SoCal Boosts Heat Pump Rebates by $60 Million for Gas Swaps
South Coast AQMD added $60 million to its GO ZERO rebate program for gas furnace and water heater replacements. Here's what it covers and what the swap actually costs.
What happened
The South Coast Air Quality Management District's governing board approved $60 million in additional funding on Friday for its GO ZERO Incentive Program, which pays homeowners and landlords to replace gas furnaces and water heaters with electric, zero-emission equipment, according to MyNewsLA.com. South Coast AQMD covers the urbanized parts of Los Angeles, Orange, Riverside and San Bernardino counties.
The new money follows an initial $21 million pilot that launched in September 2025. According to the agency, that pilot funded more than 3,000 single-family homes and 700 multifamily units to swap gas heating for heat pumps. Multifamily funding was fully booked within two weeks of launch, and the single-family pool ran out in under six months — a sign of how much demand there was at the original funding level.
Under the expansion, $20 million is earmarked for single-family rebates, $20 million for multifamily rebates, and a further $20 million will go to whichever category sees more demand. Single-family rebates generally run $500 to $1,000 depending on the type and size of system installed, rising to $1,000–$2,000 in communities the agency has identified as overburdened by pollution. Multifamily rebates are $500 to $1,000 per unit, capped at $300,000 per property. At least 75% of the funding, in both categories, is reserved for applicants in those overburdened communities.
The agency is also widening what qualifies: solar water-heating systems are now eligible, alongside smaller electric systems such as mini-split and window heat pumps. Equipment installed on or after September 4 qualifies for this new round. South Coast AQMD says application details and the reopening date for the GO ZERO portal will be posted at aqmd.gov/gozero.
What it means for your budget
A rebate in the $500–$2,000 range is useful, but it's a small slice of what a full gas-to-electric swap costs. For context:
- Replacing a gas furnace with a heat pump system typically runs $11,300 – $18,800, with a typical project landing around $14,500. Heat pump installation
- A straight furnace replacement (if you're staying with gas, or weighing the comparison) is $4,700 – $7,800, typical $6,000. Furnace replacement
- Swapping a gas water heater for a heat pump (hybrid) water heater costs $1,450 – $2,450, typical $1,900 — more than a like-for-like gas tank swap mainly because of the new electrical circuit most hybrid units need. Water heater replacement
- If you only need a mini-split for one or two rooms rather than a whole-house system, that's $7,800 – $13,000, typical $10,000. Ductless mini-split
In all four cases, the GO ZERO rebate would offset a meaningful fraction of the basic-tier cost but a much smaller share of a mid- or premium-tier job — especially once you add electrical work. Switching a gas appliance to electric often means upsizing a circuit, or in some homes, upgrading the panel itself, which is where quotes can diverge sharply from a simple swap.
Why the timing matters
This kind of local, utility- or district-run rebate is now doing more of the work that federal tax credits used to. The federal 25C (energy-efficient home improvement) and 25D (residential clean energy) credits both end for the 2025 tax year: 25D doesn't apply to spending after December 31, 2025, and 25C doesn't apply to equipment placed in service after that date. That makes programs like GO ZERO, and other state or utility rebates listed in the DSIRE database, worth checking before you commit to a system, since availability and amounts vary by state and even by utility territory.
Before you book the work
Switching fuel types for heating or hot water is rarely just an equipment swap. New electrical circuits, gas line work, or venting changes for a heat pump water heater typically require a local permit, and inspectors will want to see the work done to code. Budget for that step rather than treating the rebate as the final word on price.
If a contractor's bid for a heat pump, furnace, or water heater job looks out of step with the ranges above, it's worth running it past our "is my quote fair" tool before signing anything — rebates are a discount on the job, not a substitute for checking that the base price is reasonable in the first place.