SoCal Adds $60M for Heat Pump and Water Heater Rebates
South Coast AQMD is pouring $60.2 million more into gas-to-electric rebates—here's what it means if you're pricing a heat pump or water heater.
Homeowners in the Los Angeles, Orange, Riverside and San Bernardino county area just got a bigger incentive to ditch gas appliances. The South Coast Air Quality Management District's governing board approved $60.2 million in new funding for its GO ZERO rebate program, according to Hoodline.
What happened
GO ZERO already helped more than 3,000 single-family homes and 700 multifamily units swap gas furnaces and water heaters for heat pumps, Hoodline reports, and the original $21 million pilot ran out of single-family funding in under six months. The new money splits $20 million each toward single-family and multifamily rebates, plus a flexible $20 million pool that can shift to whichever category sees more demand.
Under the expanded program, single-family households can get rebates of $500 to $1,000 depending on the system, rising to $1,000–$2,000 in designated overburdened communities. Multifamily properties qualify for $500 to $1,000 per unit, capped at $300,000 per building. Solar water heaters are now eligible alongside heat pump water heaters, and mini-split and window heat pump units can qualify too, not just whole-house systems. At least 75 percent of the funding is reserved for overburdened communities. Units installed on or after September 4, 2026 qualify for this round, and rebates can be stacked with other incentives — Hoodline cites LADWP's heat pump HVAC rebate, worth up to $2,500 per ton, as one example. Board chair Michael A. Cacciotti said the pilot's uptake showed that "communities are eager to move away from polluting gas appliances when affordability improves."
The expansion follows a close 2025 vote in which the AQMD board rejected mandatory zero-emission sales rules for furnaces and water heaters, leaving incentives as the district's main electrification tool — even as a statewide rule already requires all new space and water heater sales in California to be zero-emission from 2030.
What it means for your project cost
GO ZERO only covers the South Coast AQMD region, and the rebate only ever offsets part of the bill — it doesn't change what contractors charge for labor and equipment. Here's roughly where the underlying costs sit before any rebate is applied.
A ducted heat pump system, replacing a central gas furnace and AC, typically runs $11,300 – $18,800, with a typical job landing around $14,500. If you're in a home without ductwork, a ductless multi-zone system — one of the configurations GO ZERO now explicitly supports — typically costs around $23,900. Heat pump installation
Heat pump water heaters, the other appliance GO ZERO targets, are far cheaper: a hybrid heat pump water heater typically costs around $3,400, against a typical $1,900 for water heater replacement generally. Water heater replacement
A $500–$2,000 rebate makes a bigger dent in a water heater swap than in a full ducted heat pump install, which is one reason the program lists water heaters as a faster, cheaper entry point into electrification for many households.
If you're outside Southern California
GO ZERO is a regional program, but it's part of a broader pattern: utilities and local air districts across the country run their own heat pump and water heater rebates, and availability varies a lot by state and even by utility. The federal government's own incentives for this work are winding down — the 25C energy-efficiency credit and 25D residential clean energy credit both end for work placed in service after December 31, 2025, so they won't apply to projects completed next year. To find what's actually available where you live, the DSIRE database tracks state and utility-level incentives, including for heat pumps and water heaters.
Whatever you end up eligible for, treat a rebate as a discount on a quote, not a reason to skip comparing quotes. If an installer's price looks out of line with what a job like this should cost, our "is my quote fair" tool is a quick way to check before you sign anything.
The bottom line
More rebate money in one region is good news for homeowners there, and it's a signal that demand for electrification is outrunning the funding set aside for it — the original pilot burned through its budget in months. For everyone else, the practical takeaway is the same: check what your state, city or utility actually offers before budgeting a heat pump or water heater job, and price the work itself independently of whatever incentive you qualify for.