Heat Pump Water Heaters


What is a Heat Pump Water Heater?


Why install a Heat Pump Water Heater?

Water heating accounts for a significant amount of energy used in our homes. Most homes in Palo Alto use natural gas to power their water heaters. Natural gas is a fossil fuel that emits GHGs into the atmosphere when used. Palo Alto is committed to providing clean energy. We have taken actions that have led to a carbon neutral electricity supply and today most of our electricity is coming from wind, solar and hydro resources. We are here to help if you are ready to make the switch.

  • Water heating is the largest source of greenhouse gas emissions in most Palo Alto homes.
  • 25% of home energy use is from water heating
  • 90% of homes in Palo Alto have gas-powered water heaters.
  • Gas water heaters produce greenhouse gas emissions (GHGs) while electric HPWHs powered by Palo Alto's 100% carbon neutral electricity have a zero carbon footprint.
  • Electric HPWHs have fewer health and safety risks than gas water heaters, with reduced risk of backdrafting.  
  • For customers with a rooftop PV system, the cost for water heating using a HPWH is often lower than the cost of water heating with a gas tank water heater. 


The City of Palo Alto Utilities (CPAU) is currently offering a rebate of up to $1500 to residents who install a high efficiency, electric heat pump water heater (HPWH).


To participate in this program you must be a CPAU residential customer replacing a gas or electric water heater or installing a HPWH in an existing home. Rebate is not available for new homes. The new HPWH must meet Product Tier 3 or higher tier from the Northwest Energy Efficiency Alliance (NEEA) standards. See the qualified products list.

Rebate Funding Levels

Eligible residents that participate in the HPWH program can receive rebates for installation of a HPWH. Rebate funding is subject to availability and may change without prior notice.

Conditions Size of HPWH Tank Rebate
Replacing an existing gas water heater with a HPWH Up to 79 Gallons $1,200

80 gallons or more $1,500
Replacing an existing electric water heater with a HPWH 50 gallons or more $500

If you're ready to sign up for the program, please fill out the Heat Pump Water Heater Program Online Application before you begin your HPWH installation. A CPAU representative will contact you once we receive notification that your application has been submitted.

Heat Pump Water Heater Program Online Application

CPAU staff will review your application and, if approved, will send an email with instructions to submit the following required documents:

  • Copy of permit with final inspection signature
  • Invoice for purchase of HPWH
  • Invoice from contractor/plumber/electrician
  • Any photos that you would like to share (optional)

Contractor List

Contractor List

Note: This list is provided as a courtesy resource only. The City does not require or endorse the use of any of these firms. This list is not to be construed as exclusive, comprehensive or limiting in any way.

If you are a contractor interested in being added to this list, please contact: utilityprograms@cityofpaloalto.org

Both Electrical and Plumbing  Plumbing Work Only Electrical Work Only 

Allied Aire Service

(408) 934-8844

Awesome Plumbing Inc.

(650) 660-5352

Bayshore Electric

(650) 260-8658

Alternative HVAC Solutions

(650) 322-4328

Hansen A G Plumbing

(650) 323-4138


Bennett Plumbing

(650) 996-7264

Sahagun Plumbing

(650) 776-5240  



Cobalt Construction

(408) 272-8080

Wizard Plumbing and Drain

(650) 843-9911 

EJ Plumbing (Ask for Daniel)

(650) 787-1959; (650) 520-8718



(408) 623-7938


Lundy Solar and Roofing Co.

(408) 459-2273; (510) 682-2273


Steps to Install

Step One: Determine Whether a HPWH is Right for You

Our friends at the Northwest Energy Efficiency Alliance created a resource that allows you to identify the age of your water heater from the serial number. Alternatively, Palo Alto's trusted energy advisor, the Home Efficiency Genie, can help you with the age of your water heater or any HPWH questions.

Step Two: Complete the HPWH Online Application

To get started and to learn about eligibility, application rules and more, please visit the HPWH program application.

Step Three: Find a Contractor

CPAU provides a list of contractors in Palo Alto that have already installed or are able to install HPWHs in homes or businesses. If you're doing it yourself, please review the installation steps at HPWH installation webpage.

Step Four: Apply for a Permit 

Before installation, you or your contractor must apply for a permit from the City of Palo Alto. Read the Permit Submittal Checklist to get started.

Step Five: Collect your Rebate

Once your rebate application is approved and your project is complete, you will need to submit all required documentation using the link included in your application approval email to receive your rebate.