# How does the SMUD heat pump rebate work?

> SMUD heat pump rebate explained: $3,000, $2,000 or $1,000 by system and fuel, the equipment and Title 24 rules, Go Electric add-ons and how the claim is filed.

URL: https://tulesacramentoheatpump.com/guide/smud-heat-pump-rebates/

Learn

What SMUD pays on a ducted heat pump, which homes and systems qualify, the permit and Title 24 steps the claim depends on, the Go Electric panel and circuit add-ons, and who files the paperwork.

SMUD pays $3,000 when a qualifying variable-stage heat pump replaces gas heating, $2,000 for a qualifying two-stage system of at least 15.2 SEER2, and $1,000 when an existing electric system is upgraded to a two- or variable-stage heat pump. Single-stage equipment earns nothing. The money is subject to funding.

[Tule Sacramento Heat Pump](https://tulesacramentoheatpump.com/) installs ducted heat pumps in SMUD territory and the rest of the Sacramento region, with the work carried out by licensed and insured contractors. Rebate-qualified installations are available on request. This guide sets out what SMUD requires, step by step, so you can tell early whether a project will qualify.

Key takeaways

- Gas-to-electric: $3,000 variable-stage, $2,000 two-stage (15.2 SEER2 or better)
- Electric-to-electric: $1,000 on a qualifying two- or variable-stage system
- Qualifying equipment must be installed and submitted by a participating contractor in the SMUD Contractor Network
- A permit, a passing Title 24 test on the CF3R form, a connected thermostat and R-8 on any new ducts are all required
- Go Electric adds money for panels, subpanels and circuits, on gas-to-electric projects only
- SMUD lets the contractor apply the rebate upfront on the invoice

## What SMUD pays, by system

The amount depends on two things: what the heat pump replaces, and how its compressor runs.

| What the heat pump replaces | Compressor | SMUD rebate |
| --- | --- | --- |
| Gas heating (furnace) | Variable-stage | $3,000 |
| Gas heating (furnace) | Two-stage, 15.2 SEER2 or higher | $2,000 |
| An existing electric system (older heat pump or electric resistance heat) | Two-stage or variable-stage | $1,000 |
| Anything | Single-stage | Not eligible |

### Why the compressor tier matters

A single-stage compressor runs at full output or not at all. Two-stage units add a low setting, and variable-stage (inverter) units adjust continuously, running slowly for long stretches. SMUD’s tiering rewards equipment that can meet a small load on a mild spring or fall day without constant cycling, and run slowly through its 5 to 8 p.m. summer peak instead of at full power. The [variable-speed heat pump page](https://tulesacramentoheatpump.com/variable-speed-heat-pump/) explains how the compressors differ in practice.

## Who qualifies

The rebate is tied to the electric account, not the city on the mailing address.

- **An active SMUD account** on a home individually metered by SMUD.
- **SMUD territory.** The Energy Commission’s utility maps put Sacramento, Elk Grove, Folsom, Citrus Heights, Rancho Cordova, Galt, Carmichael, Fair Oaks, Arden-Arcade, Orangevale, Antelope, North Highlands and Rio Linda in it. SMUD also serves small adjoining parts of Placer and Yolo counties, so edge parcels are confirmed by the bill.
- **Not Roseville or PG&E areas.** Roseville Electric customers and PG&E electric customers in West Sacramento, Davis, Rocklin and El Dorado Hills can’t use it. Their options are in the [California rebate guide](https://tulesacramentoheatpump.com/guide/california-heat-pump-rebates/).

## The equipment and installation rules

Each of these is a condition of payment, and most of them are also good practice for any change-out.

### Equipment

- A two-stage or variable-stage compressor; two-stage systems need at least 15.2 SEER2.
- A Wi-Fi, seven-day programmable connected thermostat.

### Ducts

- A passing Title 24 verification, recorded by an ECC-Rater on the CF3R form. For a heat pump change-out that means duct leakage, refrigerant charge and airflow.
- Any new ductwork insulated to at least R-8.

Existing ducts can stay; homeowners ask whether old ductwork blocks the rebate, and SMUD’s terms don’t require new ducts, only a passing test. The [ductwork page](https://tulesacramentoheatpump.com/heat-pump-ductwork/) covers sealing and repair when the test fails.

### Permit and installer

- A building permit with its inspections closed.
- Qualifying equipment installed by a participating contractor in the SMUD Contractor Network, who also submits the rebate. Efficiency First California may carry out a field quality-control check on the finished job.

> Who files the claim
>
> You do not apply for this rebate yourself. The participating contractor submits it, and SMUD allows that contractor to offer the amount upfront as a discount on the invoice. Ask any bidder whether they are in the SMUD Contractor Network and how the rebate will appear on their quote.

## How a rebate-qualified project runs

The order matters, because the claim depends on records created along the way.

1. **Confirm the account and the fuel.** SMUD electric service, and whether the heat pump replaces gas heat or an electric system, which sets the amount.
2. **Size and select.** A load calculation, then a two- or variable-stage system that meets the SEER2 floor, with a connected thermostat.
3. **Pull the permit.** City of Sacramento, Sacramento County, Elk Grove, Folsom, Citrus Heights or Rancho Cordova, depending on the parcel. The [permit guide](https://tulesacramentoheatpump.com/guide/heat-pump-permit-title-24/) lists each office.
4. **Install and commission.** Refrigerant charge and airflow are set, and any new ducts go in at R-8.
5. **Verify.** The ECC-Rater tests the system and registers the CF3R.
6. **Close and submit.** The inspector signs off, and the contractor submits the rebate.

Plan a heat pump that qualifies

Rebate-qualified SMUD installations are available on request; equipment, thermostat and testing are set up to meet the program's terms from the start.

## Go Electric: panels, subpanels and circuits

On top of the heat pump rebate, SMUD’s Go Electric program offers additional rebates for electrical work that supports going electric. Its rules are narrower than the main rebate.

- **Gas-to-electric only.** The project must replace an existing gas furnace or gas water heater with a qualifying heat pump. A heat pump-for-heat pump replacement does not qualify.
- **Circuits and subpanels** require that gas-to-electric conversion.
- **A panel upgrade** of up to 200 amps counts toward the program when the home is made all-electric ready, with the panel plus circuits for future electric appliances.
- **Listed circuits** include a dryer, a cooktop or range and an EV charger; the heat pump’s own circuit is not on SMUD’s list.

SMUD’s own pages state different caps for the combined Go Electric amount, so the figure for a given project is confirmed with SMUD rather than assumed. The [electrical panel guide](https://tulesacramentoheatpump.com/guide/heat-pump-electrical-panel/) explains when an upgrade is needed in the first place.

## Stacking, income programs and timing

SMUD says its rebates can be combined with statewide and federal incentives. In practice there is little left to combine with: TECH Clean California and the federal HEEHRA rebates are closed, and the federal 25C tax credit ended for equipment placed in service after December 31, 2025.

### Income-qualified help

For income-qualified customers, SMUD offers the Energy Assistance Program Rate, a monthly bill discount, and an Energy Saver Bundle with a no-cost in-home energy evaluation. Neither is an equipment rebate, and no income-qualified heat pump bonus was found in SMUD’s programs.

### Funding

SMUD pays subject to funding availability and lists no deadline. Terms can change, which is why eligibility is confirmed per project against SMUD’s current page before equipment is ordered.

## What the rebate means for a budget

On a typical Sacramento-area conversion of about $15,000 to $24,000 before rebates, the $3,000 variable-stage rebate narrows the price gap between variable-stage and two-stage equipment. The [conversion cost guide](https://tulesacramentoheatpump.com/guide/gas-furnace-to-heat-pump-conversion-cost/) and the [replacement cost guide](https://tulesacramentoheatpump.com/guide/heat-pump-replacement-cost-sacramento/) show where it fits.

To plan a qualifying system, call (916) 516-1454 or [request an estimate](https://tulesacramentoheatpump.com/contact/), or start with the [cost estimator](https://tulesacramentoheatpump.com/tools/heat-pump-cost-estimator/), which shows SMUD’s rebate next to the budget range.

## Questions about this guide

### Does SMUD pay its heat pump rebate on a dual fuel system that keeps the gas furnace?

SMUD's published terms describe gas-to-electric and electric-to-electric heat pump systems and do not state whether a dual fuel setup, where the gas furnace stays as backup, qualifies. Because the furnace is not removed, eligibility should be confirmed with SMUD before the equipment is chosen rather than assumed.

### Can a home in Roseville, Davis or West Sacramento get the SMUD heat pump rebate?

No. The rebate needs an active SMUD account on a home individually metered by SMUD. Roseville is served by Roseville Electric, and West Sacramento, Davis, Rocklin and El Dorado Hills by PG&E. A few parcels near territory edges in Placer and Yolo counties are SMUD customers, so the electric bill, not the city name, settles it.

### What happens to the SMUD rebate if the duct test fails?

The rebate waits until the job passes. SMUD requires the Title 24 verification to pass and be recorded on the CF3R form, so failing ducts are sealed or repaired and retested first. Any new ducts added along the way must be insulated to at least R-8. A passing test with the permit closed is what lets the claim go in.

Want this answered for your house?

Call with your current system, the rooms that bother you and your ZIP code.

## Related service

Furnace to heat pump conversion

One ducted heat pump in place of the gas furnace and the central AC, sized from a load calculation and tested to Title 24.

## More guides

- Learn [What heat pump rebates are still available in California for Sacramento-area homes?](https://tulesacramentoheatpump.com/guide/california-heat-pump-rebates/)A program-by-program status check for the incentives that used to stack on a heat pump, what each electric utility in the region offers, the income-qualified help that remains, and how to budget when no rebate applies.
- Cost Guide [How much does it cost to convert a gas furnace to a heat pump in Sacramento?](https://tulesacramentoheatpump.com/guide/gas-furnace-to-heat-pump-conversion-cost/)What a furnace-and-AC to heat pump conversion typically costs around Sacramento, which parts of the job carry a public figure, what the gas side adds, and how SMUD's gas-to-electric rebate changes the net.
- Cost Guide [What does it cost to replace a heat pump in Sacramento?](https://tulesacramentoheatpump.com/guide/heat-pump-replacement-cost-sacramento/)SMUD's own median for replacing an older heat pump or electric heat with a new heat pump, why individual jobs land far from it, the parts of a replacement price with a public figure, and the one rebate still open.
- Learn [When does a heat pump need an electrical panel upgrade?](https://tulesacramentoheatpump.com/guide/heat-pump-electrical-panel/)What a heat pump adds to a home's electrical load, how a service-load calculation decides whether the panel can carry it, what an upgrade typically costs, and where SMUD's panel and circuit rebates fit.
- Learn [What does a heat pump permit in Sacramento involve, and what does Title 24 check?](https://tulesacramentoheatpump.com/guide/heat-pump-permit-title-24/)The permit office for each part of the region, what the City of Sacramento's standard change-out permit allows, every Title 24 test a change-out carries, and how SB 222 reshapes permits from 2027.