Save Big in 2025: Sacramento County Homeowners Can Get Up to $2,000 Back with Heat Pump Water Heater Rebates
Sacramento County homeowners have an unprecedented opportunity in 2025 to upgrade their water heating systems while receiving substantial financial incentives. With multiple rebate programs available through local utilities and federal tax credits, residents can recover up to $2,000 or more when installing energy-efficient heat pump water heaters. However, time is running out on some of these programs, making 2025 a critical year to take action.
SMUD’s Enhanced Heat Pump Water Heater Rebates
Sacramento Municipal Utility District (SMUD) is offering up to $4,000 in rebates for qualifying heat pump water heaters, with enhanced rebates taking effect in 2025 to help customers transition from gas-to-electric systems. These SMUD rebates can be stacked with statewide and federal incentive programs, creating opportunities for maximum savings.
To qualify for SMUD rebates, homeowners must install a qualifying electric heat pump water heater through a participating contractor from the SMUD Contractor Network, with the contractor providing the rebate application and submitting it on your behalf. Some contractors may even offer the rebate amount upfront and collect the rebate from SMUD after project completion.
Federal Tax Credits Worth Up to $2,000
The federal Energy Efficient Home Improvement Credit allows homeowners to claim 30% of costs, up to $2,000 annually, for qualified water heater upgrades including both equipment and installation, but this program expires at the end of 2025. All households who pay federal income taxes are eligible for up to a $2,000 credit for the installation of a qualifying heat pump water heater, as long as it is purchased and installed by December 31, 2025.
To claim your tax credit, you’ll need to file IRS Form 5695: Residential Energy Credits along with your IRS Form 1040, entering the cost of your qualified heat pump water heater and installation in the designated section.
Additional California Incentive Programs
California residents can access heat pump water heater incentives available through TECH Clean California contractors for projects sold on or after July 15, 2025, with at least 50 percent of the incentives dedicated to equity projects. However, TECH Clean California’s single family heat pump water heater incentive funding is no longer available as of February 24, 2025, making local utility programs like SMUD’s rebates even more valuable.
Why Choose a Professional Installer
Working with a qualified Water Heater Installer Sacramento County, CA is essential for maximizing your rebate opportunities. CG Plumbing Company serves as your local plumber in El Dorado, Sacramento, Placer, Nevada and Amador County, CA, with a mission rooted in trust, consistency, and genuine care to make sure your plumbing works the way it should, without the headaches.
Owner and founder Chris Graubart has been in the plumbing industry for 17+ years, with his response time and quality of work giving him a sterling reputation, maintaining high standards for any size project and verifying each project is completed to his and the clients’ standards. CG Plumbing provides pricing before any work begins with no confusion or hidden fees, and they don’t patch problems—they fix them using solid techniques and materials.
Heat Pump Water Heater Benefits
Heat pump water heaters transfer heat using a refrigeration cycle, like a refrigerator running in reverse, making them extremely efficient with the ability to deliver hot water at an efficiency of 300% compared to gas and electric resistance heaters’ maximum efficiency of 99%. These high-efficiency systems use electricity to move heat instead of generating it directly, cutting energy use by up to 65%.
Important Deadlines and Requirements
Qualifying heat pump water heaters installed between January 1, 2023 and December 31, 2025 are eligible for federal tax credit, with this tax credit only applying to heat pump water heaters installed before December 31, 2025. Most programs require professional installation for eligibility, making it crucial to work with licensed contractors.
CG Plumbing is fully licensed and insured to provide plumbing services in Fair Oaks and throughout Sacramento County, ensuring all work meets California plumbing codes and local requirements. They provide written estimates for all work and stand behind their repairs with appropriate warranties, eliminating confusion about pricing and scope of work.
Maximizing Your Savings
In 2025, homeowners can get $3,000–$6,000 back in stackable rebates and federal tax credits, with California homeowners able to receive up to $6,000 in combined rebates and tax credits. State energy-efficiency incentives like TECH Clean California CAN be included towards the federal tax credit, allowing homeowners to claim the full cost toward a tax credit while also receiving state incentives.
The combination of SMUD’s enhanced rebates, federal tax credits, and professional installation through experienced contractors like CG Plumbing creates an ideal opportunity for Sacramento County homeowners to upgrade to efficient, money-saving water heating technology. With some programs expiring at the end of 2025, now is the time to take advantage of these substantial savings opportunities.
Contact a qualified water heater installer today to learn more about available rebates and start your journey toward lower energy bills and a more efficient home.