Last updated: March 30, 2026
HEAR program status: EXHAUSTED — California's HEAR initial reservation capacity was exhausted as of late February 2026. The California Energy Commission (CEC) is no longer accepting new applications — waitlist only. California is one of only three states to exhaust its initial HEAR allocation (along with Vermont and Rhode Island).
HOMES program status: OPEN — California's HOMES program is a separate pathway and remains open for applications via the CEC. This is now the primary program route for LMI clients.
California administered HEAR through the California Energy Commission (energy.ca.gov). The program used a reservation-based model, and demand far outpaced the initial allocation — by late February 2026, all reservation capacity had been claimed. California joins Vermont and Rhode Island as the first three states to exhaust initial HEAR funds.
The CEC has not announced a timeline for additional funding tranches. The DOE has authority to release supplemental allocations, but this is not confirmed for California at this time. Practitioners should plan as though HEAR is unavailable for the foreseeable future.
If you or your clients had a reservation in the system before exhaustion, that reservation may still be honored. Contact the CEC directly (energy.ca.gov) to verify the status of any pending reservations before proceeding with or canceling an install.
California's population size (40M+), its aggressive clean energy policy environment, and pre-existing contractor infrastructure meant demand for HEAR was enormous from day one. The CEC also had existing relationships with BPI-certified auditors and HVAC contractors from earlier state programs, which accelerated enrollment and application volume. This is a structural demand problem, not an administrative one.
California's HOMES program (Home Owner Managing Energy Savings) is administered separately from HEAR through the CEC, and it remains open. HOMES is now the primary federal program pathway available for California clients — particularly LMI households seeking deep retrofit support.
HOMES rewards whole-home energy savings rather than individual appliance replacements. Two pathways exist:
| Savings Level | Market-Rate Rebate | LMI Rebate (<80% AMI) | Notes |
|---|---|---|---|
| 20–35% modeled energy savings | Up to $2,000 | Up to $4,000 | Requires approved energy model and BPI/approved auditor |
| 35%+ modeled energy savings | Up to $4,000 | Up to $8,000 | Deep retrofits; older CA housing stock often qualifies at this tier |
California's housing stock is highly varied by climate zone. Inland homes (Sacramento Valley, Central Valley, Inland Empire) that were built with minimal insulation and rely on gas furnaces often hit the 35%+ threshold when heat pumps, air sealing, and insulation are combined. Coastal homes may find the 20–35% tier more achievable. Either way, HOMES is the primary LMI pathway open right now.
Federal tax credits are unaffected by California HEAR exhaustion. They are available to all income levels with federal tax liability and remain the most accessible part of the current stack for market-rate clients.
| Measure | Credit | Annual Cap | Income Limit |
|---|---|---|---|
| Heat Pump HVAC (25C) | 30% of cost | $2,000/year | None |
| Heat Pump Water Heater (25C) | 30% of cost | $2,000/year | None |
| Insulation & Air Sealing (25C) | 30% of cost | $1,200/year | None |
| Electrical Panel (25C) | 30% of cost | $600/year | None |
| Home Energy Audit (25C) | 30% of cost | $150/year | None |
| Solar (25D) | 30% of cost | No cap | None |
California's investor-owned utilities (IOUs) and major municipal utilities run active rebate programs that are available to all income levels and are independent of HEAR. These rebates are available now and stack fully with 25C credits and HOMES. California's IOU rebates are among the most generous in the country.
Pacific Gas & Electric serves Northern and Central California, including the Bay Area, Sacramento Valley, San Joaquin Valley, and the Central Coast. Verify current amounts at pge.com/save before quoting.
| Measure | Rebate Amount | Requirements |
|---|---|---|
| Heat Pump HVAC (ducted air-source) | $400–$800 | ENERGY STAR; minimum SEER2/HSPF2 thresholds; higher tier for qualifying systems |
| Heat Pump Water Heater | $300–$600 | ENERGY STAR certified; replacing gas or electric resistance |
| Smart Thermostat | $75–$100 | ENERGY STAR; Wi-Fi enabled; compatible with PG&E demand response |
Southern California Edison serves most of Southern California outside Los Angeles city limits, including Orange County, Riverside County, San Bernardino County, and portions of LA County. Verify at sce.com/rebates.
| Measure | Rebate Amount | Requirements |
|---|---|---|
| Heat Pump HVAC (air-source) | $400–$750 | ENERGY STAR; efficiency thresholds; central ducted and ductless eligible |
| Heat Pump Water Heater | $300–$500 | ENERGY STAR certified; 40–80 gallon; replacing gas or electric resistance |
SDG&E serves San Diego County and portions of Orange County. Verify current amounts at sdge.com.
| Measure | Rebate Amount | Requirements |
|---|---|---|
| Heat Pump HVAC (air-source) | $300–$500 | ENERGY STAR; SDG&E territory; ducted and ductless eligible |
| Heat Pump Water Heater | $200–$400 | ENERGY STAR certified; must be replacing non-heat-pump unit |
LADWP is the municipal utility for the City of Los Angeles — the largest municipal utility in the US. LADWP does not receive rebates from SCE; LA city residents must use LADWP programs. LADWP's rebates are among the best in the state, reflecting LA's aggressive electrification goals. Verify at ladwp.com.
| Measure | Rebate Amount | Requirements |
|---|---|---|
| Heat Pump HVAC (air-source/mini-split) | $400–$700 | ENERGY STAR; LADWP service territory; ducted and ductless eligible |
| Heat Pump Water Heater | $400–$600 | ENERGY STAR certified; among highest HPWH rebates in state |
SMUD serves Sacramento County and portions of Placer and El Dorado counties. SMUD has an excellent heat pump rebate program reflecting Sacramento's hot summer climate and the utility's strong electrification goals. Verify at smud.org.
| Measure | Rebate Amount | Notes |
|---|---|---|
| Heat Pump HVAC | $500–$800 (estimated) | SMUD regularly updates; check smud.org for current schedule |
| Heat Pump Water Heater | $300–$500 (estimated) | ENERGY STAR certified; SMUD territory |
California has the most income-diverse AMI figures in the country. The San Jose MSA has the highest 4-person AMI of any metro in the US. Meanwhile, Fresno and many rural Central Valley communities have AMI well below national averages. This creates very different client profiles depending on where you work.
| Metro / Area | 4-Person 80% AMI | 4-Person 150% AMI | Notes |
|---|---|---|---|
| San Francisco-Oakland-Berkeley MSA | ~$118,000 | ~$221,250 | Alameda, Contra Costa, Marin, San Francisco, San Mateo counties |
| San Jose-Sunnyvale-Santa Clara MSA | ~$130,000 | ~$243,750 | Highest metro AMI in the US; Silicon Valley; very few LMI households by federal definition |
| Los Angeles-Long Beach-Anaheim MSA | ~$92,000 | ~$172,500 | LA and Orange counties; significant LMI population despite high median incomes |
| San Diego-Chula Vista-Carlsbad MSA | ~$96,000 | ~$180,000 | San Diego County; relatively high AMI but large LMI renter population |
| Sacramento-Roseville-Folsom MSA | ~$82,000 | ~$153,750 | Sacramento, Placer, El Dorado, Yolo counties; SMUD territory; strong HOMES opportunity |
| Fresno MSA | ~$60,000 | ~$112,500 | Fresno County; significant LMI concentration; Central Valley; high cooling loads |
| Bakersfield MSA | ~$62,000 | ~$116,250 | Kern County; PG&E territory; extreme heat; strong HPWH + HVAC demand |
| Riverside-San Bernardino-Ontario MSA | ~$80,000 | ~$150,000 | Inland Empire; SCE territory; hot climate; large housing stock |
| Rural California | Varies by county | Varies by county | Check HUD FY2026 tables at huduser.gov — rural county AMI often lower than nearby metro |
With HEAR exhausted, the available stack for California clients is 25C + utility rebates + HOMES (when applicable). This is still a very strong stack — particularly for clients in LADWP or SMUD territory.
| Program | Status | Value (HP HVAC) | Notes |
|---|---|---|---|
| California HEAR (CEC) | Exhausted | $0 (new applications) | Waitlist only; no confirmed new tranche |
| California HOMES (CEC) | Open | Up to $2,000–$4,000 | Whole-home; requires energy model; modeled pathway operational |
| 25C Federal Tax Credit | Available | $2,000/year | All income levels; requires tax liability |
| PG&E Rebate (if PG&E territory) | Available | $400–$800 | Verify at pge.com/save |
| SCE Rebate (if SCE territory) | Available | $400–$750 | Verify at sce.com/rebates |
| LADWP Rebate (if LA city) | Available | $400–$700 | Verify at ladwp.com; often the strongest option in LA city |
| SMUD Rebate (if Sacramento) | Available | $500–$800 | Verify at smud.org; among best in state |
| Best-case total (LADWP or SMUD + 25C) | — | $4,500–$6,000+ | On a $10,000–$15,000 HVAC install; HOMES adds up to $4,000 more when applicable |
Client: Homeowner in Los Angeles (LADWP territory). Income $140,000, family of 3 — above 150% AMI, not eligible for HEAR even if it were open. Replacing aging central AC with a 3-ton heat pump system. Project cost: $14,000.
Client: Family of 4 in Fresno (PG&E territory). Income $48,000 (~80% of Fresno AMI — LMI). Older 1970s ranch house with original gas furnace, poor insulation. Whole-home retrofit: heat pump HVAC + insulation + air sealing + HPWH. Total project: $22,000. Energy model projects 40% savings.
New HEAR funding tranches, HOMES program updates, and utility rebate changes in California are tracked weekly in the IRA Practitioner Brief. Free for the first three issues — reply to unsubscribe at any time.
Last updated: March 30, 2026. Program details subject to change. Verify current rebate amounts and program status with the CEC and your client's utility before advising clients. HEAR status as reported by the California Energy Commission as of late February 2026.