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Heat Pump Water Heater Resources

According to the California Air Resources Board,  85 percent of on-site building emissions come from space and water heating and cooling. Heat pumps are key to decarbonizing buildings and achieving both San José and California's zero-carbon goals.

Heat pump water heaters are two to three times more efficient than gas water heaters. They use electricity to move heat from one place to another instead of generating heat directly. To move the heat, the technology works like a refrigerator in reverse. While a refrigerator pulls heat from inside a box and dumps it into the surrounding room, a stand alone air-source heat pump water heater pulls heat from the surrounding air and dumps it at a higher temperature into a tank to heat water.

Incentives and rebates

Rebates are available from a variety of sources including BayREN, TECH and through the Inflation Reduction Act (IRA) for homeowners and contractors. Rebates often can be layered - meaning they can be used together to reduce the total cost. Find more information on available rebate programs and incentives here. 

Tips for finding a Contractor

Regional organizations publish lists of approved contractors to participate in their respective building electrification rebate programs. Please note that the City does not endorse or recommend any particular vendor and that the following lists provided below are not exhaustive.

When selecting a contractor, including contractors provided on the list above: 

Resources AND trainings

Contractor Trainings 

Free trainings are available for contractors to learn more about technology features and benefits, appropriate applications, energy efficiency comparison to other water heater types, installation techniques and best practices, service support and warranty, proper maintenance, troubleshooting, and selling strategies. Visit the Education Programs webpage for upcoming and recorded trainings including our 2023 Home Electrification Webinar Series. For other current training opportunities visit:

Frequently Asked Questions (FAQ)

Does a heat pump water heater work if the outside air is too cold?

Yes. While this is unlikely in San José’s climate, if it gets too cold, an electric heat pump water heater will switch to backup coils and run just like an electric resistance water heater.

What are the benefits of switching from a gas water heater to an electric heat pump water heater?

  • Lower Energy Bills – While an Energy Star®-certified heat pump water heater costs slightly more upfront, the energy cost savings will pay for its additional costs in about three years for a typical home.
    Source: Energy Star
  • Healthier and More Comfortable Living Spaces – Burning natural gas creates emissions of unhealthy gases such as nitrogen dioxide, carbon monoxide, and formaldehyde. Eliminating these emissions in your water heater or stovetop will improve indoor air quality while cooling the surrounding areas.
  • SMART Home – Most heat pump water heaters can be connected to Wi-Fi and to your smartphone for setting schedules and important alerts like water leak detection.
  • More Energy-Efficient and Climate Smart – Heat pump water heaters can be two to three times more energy-efficient than conventional electric resistance and natural gas water heaters, reducing your greenhouse gas emissions.

What are the benefits of a heat pump when used with solar electricity?

During the day when the sun is shining, rooftop solar panels harvest solar energy and convert it to be used in your home as electricity. Because heat pump water heaters are powered by electricity, pairing the heat pump with rooftop solar could effectively reduce the cost to run it compared to running it without solar. For more information on how to get solar, visit our Solar Energy page.

Will I need a building permit to replace my gas water heater?

Yes, your installation contractor will need to pull a permit with the City’s Building Division. For more information, call or visit the Permit Center at San José City Hall.

What are other ways to move toward a ZNC home?

Additional ways to move towards a ZNC home include:

For more information or questions email climatesmart@sanjoseca.gov.