California Heat Pump Incentives: 2025 Guide

As California continues its push toward a cleaner, more energy-efficient future, heat pumps have emerged as key technologies for reducing energy consumption and greenhouse gas emissions. For homeowners and businesses, this means not only a more sustainable way to heat and cool spaces but also significant savings on energy bills. Fortunately, 2025 offers a range of federal, state, and local incentives that make installing these systems more affordable than ever.

At Invertercool, we’re committed to helping you navigate these opportunities. This guide will walk you through the incentives available in California for 2025, ensuring you can maximize financial benefits while upgrading to a modern, efficient heating and cooling system.

Why Heat Pumps Are Ideal for California

Heat pumps are versatile systems that provide efficient heating and cooling solutions. Heat pumps transfer heat rather than generating it through combustion, making them up to three times more energy-efficient than traditional HVAC systems. Similarly, heat pumps use electricity to extract heat from the air or ground, saving significant energy compared to conventional HVAC systems.

In California’s moderate climate, these systems are particularly effective, efficiently managing both warm summers and mild winters. Beyond energy savings, they reduce reliance on fossil fuels, improve indoor air quality, and support California’s goal of achieving carbon neutrality by 2045. With 2025 incentives in place, now is the perfect time to make the switch.

Federal Heat Pump Incentives for 2025

The federal government continues to support energy-efficient home improvements through the Inflation Reduction Act (IRA), offering tax credits for heat pump installations.

25C Energy Efficient Home Improvement Credit

• What It Offers: Homeowners can claim a tax credit of 30% of the total cost of a qualified heat pump installation, up to $2,000 per year.
  

• Eligibility: The equipment must meet specific efficiency standards set by the Department of Energy (DOE). Most ENERGY STAR-certified models qualify.
  

• How to Claim: The credit is claimed when filing your federal tax return for the year the installation was completed. For 2025 installations, you’ll claim the credit in early 2026.
  

• Additional Perk: This credit can be claimed annually, meaning if you install multiple qualifying systems over different years, you can claim the credit each time.
  

This federal incentive offers significant savings for whole-home heat pump systems, which can cost upwards of $6,000. By covering 30% of the expense, it makes upgrading more accessible for California homeowners.

California State Incentives for Heat Pumps

California offers several state-level programs to further reduce the cost of heat pump installations. These programs are designed to accelerate the adoption of clean energy technologies and support the state’s climate goals.

In November 2024, TECH Clean California introduced the HEEHRA rebate program, allocating $45 million to support single-family households in purchasing energy-efficient heat pump equipment. HEEHRA, which stands for the High-Efficiency Electric Home Rebate Act, is funded by the Inflation Reduction Act (IRA). The program aims to reduce household energy consumption, lowering costs and mitigating greenhouse gas emissions that impact the climate.

 Home Electrification and Appliance Rebates 2025 (HEEHRA)

• What It Offers: Rebates of up to $8,000 for income-qualified homeowners to install energy-efficient appliances — heat pumps included.
  

• Eligibility: Available to single-family homeowners with incomes below 150% of the area median income (AMI). Multifamily buildings may also qualify for rebates on a per-unit basis.
  

• How to Apply: Applications can be submitted through the California Energy Commission (CEC) portal. Contractors can assist with the process.
  

HEEHRA is part of the federal IRA but is administered by the state. It’s especially beneficial for low- and middle-income households looking to electrify their homes.

Local Utility Rebates for Heat Pumps

In addition to federal and state incentives, many local utilities in California offer their own rebates for heat pump installations. These vary by region, so it’s essential to check with your utility provider.

Examples of Local Incentives:

Silicon Valley Clean Energy (SVCE): Silicon Valley Clean Energy (SVCE): Offers clean, renewable electricity to Santa Clara County. Provides rebates for electric appliances like heat pumps, with extra incentives for low-income customers. Works with PG&E for delivery and billing.

Peninsula Clean Energy (PCE): Supplies renewable electricity to San Mateo County and Los Banos. Offers rebates for EV chargers and electric appliances, helping customers switch to clean energy and save money.

Southern California Edison (SCE): Offers rebates for ENERGY STAR-certified heat pumps, often layered with state and federal incentives.

Pacific Gas & Electric (PG&E): Provides incentives for heat pump and HVAC systems, with additional bonuses for enrolling in demand response programs.

To find rebates specific to your area:

• Visit your utility’s website.
  

• Use the DSIRE database to search for incentives by zip code.
  

• Consult with Invertercool, who can help identify all available local rebates.
  

The Advantage of Stacking Rebates: A major benefit of these rebates is that they can be stacked. You can combine federal, state, and local incentives to maximize savings. For example, installing a heat pump system might qualify for a federal tax credit, a state rebate, and a local utility rebate, potentially covering over 50% of the installation cost.

Important Notes on Applying for Incentives

When applying for rebates, keep the following in mind:

• Eligibility Requirements: Make sure the equipment you purchase meets the specific eligibility criteria of the rebate program. Many programs require that products be ENERGY STAR® certified or listed on approved product databases to qualify for incentives.
  

• Application Process: Depending on the program, you may need to submit separate documentation for each product to clarify which rebate corresponds to which installation. For example, TECH Clean California rebates often require contractors to provide distinct records for each system installed.
  

Unlock Savings with Invertercool’s ENERGY STAR® Certified Heat Pumps

As energy costs continue to rise, homeowners are seeking ways to lower their bills while maintaining comfort. The good news is that California offers a range of incentives for energy-efficient upgrades, including tax credits and rebates for heat pumps. No matter whether you are an income-qualified single-family homeowner or not,  you may be eligible for rebates on ENERGY STAR® certified variable-speed heat pump systems used for space heating and cooling.

At Invertercool, we offer a series of products that meet these rebate standards, helping you save on both installation costs and long-term energy bills. Let’s explore how you can seize this opportunity.

What Equipment Qualifies for Rebates?

Certification: Many programs require ENERGY STAR® certification for the broadest range of federal, state, and local incentives due to high energy efficiency.

Type: Heat pumps must typically be dual-speed or variable-speed models for space heating and cooling. Some programs accept variable-speed heat pumps without ENERGY STAR certification.

Eligibility: Rebates may be available for specific groups, such as income-qualified homeowners. Although ENERGY STAR certification maximizes your eligibility for incentives, many variable-speed heat pumps also meet the criteria for certain local programs, meaning you can still qualify for subsidies.

Invertercool’s Qualifying Products

At Invertercool, we are dedicated to delivering cutting-edge, energy-efficient solutions. 

Energy Star Certified Products:

InverterCool® 2Ton Ultra Heat Pump System
This compact yet powerful system is ideal for smaller homes or spaces. Featuring variable-speed technology, it delivers exceptional efficiency, ensuring precise temperature control and lower energy bills.

InverterCool® 3Ton Ultra Heat Pump System
Designed for larger homes, this robust system maintains high efficiency. Its variable-speed functionality adjusts to your heating and cooling needs, maximizing comfort and energy savings.

Both systems are ENERGY STAR® certified, meeting the highest standards for efficiency and performance. Choosing these systems not only qualifies you for rebates but also invests in a greener, more economical future for your home.

Variable-Speed HVAC
At Invertercool, all our products feature advanced variable-speed technology for superior efficiency and comfort. These systems adjust output to match your home’s heating and cooling needs, minimizing energy waste. This leads to lower utility bills and a reduced carbon footprint. Our variable-speed heat pumps also operate quietly, improve indoor air quality, and may qualify for local rebate programs, making them an even smarter investment. 

How to Get Started with Invertercool

At Invertercool, we’re here to support you every step of the way. Our team will guide you in selecting the right heat pump for your home, identifying all available incentives, and ensuring the installation meets the highest standards.

Steps to Begin:

• Contact Us for a consultation to learn more about our products and services.
  
  

• Enjoy Peace of Mind: With Invertercool, you’ll get the most value and efficiency from your system.

Why Choose Invertercool?

Our heat pumps are designed with the latest technology, offering the following benefits:

Superior Efficiency: Up to 41% less energy consumption compared to traditional systems.

Quiet Operation: Enjoy a peaceful home environment with near-silent operation.

Smart Control: Easily manage your system with intuitive controls and smart home integration.

Eco-Friendly: Reduce reliance on fossil fuels and lower your carbon footprint.

Advanced FDD Technology: Industry-leading AI-powered 24/7 diagnostics for proactive maintenance.

Triple 10-Year Warranty: Enjoy peace of mind with our comprehensive 10-year coverage on parts, compressor, and labor. 

By choosing Invertercool, you’re selecting a brand that prioritizes innovation, sustainability, and customer satisfaction.

See How Much You Can Save

The HEEHRA rebates are stackable with other incentives, including federal and local rebates. See if you’re eligible, and use our calculator to learn how much you could save on your Invertercool heat pump system.