SMUD Heat Pump Rebates & Incentives (2026)
SMUD, Sacramento's community-owned electric utility, pays some of the largest heat pump rebates in California: up to $3,000 for a gas-to-electric heat pump HVAC conversion, up to $4,000 for a heat pump water heater, and a $2,000 Go Electric bonus for panel and circuit work — up to ~$9,750 combined for a full electrification project. SMUD raised these amounts in February 2026, explicitly citing the expiration of federal tax credits and state incentive programs. This guide covers all major SMUD heat pump incentives available in 2026, including HVAC, water heater, Go Electric and induction rebates. Here's what's actually available.
Last verified: July 16, 2026
Rates and program availability may change after this date.
✓ Open — rebates available across the full SMUD service area
SMUD's heat pump HVAC, heat pump water heater, Go Electric and induction rebates are all active as of July 16, 2026, with increased amounts in effect since February 2026. All rebates are subject to availability of funding and must be submitted through the SMUD Contractor Network.
The short version
✓ Up to $3,000 for heat pump HVAC
Replacing gas heating with a variable-stage heat pump pays $3,000; two-stage systems pay $2,000. Sacramento-area SMUD customers only.
✓ Up to $4,000 for heat pump water heaters
Gas-to-electric heat pump water heaters pay $3,000–$4,000 by tank size (50, 65 or 80 gallons and up).
✓ Up to ~$9,750 combined
Individual equipment rebates run $1,000–$4,000 by conversion type; an eligible gas-to-electric project can reach $6,000 once the equipment rebate combines with the Go Electric bonus. Full packages (HVAC + water heater + panel work + induction) can reach ~$9,750 in total SMUD incentives.
✗ Federal tax credits expired
Section 25C and Section 25D federal tax credits ended December 31, 2025. SMUD's February 2026 rebate increases were a direct response.
⚠ SMUD electric customers only — and the big numbers require dropping gas
Rebates apply only to homes individually metered by SMUD. Households served by Roseville Electric or by PG&E for electricity are not eligible, even in the Sacramento region. And electric-to-electric replacements earn $1,000, not the headline $3,000–$4,000 — the top amounts are for gas conversions.
Where SMUD rebates apply
SMUD is a single-state, single-territory utility. It provides electric service to approximately 900 square miles covering most of Sacramento County and small, adjoining portions of Placer and Yolo counties. Heat pump rebates are available across the entire service area, with one program — there are no regional tiers.
| State | Heat pump program? | Note |
|---|---|---|
| California | Yes | $1,000–$3,000 heat pump HVAC and $1,000–$4,000 HPWH by conversion type; $2,000 Go Electric bonus |
The boundary matters more than it looks. The Sacramento region has three electric providers side by side: SMUD, Roseville Electric (the City of Roseville's municipal utility) and PG&E. Only homes metered by SMUD qualify for these rebates. Natural gas in the region is supplied by PG&E regardless — which is exactly the service a gas-to-electric conversion lets you cancel.
SMUD rebates in detail
All amounts below apply across SMUD's full service area and were verified against SMUD's own program pages. Every rebate in this section is subject to availability of funding and must be submitted by a participating contractor in the SMUD Contractor Network.
Heat pump HVAC rebates
SMUD rebates two-stage and variable-stage heat pump HVAC systems only — single-stage systems are not eligible. The amount depends on what the system replaces and its compressor type.
| Measure | Rebate | Conversion type |
|---|---|---|
| Variable-stage heat pump HVAC system | $3,000 | Gas to electric |
| Two-stage heat pump HVAC system (15.2 SEER2 minimum) | $2,000 | Gas to electric |
| Multi-stage heat pump HVAC upgrade | $1,000 | Electric to electric |
Heat pump water heater rebates
Water heater rebates scale with tank size for gas-to-electric conversions. Units must meet NEEA Tier III or IV requirements for climate zone 12, and every installation must include a thermostatic mixing valve.
| Measure | Rebate | Conversion type |
|---|---|---|
| Heat pump water heater, 50 gallon+ | $3,000 | Gas to electric |
| Heat pump water heater, 65 gallon+ | $3,500 | Gas to electric |
| Heat pump water heater, 80 gallon+ | $4,000 | Gas to electric |
| Heat pump water heater, all sizes | $1,000 | Electric to electric |
Go Electric bonus (panel and circuit work)
The Go Electric bonus is often summarized as a $2,000 panel rebate, but it is structured per circuit: SMUD pays up to $500 for each eligible circuit wired to the source — clothes dryer, cooktop/range and electric vehicle charger — plus up to $500 for a sub-panel if more panel space is needed, up to a total of $2,000. Two conditions apply: the project must replace an existing gas furnace or gas water heater with a qualifying heat pump, and the home must be made all-electric ready with the panel plus all eligible circuits.
Induction cooktop rebate
Replacing a gas cooktop or range with induction (24 inches or larger) earns $750, with before-and-after photos required; electric-to-induction replacements earn $100. Unlike the heat pump rebates, this one is applied for directly online within 180 days of purchase.
SMUD publishes what projects actually cost
Unusually among utilities, SMUD publishes real installed-cost data from its own customers' projects, refreshed quarterly: the median gas-to-electric heat pump HVAC installation runs $18,897, and the median gas-to-electric heat pump water heater runs $6,244. Use those numbers to sanity-check contractor bids before you sign.
⚠ Common mistake: expecting the headline rebate for a like-for-like swap
The $3,000 and $4,000 figures apply only when you retire gas equipment. Replacing an existing electric heat pump or electric water heater pays $1,000, and single-stage HVAC systems earn nothing at all. Confirm the conversion type and compressor staging with your contractor before counting on a number.
✓ Best candidates for SMUD rebates
Homes with a gas furnace and gas water heater planning a full conversion capture the most: both top-tier rebates, the Go Electric bonus and the induction rebate in one project. A water heater in the garage (easy airflow), an aging AC unit, and a panel that needs work anyway all tilt the math further toward converting now.
For the statewide picture beyond SMUD, see the California heat pump rebates guide.
Equipment requirements
Heat pump HVAC systems
Package, split and mini-split systems qualify with a variable-stage or two-stage compressor at 15.2 SEER2 or higher. The installation must pass Title 24 via HERS CF3R verification, any new ductwork must be insulated to R8 or better, and a connected Wi-Fi, 7-day programmable thermostat is required. Mini-splits must serve the entire home to qualify.
Heat pump water heaters
Units must meet NEEA Tier III or IV requirements for climate zone 12 and include a thermostatic mixing valve. Projects must be permitted and pass all city or county inspections. Most units need a 240V circuit and 30-amp breaker, though a growing number run on a standard 120V circuit — a SMUD Contractor Network contractor can confirm what your panel supports. Eligibility covers single-family homes and individually metered multifamily dwellings up to 4 units; manufactured homes qualify only on permanent foundations subject to state and local building codes.
Federal tax credits have ended
The federal Section 25C and Section 25D tax credits expired December 31, 2025. SMUD's own rebate pages note that the federal credit applies only to systems installed before that date, and SMUD cited the expiration when it raised its rebates in February 2026. Details: what the federal credit expiration means for you.
How SMUD rebates stack
SMUD states its heat pump rebates may stack with statewide and federal programs, subject to each program's current rules. In 2026 the other layers are thin: federal credits expired December 31, 2025, and SMUD describes statewide TECH Clean CA incentives as available only for a limited time while funding lasts. The real stacking on a SMUD project happens inside SMUD's own program — combining the HVAC, water heater, Go Electric and induction rebates in one conversion. SMUD's published residential rebate tables carry no income tiers; amounts are the same at every income level.
Electric-to-electric upgrades — HVAC + water heater
- Multi-stage heat pump HVAC upgrade: $1,000
- Heat pump water heater upgrade: $1,000
Realistic maximum: ~$2,000
Gas-to-electric HVAC conversion + Go Electric bonus
- Variable-stage heat pump HVAC (gas to electric): $3,000
- Go Electric bonus (if the project makes the home all-electric ready): up to $2,000
Realistic maximum: ~$5,000
Full electrification — the best case
- Variable-stage heat pump HVAC (gas to electric): $3,000
- Heat pump water heater, 80 gallon+ (gas to electric): $4,000
- Go Electric bonus (panel + circuits): $2,000
- Induction cooktop (gas to induction): $750
Realistic maximum: ~$9,750
What you'll actually pay
Using SMUD's own published medians: a stand-alone gas-to-electric heat pump water heater runs about $6,244 installed, leaving roughly $2,200–$3,200 after the rebate. A stand-alone gas-to-electric HVAC conversion runs about $18,897 installed, leaving roughly $15,900. A full package combining both plus panel work lands around $25,100 in median equipment costs before the $9,000 in core rebates — expect roughly $2,200 to $16,000+ out of pocket depending on scope, before electrical and induction costs.
SMUD offers no income-qualified rebate adders in its published residential tables; its income-qualified offering is a discounted electric rate, listed separately from rebates. California's HEAR program status is covered on the California page.
How to apply
SMUD's heat pump HVAC, heat pump water heater and Go Electric rebates are contractor-driven — you generally don't submit those applications yourself. The induction rebate is the exception: you apply for it directly online.
Choose a participating contractor
Pick a contractor from the SMUD Contractor Network. SMUD recommends getting at least 3 bids — pricing varies widely between companies.
Install qualifying equipment
The system must meet SMUD's staging, efficiency and permitting requirements. Your contractor is responsible for knowing the current program rules.
Sign the rebate application
Your contractor provides the rebate application for your signature and submits it to SMUD on your behalf.
Receive your rebate
Some contractors offer the rebate amount upfront as a discount on your invoice and collect it from SMUD after the project is completed — ask which way yours works.
What to watch in 2026
Funding availability
Every SMUD rebate is explicitly subject to availability of funding. The current amounts date from a February 2026 increase; SMUD's board sets the budget and can revise amounts in either direction without a fixed schedule.
Statewide funding reopenings
SMUD's pages describe TECH Clean CA incentives as available for a limited time while funding lasts. If a statewide layer reopens, it would stack on top of SMUD amounts — the Switch Is On incentive lookup is the fastest way to check what is currently open.
The 2030 Zero Carbon Plan
SMUD's heat pump programs are a cornerstone of its 2030 Zero Carbon Plan and its goal to electrify 154,000 homes by 2030, with more than 23,000 gas systems already replaced. That strategic commitment makes these rebates likelier to persist than typical utility offerings — but tiers and amounts can still shift year to year.
Frequently asked questions
What heat pump rebates does SMUD offer in 2026?
SMUD pays $3,000 for a variable-stage heat pump HVAC system replacing gas heating ($2,000 for two-stage systems) and $1,000 for electric-to-electric heat pump upgrades. Heat pump water heaters replacing gas earn $3,000 to $4,000 depending on tank size ($1,000 electric-to-electric). A Go Electric bonus adds up to $2,000 for panel and circuit work, and gas-to-induction cooktop conversions earn $750. Federal Section 25C and 25D tax credits expired December 31, 2025 and no longer apply.
Can I stack SMUD heat pump rebates with other programs?
Yes in principle. SMUD states its heat pump rebates can be stacked with statewide and federal incentive programs, subject to each program's current rules. In practice the other layers are thin in 2026: federal tax credits expired December 31, 2025, and SMUD's own pages describe statewide TECH Clean CA incentives as available only for a limited time while funding lasts. Check the Switch Is On incentive lookup for anything currently open.
Do I have to switch from gas to get the biggest SMUD rebates?
Yes. The headline amounts are for gas-to-electric conversions. Replacing an existing electric heat pump or electric resistance system with a new heat pump earns $1,000 for HVAC and $1,000 for a water heater, not $3,000 to $4,000. The $2,000 Go Electric bonus also requires replacing an existing gas furnace or gas water heater with a qualifying heat pump, and the home must be made all-electric ready with the panel plus all eligible circuits.
Do I need a specific contractor for SMUD rebates?
Yes. Heat pump HVAC, heat pump water heater and Go Electric rebates must be submitted by a participating contractor in the SMUD Contractor Network. The contractor provides the rebate application for your signature and submits it for you, and may offer the rebate amount upfront as a discount, collecting it from SMUD after the project is completed. Single-stage systems and non-network installations do not qualify.
Who is eligible for SMUD heat pump rebates?
You must be a SMUD customer with an active account in a home individually metered by SMUD, covering single-family homes and multifamily dwellings up to 4 units. SMUD serves roughly 900 square miles, including most of Sacramento County and small adjoining portions of Placer and Yolo counties. Households served by Roseville Electric or by PG&E for electricity are outside SMUD territory and not eligible, even in the Sacramento region.
Sources
- SMUD — Heating and Cooling Rebates (heat pump HVAC)
- SMUD — Appliance Rebates (heat pump water heater, induction)
- SMUD — Go Electric Bonus Rebates
- SMUD — News: SMUD Boosts Rebates for Heat Pumps (February 2026)
- SMUD — Service Territory Map
- SMUD Contractor Network
All amounts verified July 16, 2026 against SMUD's own program pages. California statewide context: see the California page (last verified July 6, 2026).
Disclaimer: This page covers the main SMUD heat pump incentives available to California homeowners in SMUD's Sacramento-area service territory in 2026. It does not calculate savings, guarantee eligibility, or represent SMUD or any incentive program. Rebates are subject to availability of funding and must be submitted through SMUD's participating contractor network. We verify status regularly but programs can change without notice. Always confirm current amounts and eligibility with SMUD and your contractor before making decisions.