What it costs, what's permitted, and what to ask before you hire.
Last verified: 2026-05-31 · Well-sourced
Likely first step
Check your electrical panel capacity
Panel / electrical
May require a panel upgrade
Complexity
Verify locally
Permit likelihood
Confirm with your building department
Rebate sensitivity
Verify current programs
Best first call
A licensed contractor for an itemized quote
Utility impact
Electric & gas delivery: PG&E
Pacific Gas & Electric
As of 2026-05-30, PG&E's default residential electric plan is E-TOU-C, a time-of-use plan with a 4-9 PM peak window. Alternatives include E-TOU-D (5-8 PM peak), EV2-A (whole-home TOU optimized for EV charging, lowest rates 12 AM-3 PM daily), and E-ELEC (a newer flat-rate-style plan for fully-electric and NEM 3.0 solar households, and the default plan when registering new residential solar under NEM 3.0). In March 2026, PG&E restructured residential rates under AB 205's income-graduated fixed charge framework, adding a flat Base Services Charge (~$24/month for non-CARE households; CARE/FERA pay a reduced fixed fee) paired with a per-kWh price cut. Households planning heat-pump HVAC, EV charging, or whole-home electrification may want to compare E-TOU-C, EV2-A, and E-ELEC; verify current rates and plan rules at the provider site.
$14,000–$26,000 — Installed cost for a single-family Bay Area home replacing a gas furnace + central AC with a ducted, ENERGY STAR-rated central heat pump system, mid-range equipment, pre-incentive. Range reflects contractor variation, ductwork condition, and whether minor electrical work is required at the indoor unit. Excludes a service-panel upgrade (see bay-area-cost-electrical-panel-upgrade) and any ductwork replacement.
Section 25C Energy Efficient Home Improvement Credit (heat pumps)
Expired Dec 31, 2025. For 2023–2025: up to $2,000/yr (30% of project cost, capped) for qualifying heat pumps and heat pump water heaters. EXPIRED: This federal credit ended Dec 31, 2025 under the One Big Beautiful Bill Act (Public Law 119-21, signed July 4, 2025). Installations completed in 2026 or later do not qualify, regardless of when payment was made. For installations completed during 2023–2025, the credit applied to U.S. primary residences with heat pumps or heat pump water heaters that met or exceeded the highest CEE efficiency tier in effect at the start of the install year; starting 2025, the manufacturer's Qualified Manufacturer Identification Number (QMID) was required on the tax return. Homeowners with eligible 2025 installations may still claim the credit on their 2025 federal tax return. Verify with a qualified tax professional.
California Home Electrification and Appliance Rebates (HEEHRA) — single-family
When available, up to $8,000 (households below 80% AMI) or $4,000 (80–150% AMI) for a qualifying heat pump HVAC system, with additional rebates for heat pump water heaters, electrical panel upgrades, and wiring inside the per-household envelope. Phase I single-family funds are currently fully reserved (waitlist active). PROGRAM STATUS: Single-family Phase I is FULLY RESERVED statewide as of 2026-02-24 — new single-family applications are not being accepted and a waitlist is in place. Multifamily applications remain open. Phase II is under development pending DOE approval. HEEHRA is California's implementation of the federal IRA Home Electrification and Appliance Rebates program, administered by the California Energy Commission (CEC) with single-family implementation through TECH Clean California. When open, eligibility requires income-qualified single-family homeowners (or landlords with income-qualified tenants) at or below 150% of Area Median Income; income tiers determine rebate amount (below 80% AMI vs 80–150% AMI). Projects must obtain an approved reservation before installation; rebates only apply to heat pumps installed after the reservation is approved. Income verification is required before a contractor can submit a reservation. Replacement of an existing non-heat-pump space heating system is required for the HVAC rebate. Homeowners should check techcleanca.com and the CEC IRA rebate page for re-opening announcements before signing a contract.
TECH Clean California — heat pump HVAC incentive (single-family, market-rate)
Currently unavailable: single-family heat pump HVAC incentives are fully reserved as of 2026-05-30. Historical incentive amounts varied by utility service territory and customer income tier — verify against techcleanca.com for re-opening announcements. PROGRAM STATUS: Single-family heat pump HVAC incentives are FULLY RESERVED as of 2025-11-14 — new single-family reservations are not being accepted. Multifamily program activity continues. TECH Clean California is a statewide CEC initiative administered by Energy Solutions under contract with Southern California Edison on behalf of California utilities under CPUC oversight, designed to accelerate adoption of clean space and water heating. When open, single-family eligibility requires the homeowner to be a customer of a participating California utility, the installation to use an enrolled TECH contractor (1,600+ contractors enrolled statewide), and the project to obtain a reservation before installation. Specific dollar amounts varied by service territory and income tier — refer to techcleanca.com for the next-funded round's amounts and any income-qualified bonus structure. Homeowners should not assume an incentive is available; verify current reservation status with techcleanca.com before signing a contract.
California Equitable Building Decarbonization (EBD) Direct Install Program
No-cost direct-install upgrades for income-qualified households — homeowner does not pay out-of-pocket for covered measures. Measures may include heat pump HVAC, heat pump water heater, induction stove, electrical panel upgrade, and weatherization, subject to a per-household scope set by the regional implementer. Administered by the California Energy Commission (CEC) as the statewide Equitable Building Decarbonization Direct Install Program, with delivery through regional implementers and a separate Tribal Direct Install track. Targets low- and moderate-income households in low-income communities; specific AMI thresholds and per-region eligibility rules are set by the regional implementer rather than statewide. Both single-family homeowners and renters in eligible buildings may qualify, though scope and contractor selection are determined by the implementer (homeowners do not freely choose contractors). The program is funded through California IRA HOMES funding (60% allocation to Direct Install, approximately $130.3M) plus state appropriations. Direct Install retrofits began rolling out in summer 2025. Homeowners interested in EBD should contact the CEC at equitablebuildingdecarb@energy.ca.gov or watch for their regional implementer's launch announcement; the program does not accept open online applications the way TECH or HEEHRA do.
Not currently available as a standalone PG&E rebate As of 2026-05-30 PG&E does not advertise a standalone utility-funded residential heat-pump HVAC rebate on its rebates index. Heat-pump HVAC incentives for PG&E-served homes have flowed through (a) TECH Clean California (single-family fully reserved since November 14, 2025; see ca-tech-heat-pump-hvac), (b) HEEHRA-CA (single-family fully reserved since February 24, 2026; see ca-heehra-single-family), and (c) BayREN Home+ for Bay Area homeowners outside PG&E's direct rebate stack. Homeowners may want to verify with PG&E and check whether any successor utility program has launched.
As of 2026-05-31, residential heat pump HVAC installations in the City of Oakland typically require a mechanical permit (and an electrical permit when new dedicated circuits, panel work, or service modifications are in scope) from the Bureau of Building within the Planning & Building Department (PBD). Like-for-like change-outs at the existing equipment location, with no structural modification and no change to gas-line scope beyond capping a removed gas furnace, typically qualify for an over-the-counter / online no-plan Combination Permit. Installations that change equipment location, require structural support modifications, or expand ductwork scope route through traditional plan review. Refrigerant work must be performed by an EPA Section 608-certified technician, and the contractor is typically required to be a C-20 (Warm-Air Heating, Ventilating and Air-Conditioning) licensed contractor authorized to perform the work. Permits filed January 1, 2026 or later are reviewed under the 2025 California Mechanical Code and 2025 California Energy Code (Title 24, Part 6), which under the prescriptive path treats heat pumps as the default for space heating in every climate zone. Verify current Combination Permit eligibility, scope, and contractor-registration requirements with the Bureau of Building before scheduling installation.