Upgrading your HVAC system or water heater is one of the best ways to improve home comfort, reduce energy bills, and increase property value. But for homeowners in California — especially in regions like Santa Rosa, Napa, Petaluma, and Sonoma County — there’s an added bonus: generous state, federal, and utility incentives that significantly reduce the cost of high-efficiency equipment.

At Jazz Heating, Air Conditioning and Plumbing, we help local homeowners take advantage of every available rebate so they can upgrade for less. If you’ve been considering a new heat pump, furnace, air conditioner, hybrid water heater, or tankless model, this guide breaks down the incentives you may qualify for.

Why California Offers So Many Rebates Right Now

Energy efficiency and electrification initiatives are accelerating across the state. Several major trends are driving increased incentives:

• High electricity and gas rates in Northern California
  
• Statewide climate goals to reduce carbon emissions
  
• Grid strain during summer heatwaves
  
• Push toward cleaner heating and cooling technologies
  
• Programs encouraging heat pumps and hybrid water heaters
  

These initiatives make upgrading more affordable than ever for residents in Santa Rosa, Napa Valley, Rohnert Park, Windsor, Healdsburg, and surrounding communities.

1. Federal Tax Credits (Inflation Reduction Act)

The federal government offers major tax credits for high-efficiency HVAC and water heating equipment.

30% Federal Tax Credit – Up to $2,000 for Heat Pumps

You may qualify if you install:

• A high-efficiency electric heat pump
  
• A heat pump water heater (hybrid water heater)
  
• Certain high-efficiency HVAC upgrades
  

Heat pumps count because they are significantly more efficient than traditional ACs and furnaces — perfect for California’s mild climate.

What’s included:

• Equipment cost
  
• Labor cost
  
• Electrical upgrades necessary for installation
  

30% Federal Tax Credit – Up to $600 for Air Conditioners and Furnaces

Qualifying high-efficiency systems may include:

• ENERGY STAR® air conditioners
  
• High-efficiency furnaces
  
• Certain packaged systems
  

This credit applies on top of any state or utility incentives.

30% Federal Tax Credit – Up to $600 for Electrical Panel Upgrades

Many older homes in Sonoma County require panel upgrades before installing a heat pump or hybrid water heater. This credit helps offset the cost.

2. California State Rebates

California offers some of the most generous state-level energy incentives in the country.

TECH Clean California – Heat Pump Incentives

This statewide program encourages the adoption of electric heat pumps.

Typical incentives range from:

• $1,000–$3,000 for heat pump HVAC installations
  
• $1,000–$3,100 for heat pump water heaters
  

Amounts vary based on available funding and household income.

TECH Clean California incentives often stack with:

• Federal tax credits
  
• Local utility rebates
  

This makes heat pumps and hybrid water heaters extremely cost-effective.

BayREN Rebates – Available in Much of the North Bay

The Bay Area Regional Energy Network (BayREN) covers:

• Sonoma County
  
• Napa County
  
• Marin County
  
• Solano County
  
• Contra Costa County
  
• Alameda County
  
• San Francisco
  
• San Mateo
  
• Santa Clara
  

Rebate options include:

• Up to $1,000–$2,000 for HVAC heat pump installations
  
• Up to $1,700 for heat pump water heaters
  
• Up to $300 for duct sealing or insulation improvements
  
• Up to $200 for smart thermostats
  

Many Santa Rosa and Napa homeowners use BayREN rebates in combination with federal credits.

3. Local Utility Rebates (PG&E and Others)

Northern California homeowners are heavily served by PG&E, which offers ongoing incentives for efficiency upgrades.

PG&E Rebates for Heat Pump Water Heaters

PG&E often provides rebates ranging from:

• $300–$800 for hybrid water heaters (depending on size and efficiency)
  

These rebates frequently pair with:

• BayREN
  
• TECH Clean California
  
• Federal tax credits
  

This can bring hybrid water heater costs down significantly.

PG&E Heat Pump HVAC Rebates

Rebates may include:

• $1,000–$2,000 for qualifying heat pump HVAC systems
  

Depending on availability, PG&E incentives may fluctuate annually.

Smart Thermostat Rebates

PG&E regularly offers:

• $50–$120 rebates for ENERGY STAR® smart thermostats
  

Since heat pumps and high-efficiency AC units perform best with smart thermostats, this is a great add-on.

4. Manufacturer Rebates

Leading HVAC manufacturers — such as Lennox, Mitsubishi, Daikin, and Carrier — frequently offer seasonal promotions.

These may include:

• Cash-back rebates
  
• Extended warranty offers
  
• Seasonal equipment discounts
  

These promos often run during spring and fall, when many homeowners schedule HVAC upgrades.

Jazz Heating, Air Conditioning and Plumbing can help you compare current offers and choose the best equipment at the best value.

5. How Much Can You Actually Save? (Examples)

Here are a few real-world examples of what Sonoma County homeowners typically save with incentives.

Example 1: Replacing a Gas Furnace & AC With a Heat Pump

• System cost: $12,000
  
• Federal tax credit: -$2,000
  
• BayREN rebate: -$1,000
  
• TECH Clean California: -$2,000
  
• Manufacturer promo: -$500
  

Final cost after incentives: $6,500
A savings of nearly 50%.

Example 2: Installing a Hybrid Water Heater

• System cost: $4,200
  
• Federal tax credit: -$1,200
  
• PG&E rebate: -$600
  
• TECH Clean California: -$1,000
  

Final cost after incentives: $1,400
A savings of over 65%.

Example 3: Adding a Smart Thermostat

• Thermostat cost: $250–$400
  
• PG&E rebate: -$50 to -$120
  
• BayREN rebate: -$200
  

Final cost: As low as $0–$100

Why California Encourages Heat Pumps and Hybrid Water Heaters

Heat pumps and heat pump water heaters are considered “super-efficient” because they move heat instead of generating it.

This means:

• Lower energy bills
  
• Lower carbon emissions
  
• Safer equipment (no combustion gases)
  
• Ideal performance in mild climates like Santa Rosa and Napa
  

California is gradually shifting away from natural gas appliances and toward electric high-efficiency systems. This makes incentives especially strong for homeowners who switch from gas to electric.

How to Qualify for Rebates

Most programs require:

• Installation by a licensed contractor
  
• Equipment that meets specific efficiency ratings
  
• Proof of purchase and installation
  
• Proper permitting (required for most HVAC and water heater installations)
  

Jazz Heating, Air Conditioning and Plumbing handles all documentation, ensuring you receive every rebate available.

Why Homeowners in Santa Rosa & Sonoma County Choose Jazz

Navigating rebate programs can be confusing. Our team has extensive experience helping homeowners:

• Choose qualifying equipment
  
• Complete rebate applications
  
• Maximize available incentives
  
• Install systems that fit California’s climate
  
• Replace outdated units with high-efficiency models
  

We proudly serve:

• Santa Rosa
  
• Rohnert Park
  
• Petaluma
  
• Windsor
  
• Napa
  
• Healdsburg
  
• Sebastopol
  
• And surrounding areas
  

Jazz provides honest recommendations and makes the upgrade process simple from start to finish.

Ready to Upgrade and Save? We’ll Help You Maximize Your Incentives

Whether you’re replacing an old AC unit, upgrading to a heat pump, or installing a hybrid water heater, now is one of the best times to take advantage of California incentives.

Call Jazz Heating, Air Conditioning and Plumbing today to schedule your consultation and learn which rebates you qualify for.