Upgrading your heating and cooling system is one of the largest home investments you'll make in the Bay Area — but a stack of rebates and tax credits can bring the out-of-pocket cost down significantly. This guide breaks down the incentives Therma Tech customers in San Jose, Santa Clara, and surrounding cities most commonly qualify for in 2026.
PG&E HVAC Rebates
PG&E offers rebates for high-efficiency heat pumps, smart thermostats, and whole-home electrification through its Energy Savings Assistance and Home Energy Rebate programs. Typical rebates Bay Area homeowners see include:
- Heat pump HVAC — up to $3,000 for qualifying central heat pump systems.
- Heat pump water heater — up to $1,000 when installed with an HVAC upgrade.
- Smart thermostat — $75–$120 instant or mail-in rebate.
Amounts vary by program year and equipment tier. We confirm current PG&E rebate eligibility during every replacement quote — see the energy rebate assistance listed on our services page.
Bay Area Heat Pump Incentives (TECH Clean California)
TECH Clean California is the statewide heat pump incentive program funded by the CPUC. Bay Area single-family homeowners can typically stack:
- $1,000–$3,100 base incentive for a qualifying heat pump HVAC.
- Equity adder — additional incentive for income-qualified households.
- Bay Area Regional Energy Network (BayREN) home+ program — up to $5,000 for whole-home upgrades that include HVAC.
TECH incentives are paid directly to a participating contractor and deducted from your invoice — no waiting for a check. Therma Tech is a participating installer, so you see the discount up front.
Federal Tax Credits for AC & Heat Pump Installation
The Inflation Reduction Act's Energy Efficient Home Improvement Credit (25C) is in effect through 2032. Homeowners can claim:
- 30% of the project cost, up to $2,000/year for qualifying heat pumps and heat pump water heaters.
- Up to $600/year for qualifying high-efficiency central air conditioners.
- Up to $600/year for a natural-gas furnace meeting CEE highest-tier efficiency.
The credit is nonrefundable and claimed on IRS Form 5695. Equipment must meet current CEE efficiency tiers — we spec models that qualify whenever budget allows.
Stacking It All Together
A typical San Jose heat pump replacement in 2026 might combine a $3,000 PG&E rebate, a $2,500 TECH Clean CA incentive, and a $2,000 federal tax credit — reducing a $15,000 project to roughly $7,500 out-of-pocket. Actual amounts depend on equipment selection, home characteristics, and program availability at the time of install.
Get a Rebate-Optimized Quote
Every Therma Tech replacement quote includes a written breakdown of the rebates and credits your home qualifies for. Start with an instant online estimate, review our heat pump installation service, or contact us at (408) 629-5400.