Sacramento homeowners installing qualifying HVAC equipment in 2026 can stack three different incentive programs. Exact dollar amounts change periodically — we'll quote the current program values at the time of your install.
SMUD heat-pump rebates. SMUD offers rebates for qualifying ducted heat-pump and heat-pump water-heater installations, typically in the $1,500 to $3,000 range for residential ducted heat pumps. Rebates are paid after installation upon submission of AHRI-matched equipment documentation and proof of installation by a SMUD-certified contractor. SMUD also runs periodic rebates on qualifying smart thermostats, ductless mini-splits, and duct sealing.
Federal §25C Energy Efficient Home Improvement Credit. The 2023 Inflation Reduction Act updated §25C to a 30 percent tax credit on qualifying heat-pump equipment and installation, capped at $2,000 per year. Heat-pump water heaters qualify under the same $2,000 cap. Insulation, windows, doors, and home-energy audits have their own separate annual caps within the broader §25C program.
IRA High-Efficiency Electric Home Rebate (HEEHR). For income-qualified households (under 150 percent of area median income), HEEHR can cover up to $8,000 of a qualifying heat-pump install and up to $1,750 of a heat-pump water heater. This program launched on a state-by-state rollout; California's implementation is through the California Energy Commission. HEEHR rebates are paid at the point of sale rather than after the fact.
Stacking rules: the three programs combine in most cases, but HEEHR and §25C can't claim the same dollars of installed cost — §25C claims the cost net of HEEHR and SMUD rebate.
We'll build the specific rebate stack into the written quote so the net cost is clear before you sign anything.