Alterations

The Energy-Smart Homes program promotes adoption of advanced energy measures and the transition to all-electric construction. The whole building electrification program aligns with California’s 2022 code and state efficiency decarbonization goals and trajectories, and provides property owners incentives for single family, duplex, townhome, ADU, or multifamily low-rise electrification alterations.

Alterations

The Energy-Smart Homes program promotes adoption of advanced energy measures and the transition to all-electric construction. The whole building electrification program aligns with California’s 2022 code and state efficiency decarbonization goals and trajectories, and provides property owners incentives for single family, duplex, townhome, ADU, or multifamily low-rise electrification alterations.

Energy-Smart Homes Whole Building Electrification

Whole Building Electrification alterations to existing single family and multifamily low-rise projects require a change in technology that includes conversion of all gas appliances and equipment to electric systems (replacing fossil fuel combustion equipment with heat pumps), including:

Heat pump space heating

Heat pump water heating
(In-unit or central heat pump water heater)

Induction Cooking
(Projects with existing electric cooking qualify without upgrading to induction cooking)

Electric or heat pump clothes dryers
(Bonus incentives available for heat pump clothes dryers)

Whole Building Electrification Alterations Incentives

Single Family Whole Building Electrification Alterations Incentives 2025 2026
Single Family Whole Building Electrification Alterations
Each property must install heat pump space heating, heat pump water heating, induction cooking, and an electric dryer (Properties with existing electric cooking qualify without upgrading to induction cooking).		 $4,250 TBD
HP Dryer Bonus $250 TBD
Electric Infrastructure Upgrade Bonus (per unit served)
Bonus can be awarded up to $1,000 and cannot exceed the total costs associated with the upgrade.		 $1,000 TBD

The program does not accept projects converting from propane to electric.

To qualify for 2025 incentive levels, projects must submit an application by November 3, 2025. Projects completing construction between November 4 and December 31, 2025 may still be eligible for program incentives.

Program funds are limited. Incentives are available on a first-come, first-served basis until funds are no longer available.

Whole Building Electrification Alteration Eligibility Requirements

To be eligible for Whole Building Electrification Alteration incentives, existing property owners must:

  • Complete whole building electrification alterations on an existing single family dwelling unit or multifamily low-rise building including:
    • Heat pump space heating (Mini-split heat pumps or residential central heat pumps SEER 15 or greater, HSPF 8.7 or greater) NOTE: HVAC equipment must utilize heat pump technology. Technology that utilizes electric resistance as the primary source of heating is not eligible.
    • Heat pump water heating NEEA Tier 2 or greater (multifamily low-rise can opt for in-unit or central system heat pump water heating)
    • Induction Cooking (Properties with existing electric cooking qualify without upgrading to induction cooking).
    • Electric clothes dryer (Bonus incentives are available for heat pump clothes dryers) NOTE: Heat pump clothes dryers do not require installation by a licensed contractor
    • Infrastructure upgrade (Not required, but bonus incentives are available)
  • Be located in the PG&E®, or SCE®, or SDG&E® electric service territory and pay the Public Purpose Program Charge
  • Cap all gas lines to the building(s) applying for whole building electrification alteration incentives
  • Have work completed by a licensed contractor
  • Meet minimum alteration criteria and equipment specifications
  • Complete and sign an online program participation agreement, including agreeing to program Terms and Conditions
  • Agree to not receive financial incentives for the same measures or scope of work from other CPUC resource-funded programs
  • Adhere to all applicable federal, state, and local laws and codes

Multifamily Low-Rise/ADU Whole Building Electrification Alterations Incentives

Multifamily Low-Rise/ADU Whole Building Alterations Incentives (per unit) 2025
Multifamily Low-Rise/ADU Whole Building Electrification Alterations
Each participating building/ADU must install heat pump space heating, heat pump water heating, induction cooking, and an electric dryer (Properties with existing electric cooking qualify without upgrading to induction cooking).		 $2,200
HP Dryer Bonus $250
Electric Infrastructure Upgrade Bonus (per unit served)
Bonus can be awarded up to $600 and cannot exceed the total costs associated with the upgrade.		 $600
Deed Restricted Affordable Multifamily Low-Rise Whole Building Alteration Incentives (per unit)  2025
Deed Restricted Multifamily Low-Rise Whole Building Electrification Alterations
Each participating building must remove all gas appliances and each dwelling unit in that building must install heat pump space heating, heat pump water heating, electric cooking, and an electric dryer 		 $2,200
Induction Cooking Bonus  $500
HP Dryer Bonus $250
Electric Infrastructure Upgrade Bonus (per unit served)
Bonus can be awarded up to $600 and cannot exceed the total costs associated with the upgrade.		 $600

The program does not accept projects converting from propane to electric.

To qualify for 2025 incentive levels, projects must submit an application by November 3, 2025. Projects completing construction between November 4 and December 31, 2025 may still be eligible for program incentives.

Program funds are limited. Incentives are available on a first-come, first-served basis until funds are no longer available.

Whole Building Electrification Alteration Eligibility Requirements

To be eligible for Whole Building Electrification Alteration incentives, existing property owners must:

  • Complete whole building electrification alterations on an existing single family dwelling unit or multifamily low-rise building including:
    • Heat pump space heating (Mini-split heat pumps or residential central heat pumps SEER 15 or greater, HSPF 8.7 or greater) NOTE: HVAC equipment must utilize heat pump technology. Technology that utilizes electric resistance as the primary source of heating is not eligible.
    • Heat pump water heating NEEA Tier 2 or greater (multifamily low-rise can opt for in-unit or central system heat pump water heating)
    • Induction Cooking
      • Units with existing electric cooking qualify without upgrading to induction
      • Deed restricted multifamily affordable housing projects are exempt from the induction requirement but must install electric cooking (no gas)
      • Deed restricted multifamily affordable units will receive a bonus of $500 per unit when induction cooking is installed
    • Electric clothes dryer (Bonus incentives are available for heat pump clothes dryers) NOTE: Heat pump clothes dryers do not require installation by a licensed contractor
    • Infrastructure upgrade (Not required, but bonus incentives are available)
  • Be located in the PG&E®, or SCE®, or SDG&E® electric service territory and pay the Public Purpose Program Charge
  • Cap all gas lines to the building(s) applying for whole building electrification alteration incentives
  • Have work completed by a licensed contractor
  • Meet minimum alteration criteria and equipment specifications
  • Complete and sign an online program participation agreement, including agreeing to program Terms and Conditions
  • Agree to not receive financial incentives for the same measures or scope of work from other CPUC resource-funded programs
  • Adhere to all applicable federal, state, and local laws and codes

Advanced Technology Bonuses

Advanced Technology Bonuses for Alteration Projects

To further advance the market towards clean energy technology and decarbonization, Energy-Smart Homes is offering Advanced Technology Bonuses to reduce design and installation costs and support Codes and Standards advancement. Projects are eligible for Advanced Technology Bonuses if the equipment was installed after May 24, 2024.

Whole Building Electrification Alteration Advanced Technology Bonus Incentives per Enrolled Dwelling Unit Single Family Multifamily Low-Rise ADU
Variable Capacity Heat Pump (VCHP)  $300 $300 $300
Heat Pump without Electric Resistance   $300 $300 $300
Integrated Heat Pump Space and Water Heating  $1,000 $1,000 $1,000
Low Global Warming Potential (GWP) Heat Pump  $800 $800 $800
Heat Pump Pool or Spa Heater
(per installed piece of equipment)		 $1,000 $1,000 N/A
Central Heat Pump Water Heater Design 
(per project/developer and must include full MEP design, costs, and documentation) 		 N/A $5,000 N/A
Central Heat Pump Water Heater Installation  N/A $500 N/A

Program funds are limited. Incentives are available on a first-come, first-served basis until funds are no longer available.

Additional Advanced Technology Bonuses available to projects installing after May 1, 2025

Whole Building Electrification Alteration Advanced Technology Bonus Incentives per Enrolled Dwelling Unit Single Family Multifamily Low-Rise ADU
Thermal Energy Storage $1,500 $1,200 $1,200
Induction Cooking with Integrated Battery $3,000 $3,000 $3,000
Electrical Load Management* $3,500 $3,500 $3,500
ERV or HRV with Bypass $2,000 $1,500 N/A
Continuous ERV or HRV with Override $1,000 $500 N/A

*Additional incentive available for projects keeping existing electrical service of 100 amps or less ($1,000 per single family lot, $500 per multifamily unit, and ADU unit)

Connect with us today to learn more about enrolling your whole building electrification new construction projects for Advanced Technology Bonuses: Connect Now!

Variable Capacity Heat Pump (VCHP)

Eligibility:

  • Variable capacity heat pump(s) with inverter technology
  • Single family and multifamily low-rise projects
  • CEE Tier 1 Efficiency Ratings (for applicable systems)

The program will pay the installation incentive upon receipt and verification of the following documents:

  • Spec sheet
  • AHRI sheet showing outdoor and indoor model numbers
  • Paid invoices

Heat Pumps without Electric Resistance

Eligibility:

  • Single family and multifamily low-rise projects
  • The entire system must be installed with no electric resistance
  • Space heating must be capable of meeting the Manual J heating design load without the use of electric resistance heating
  • HPWH must be sized to DHW load of the home
  • CEE Tier 1 Efficiency Ratings (for applicable systems)

The program will pay the installation incentive upon receipt and verification of the following documents:

  • Spec sheet
  • AHRI sheet showing outdoor and indoor model numbers
  • Space heating: Completed Manual J using ASHRAE design temperature for the area showing heating and cooling design loads
  • Paid invoices

Integrated Heat Pump Space and Water Heating

Eligibility:

  • A single heat pump that supplies DHW and space heating to the home
  • Equipment must be complaint with the California Energy and Mechanical Code
  • Secondary heat pump can be used to add cooling to the system
  • Single family and multifamily low-rise projects

The program will pay the installation incentive upon receipt and verification of the following documents:

  • Spec sheets for heat pump, water tank(s), and heating/cooling system
  • AHRI sheet showing outdoor and indoor model numbers (if applicable)
  • Paid invoices

Low-Global Warming Potential (GWP) Heat Pump 

Eligibility:

  • The GWP of the refrigerant used must be less than 750
  • Single family and multifamily low-rise projects
  • Installations must follow applicable safety codes: 2024 IMC Chapter 11 and ASHRAE Standard 15

The program will pay the installation incentive upon receipt and verification of the following documents:

  • Spec sheet showing refrigerant used
  • Paid invoices
  • Space heating and conditioning: AHRI sheet showing outdoor and indoor model numbers

Heat Pump Pool or Spa Heater (per installed piece of equipment)

Eligibility:

  • Only one heat pump is allowed per pool or spa. Multiple compressor systems are not allowed due to noise level and cost.
  • Projects are eligible for two incentives if one heat pump is installed for the pool and one heat pump is installed for the spa
  • Electric resistance is not allowed
  • Single family and multifamily low-rise projects

The program will pay the installation incentive upon receipt and verification of the following documents:

  • Spec sheet showing a minimum COP of 4.0
  • Paid invoices
  • Size of pool or spa (gallons)
  • Photo of the pool or spa cover

Central Heat Pump Water Heater Design Incentive/Installation Incentive

Eligibility:

  • Multifamily low-rise projects

The program will pay the installation incentive upon receipt and verification of the following documents:

  • Current Gas Water Heater Design quote including:
    • Description of Part
    • Material Price
    • Labor Cost
  • Central Heat Pump Water Heater Design for the provided Professional Engineer (PE) stamped system design, with the following:
    • Description of part
    • Price
    • Quantity/units
    • Final pricing
    • Quote date
    • Add/deduct alternate to establish the incremental cost of the work
  • Associated dimensioned plan sets stamped by a licensed PE. At minimum, the following should be provided:
    • Plumbing
    • Architectural
    • Mechanical

Thermal Energy Storage

Eligibility:

  • Single family, multifamily low-rise, and ADU projects

The program will pay the installation incentive upon receipt and verification of the following documents:

  • Spec sheet for all equipment installed in the thermal energy storage system
  • Pictures of the installed equipment
  • Paid invoices
  • Integrated Space and Water Heating:
  • Water storage tank spec sheet (must be 100 Gallons or larger)
  • Spec sheet showing JA13 Certified HPWH
  • Completed CA Energy-Smart Homes Thermal Energy Storage Form

Induction Cooking with Integrated Battery

Eligibility:

  • Single family, multifamily low-rise, and ADU projects

The program will pay the installation incentive upon receipt and verification of the following documents:

  • Spec sheet for installed range or stove
  • Equipment must contain an integrated battery of 3 kWh or larger
  • Cooktop must use only induction technology
  • Pictures of the installed equipment
  • Paid invoices

Electrical Load Management

Eligibility:

  • Single family, multifamily low-rise, and ADU projects

Eligible electrical load management strategies include a smart panel, smart breakers, or home energy management system (HEMS) with the ability to:

  • Measure the electrical usage at each circuit load in the home
  • Control the usage by turning the electrical usage on or off from a user interface, typically a mobile device
  • Integrate critical load management and backup power integration

The program will pay the incentive upon receipt and verification of the following documents:

  • Spec sheet for installed smart panel, smart breakers, or HEMS
  • Pictures of the installed equipment
  • Paid invoices
  • Completed Residential Service Upgrade Decision Tool
  • Picture of the existing panel

Bonus

  • Projects that install eligible load management equipment and keep the existing electrical service of 100 amps or less can receive a bonus incentive of 1,000 per lot for single family and $500 per ADU or multifamily unit.

ERV or HRV with Bypass

Installation incentives for an energy recovery ventilator (ERV) or heat recovery ventilator (HRV) with a bypass option are available for single family and multifamily owners. The installed equipment must meet the requirements of Title 24 Section 160.2(b)2Aivb and have a bypass or control that directly economizes with ventilation air based on outdoor air temperature limits specified in Table 170.2-G. Specific temperature limits can be found in the referenced table of the Energy Code.

Eligibility:

  • Single family and multifamily low-rise

The program will pay the installation incentive upon receipt and verification of the following documents:

  • Spec sheet for installed ERV or HRV
  • Picture of the installed equipment
  • Completed CA Energy-Smart Homes HRV with Bypass Form

Continuous ERV or HRV with Override

Installation incentives for an ERV or HRV with a manual override are available for single family and multifamily owners. The installed ERV or HRV must run continuously, meet the requirements of Title 24 Section 160.2(b)2Aivb and other applicable codes, and have a manual ON-OFF switch in the conditioned space or main electrical panel displaying the following text, or equivalent text: “This switch controls the indoor air quality ventilation for the home. Leave switch in the ‘on’ position at all times unless the outdoor air quality is very poor.”

Eligibility:

  • Single family and multifamily low-rise

The program will pay the installation incentive upon receipt and verification of the following documents:

  • Spec sheet for installed ERV or HRV
  • Picture of the installed equipment and override switch (located in conditioned space or main electrical panel)
  • Completed CA Energy-Smart Homes Continuous ERV or HRV with Override Form

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