualified assistance. In San Jose, for example, most homes buy electricity from San José Clean Energy, with PG&E delivering it.
Rules, amounts and funding vary, and many programs route heat pump incentives through TECH Clean California, so a closed state program can close a utility program too. Ask your contractor and your utility what is open for your address today.
Rules on gas furnaces and water heaters
Bay Area. The Bay Area Air Quality Management District, now called the Bay Area Air District, amended Regulation 9, Rule 4 and Rule 6 in March 2023. New gas furnaces sold and installed in the district must meet a zero NOx standard starting January 1, 2029.
Small gas water heaters follow earlier, on January 1, 2027, although the Air District has been considering changes to that schedule. The rules cover Alameda, Contra Costa, Marin, San Francisco, San Mateo, Santa Clara, Napa and parts of Solano and Sonoma counties.
They do not require you to remove a working appliance, and they do not cover gas stoves. The only zero NOx products available today are electric, such as heat pumps.
San José Clean Energy explains it on its appliance policy page, and the Air District publishes the current dates.
Statewide. The California Air Resources Board has been developing a zero emission standard for space and water heaters that would apply across the state. A proposal has been discussed with a furnace date of 2029, but as of mid 2026 it had not been adopted and no final date was set.
Until it is, outside the Bay Area there is no requirement to install a heat pump instead of a furnace. Other air districts, such as the South Coast district in Southern California, have their own rules.
How to avoid rebate scams
TECH Clean California warns homeowners about rebate scams, and the advice is worth following:
- A contractor should need only your income approval code or approval letter, not your bank statements or other financial records.
- No contractor can guarantee a rebate before your reservation is approved. Be wary of anyone who signs a contract promising a rebate for work done before approval.
- If you think you were misled, you can contact the California Department of Consumer Affairs, the California Attorney General or the Better Business Bureau.
- Check your contractor's license on the CSLB website before you sign.
Questions to ask any contractor about rebates
- Which programs are open for my address today, and how do you know?
- Is my reservation approved before the work starts?
- If a program closes before I am approved, what happens to my price?
- Is the equipment eligible, including the refrigerant rule?
- Do I need an electrical panel upgrade, and is that cost included?
See how this applies to your city: San Jose, Fresno and Bakersfield. Our heat pump installation pricing guide shows typical costs.
Common questions
Is the $8,000 California heat pump rebate still available?
For single family homes, no. TECH Clean California says HEEHRA single family rebates were fully reserved statewide as of February 24, 2026, and no new reservations are accepted. Check the program page for any change.
Can I still get a federal tax credit for a heat pump?
Not for equipment placed in service in 2026. Section 25C ended after December 31, 2025. Installations completed by that date may still be claimed on the 2025 return.
Do I have to replace my gas furnace with a heat pump?
Not today, unless you are in the Bay Area and replacing after the rule takes effect on January 1, 2029. Working furnaces can stay. The statewide proposal had not been adopted as of mid 2026.
Can I get a rebate for work that is already done?
HEEHRA requires approval before installation. A contractor who promises a rebate for work done first is out of compliance with the program.
Can I get a TECH incentive and HEEHRA together?
No. Since July 15, 2025, a project cannot receive both.
Where do I check the current status?
Start with TECH Clean California for HEEHRA, your utility for local programs, and the Air District for Bay Area appliance rules.
Talk to a person
Call any hour for emergency service, or reach us during business hours for a visit or a quote.