SMUD Heat Pump and Water Heater Rebates

Save Up to $4,000 in 2026

Old heating and air conditioning units are inefficient and often cost you hundreds of dollars in repairs and raise your utility bills. Thus, upgrading your heating, cooling, or water heating systems is one of the smartest investments you can make in your home, especially with enhanced rebates now available. If you’re ready to replace your unit, our professionals at Mac's Heating & Air have the industry knowledge to find the best rebate possible.

SMUD offers rebates for residential heat pump installations and heat pump water heaters. Beginning in February of 2026, SMUD has increased rebate levels to help Sacramento-area homeowners offset the cost of upgrading to high-efficiency electrical systems. 

To receive these rebates, you must have your qualifying air conditioning and/or heat pump system installed by a participating contractor in the SMUD Contractor Network, which is us. 

By making services more cost-effective without sacrificing quality, our customers enjoy the best of both worlds. If you’re planning to upgrade your furnace, air conditioner, or water heater, now is the time to act. Contact our knowledgeable team at (916) 794-8884 today!

Heating and Cooling Rebates

SMUD offers enhanced rebates for homeowners upgrading to high-efficiency heat pump systems, whether you’re replacing gas equipment or improving an existing electric setup.

Heat Pump Conversion (Gas-to-Electric)

Considering replacing a gas furnace or AC system with an all-electric heat pump?

Make the switch from gas to electric and maximize your savings:

• $3,000 Rebate – Variable-speed package, split, or mini-split systems
• $2,000 Rebate – Two-stage package or split systems

Heat Pump Upgrade (Electric-to-Electric)

Already using electric? 

Upgrade to a more efficient system and still qualify:

• $1,000 Rebate – Variable-stage or two-stage heat pump systems

These rebates apply to qualifying systems installed on or after February 1, 2026.

To qualify, your system must be installed by a participating contractor in the SMUD Contractor Network, and Mac's Heating & Air is proud to be part of that network.

Heat Pump Water Heater (HPWH) Rebates

Upgrading to a heat pump water heater can lower your energy use year-round. SMUD is offering rebates to make the transition more cost-effective.

HPWH Conversion (Gas-to-Electric)

• $3,000 Rebate – 50-gallon or larger models
• $3,500 Rebate – 65-gallon or larger models
• $4,000 Rebate – 80-gallon or larger models

HPWH Upgrade (Electric-to-Electric)

• $1,000 Rebate – All sizes when upgrading an existing electric unit

These incentives are designed to encourage energy-efficient electrification across Sacramento-area homes, helping homeowners reduce long-term utility costs while modernizing their systems.

Why These Rebates Matter in 2026

Federal clean energy tax credits expired in December 2025, and state programs such as Tech Clean California have exhausted available funding and are not accepting new reservations.

That makes SMUD’s increased rebate offerings especially important for homeowners looking to upgrade. These local utility rebates now offer one of the most significant savings opportunities for HVAC and water heater electrification projects.

If funding availability or program details change, our team stays up to date so you don’t have to.

Ready to Claim Your Rebate?

If you're considering a heat pump HVAC system or a heat pump water heater, now is an excellent time to move forward, as enhanced SMUD rebates are available.

Call (916) 794-8884 to schedule your estimate with Mac's Heating & Air and find out how much you could save.