City of Palo Alto Utilities Heat Pump HVAC Rebate
$2,500 standard; $5,000 for REAP-eligible residents. Funds are reserved for 120 days after pre-approval. Final application must be submitted within 90 days of the final inspection.
Replace your fossil fuel heating system with an efficient electric heat pump HVAC system and receive up to $5,000. Standard customers receive $2,500, while income-qualified residents receive the maximum amount.
Guidance
Replace an existing fossil fuel heating system with an efficient, fully electric heat pump HVAC system to receive a rebate of $2,500 to $5,000 from the City of Palo Alto Utilities. The maximum rebate amount is available for income-qualified residents. Pre-approval or fund reservation is highly recommended before starting the installation.
Homeowner Tasks
- Verify utility account and property ownership eligibility
You must be the property owner and an active City of Palo Alto Utilities residential customer receiving both electric and gas utility services.
- Capture pre-installation photos of the existing system
Take a zoomed-out photo of the existing fossil fuel heater/furnace and a close-up photo of its nameplate clearly showing the serial number, model number, manufacture date, fuel type, and capacity.
- Submit a rebate reservation application
Apply for pre-approval or fund reservation prior to the installation, using the pre-installation photos of your existing equipment.
- Provide equipment receipts
If you purchased the heat pump equipment separately from the contractor's installation invoice, you must provide the purchase receipts.
Contractor Tasks
- Install a qualifying fully electric heat pump system
The new system must be fully electric with a minimum rating of 15 SEER and 8.5 HSPF. Dual-fuel systems with gas backup do not qualify.
- Cap the old gas line and take a photo
Cap the gas line from the previous heating equipment and capture a clear photo of the capped line for the final rebate application.
- Take post-installation equipment photos
Take a zoomed-out photo of the outdoor condenser, a clear photo of the condenser nameplate (showing serial, model, manufacture date, and NRTL certification mark), and zoomed-out photos of the indoor units/air handlers.
- Provide a detailed, itemized final invoice
The invoice must show the total installed cost, itemized costs (if multiple appliances were installed), make and model numbers, your contractor license and contact information, and the installation address.
Qualification
- AHRI matched pair
- Has income-qualified portion
$5,000 for REAP-eligible residents. Standard rebate is $2,500.
- Pre-approval required
- Permit required
- Fuel switching required
Must replace a fossil fuel-based heating source (e.g., gas furnace) with a heat pump HVAC system.
Not required: energy star certified equipment · income-qualified · contractor enrollment required
How to Submit
Pre-approval or fund reservation is recommended prior to installation. Submit the final invoice demonstrating the removal of the fossil fuel system and the installation of the new electric heat pump.