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Most Bay Area homeowners who replace a furnace or AC pay more than they have to. Not because the rebates don’t exist, but because the money sits in five different places, each with its own rules, and one wrong step disqualifies you.
In 2026 this matters more than ever. The federal tax credit that used to cover up to $2,000 of a heat pump is gone. What’s left is local: your energy provider, your city, the equipment manufacturer and, for EV chargers and panels, PG&E. Stack them right and they still cover a real share of the job. Stack them wrong and you get nothing.
Here’s how it actually works in the East Bay and Marin, and the current programs are listed on our rebates page.
What changed in 2026
Three big programs that most online guides still mention are no longer available to a typical homeowner.
- Federal 25C tax credit — ended. It paid 30% of a heat pump’s cost, up to $2,000. Under the July 2025 federal budget law, it doesn’t apply to equipment placed in service after December 31, 2025.
- Federal EV charger credit (30C) — ended. It doesn’t apply to chargers placed in service after June 30, 2026.
- TECH Clean California and HEEHRA for single-family homes — fully reserved. The state’s income-qualified heat pump rebates for houses have been fully reserved statewide since February 24, 2026. New requests only go on a waitlist. The multifamily version is still funded.
If a contractor’s quote still subtracts a federal tax credit for a heat pump installed this year, ask them to explain it.
One more thing to know: the Bay Area Air District has adopted zero-NOx rules for new gas furnaces and water heaters. They take effect in stages from 2027, with furnaces in 2029, and apply when you replace equipment, not to what’s already installed. If your furnace is near the end of its life, it’s worth pricing a heat pump now, while local rebates are open, rather than a gas unit whose next replacement will have to be zero-NOx anyway.
Where the money actually comes from
There is no single “HVAC rebate.” There are five layers, and in the East Bay and Marin most of them can be combined.
| Layer | Who pays | Example in our area | How you get it |
|---|---|---|---|
| Energy provider | Your CCA or municipal utility | MCE heat pump rebate (Marin and most of Contra Costa), Alameda Municipal Power rebate | Through a participating contractor, usually before installation |
| City | Your city | Pinole Energy Enhancement Rebate: up to $3,000 for a heat pump replacing gas, up to $1,000 for a panel upgrade, free permits for gas-to-heat-pump projects | Reservation before work, project finished within 45 days |
| Manufacturer | The equipment brand | Daikin and Goodman instant rebates on qualifying heat pump systems | Taken off the price by the dealer, no paperwork for you |
| PG&E | PG&E (funded by the state LCFS program) | EV charger rebate, and up to $5,000 for charger plus panel for income-qualified homes | Standard: after install. Rebate Plus: pre-approval before install |
| Financing | A lender | Monthly payments through the contractor | Spreads the cost; doesn’t lower it |
A Pinole homeowner replacing a gas furnace with a heat pump can combine the city rebate, the MCE rebate and a manufacturer rebate on the same job. That’s three separate checks or discounts on one installation.
Amounts change during the year. The current list for our service area is on the rebates page.
The order that keeps every rebate
Most rebates are lost on timing, not eligibility. This is the sequence we follow on every install.
- Check your address before you get quotes. Your energy provider decides which program you’re in. A house in Richmond is on MCE, a house in the city of Alameda is on Alameda Municipal Power, and the rules are different.
- Pick equipment that qualifies. Utility rebates require minimum efficiency ratings, and manufacturer rebates apply only to specific models and full-system matches. Choose the system with the rebate list in hand, not after.
- Reserve or get pre-approval before any work starts. MCE doesn’t pay for equipment that’s already installed. Pinole needs a reservation first. PG&E Rebate Plus needs pre-approval before the permit is pulled.
- Pull the permit. Most rebate programs expect a permitted installation, and unpermitted work causes problems when you sell the house.
- Install within the program window. Pinole gives you 45 days from reservation confirmation.
- Submit the closing paperwork. Invoices, equipment model and serial numbers, photos, permit sign-off. Missing one document is the most common reason a rebate stalls.
Five mistakes that cost you the rebate
- Installing first, asking later. Almost every utility and city program is pre-approval only. Once the equipment is in, the money is gone.
- Adding solar, a battery or an EV charger too soon. MCE’s heat pump rebate requires that you don’t install other electrification projects for 12 months after the heat pump. If you already have solar or an EV charger, it must have been in place for at least 12 months. Plan the sequence before you sign anything.
- Choosing on price alone. A cheaper unit that isn’t on the qualifying list can end up costing more than a pricier one that is.
- Hiring a contractor who isn’t enrolled. Many programs pay only through participating contractors. Ask which programs the contractor is enrolled in, not just whether they “do rebates.”
- Counting on money that’s already gone. Budgets run out mid-year and programs close without much notice. A quote that includes a rebate should say what happens if the program closes before installation.
Panel upgrades and EV chargers
The electrical side is where the biggest single rebates are in 2026, and where people most often skip them.
Does a heat pump need a new panel? Often not. Many heat pumps run on the existing panel once the load is calculated, especially when they replace a gas furnace and an old AC. If the numbers don’t work, Pinole covers up to $1,000 of a panel upgrade above 100 amps.
EV chargers through PG&E. There are two options:
- Standard. Up to 50% of the price of a PG&E-approved charger, for any PG&E residential customer with an EV registered in California. You apply within 180 days after purchase, once the charger is installed, and PG&E mails a check.
- Rebate Plus. For households below 80% of the county’s median income, or enrolled in programs like CalFresh, Medi-Cal or LIHEAP: up to $2,000 for charger installation, or up to $5,000 for charger plus panel upgrade. You need PG&E pre-approval before installation, and the rebate is paid to the contractor, so it comes off the bill up front.
CCA customers, including MCE, qualify for PG&E’s EV rebate too. Keep MCE’s 12-month rule in mind if you’re planning a heat pump and a charger in the same year.
PG&E requires a licensed California electrician for charger installation. Details are on our rebates page and on PG&E’s program page.
FAQ
Is there still a federal tax credit for heat pumps in 2026? No. The 25C credit doesn’t apply to heat pumps placed in service after December 31, 2025. Savings in 2026 come from local utility, city and manufacturer programs.
Can I combine an MCE rebate with a city rebate? Often, yes. Pinole’s program explicitly stacks with MCE, and manufacturer instant rebates usually stack with both. Each program has its own rules, so check them together before choosing equipment.
Do I have to use a specific contractor? For most utility programs, yes: the contractor has to be enrolled or on the program’s approved list. Manufacturer rebates go through authorized dealers.
How long does it take to get the money? Manufacturer rebates come off the price immediately. PG&E’s EV rebate takes about 10 business days to review, then the check is mailed. Utility and city rebates depend on the program and on how complete the paperwork is.
Are there rebates for replacing just an air conditioner? Rarely. Current programs mostly target heat pumps that replace gas heating. A heat pump replaces both the furnace and the AC, so it usually qualifies where an AC-only swap doesn’t.
Not sure what you qualify for?
Send us your address and what you’re replacing. We check every program on our rebates page against your home and build the quote around the ones you qualify for, before any work starts. Call (925) 302-2429 or request a free estimate.
