Heat Pump HVAC Rebate Program

The rebate amounts you qualify for depend on your household income.

According to the Department of Housing and Urban Development low-income household are defined as below 80% of the median income for the county or metro area. Moderate-income households are between 80% and 120% of the area median income (AMI). The current income limits for Albany are listed below.

Household income should be calculated by combining the "adjusted gross income" of all people residing in the home. Adjusted gross income can be found on line 11 of Form 1040. Household size is the total number of people in the home (including children and non-family members).

The rebate application includes a space to identify if your household is low or moderate income. If you select this option, you will be sent a form to prove your income and will be required to submit your most recent tax return. If you have any questions or need help with this process please reach out to mplouse@albanyca.org or (510) 528-5754.

Rather than generating heat like gas-powered furnaces do, electric heat pumps simply move it from one area to another. Heat pumps use fluids called refrigerants that are excellent at absorbing and releasing heat. They can absorb and concentrate heat from the atmosphere even when the temperature is very cold.

When your home is cold, the heat pump moves heat from outside indoors. When your home is too hot, a heat pump can cool it down by transferring the heat outdoors. This technique makes heat pumps much more efficient than gas furnaces, saving energy and money, and reducing greenhouse gas emissions.

In Albany, our electricity comes from carbon-free and renewable sources which are much cleaner than fossil fuels, such as natural gas. Most Albany homes emit about one ton of carbon every year just from their gas furnace. That's like driving from Albany, CA to Albany, New York. Heat pumps allow you to heat and cool your home with clean electricity and zero emissions. Learn more about electrification at the Albany Home Electrification Guide Website.

Heat pumps can also lower your utility bill, especially if your home if well-insulated or if you have solar panels. Rebates for insulation are available through BayREN.

Ducted heat pumps distributed warm or cool air throughout the house using ductwork. Heat pumps can easily be connected to existing ductwork if a home already has a ducted central heating system. Ducted systems can be identified by multiple air vents in the floors and walls throughout the home.

Ductless heat pumps work instead by using a fan to blow air directly from the heat pump unit. These are generally used to replace existing wall or floor furnaces. Ductless systems can only heat the room where the unit is located, but multiple units can be placed throughout the house.

If you currently have a ductless HVAC system, it is sometimes possible to replace it with a ducted heat pump. This provides centralized, whole house heating or cooling, however it is more expensive.

Ductwork, especially older ductwork, can often leak, which leads to higher bills, worse indoor air quality, and a less comfortable living space. BayREN offers a Duct Replacement rebate of up to $1,150 for duct sealing.

In order to apply, you must first receive a permit for your project, then submit your rebate application. Fill out the Heat Pump HVAC Rebate Application. The homeowner may fill out the application or the contractor may do it on their behalf.

We will verify your eligibility and then reserve your rebate funds for 3 months while your project is completed and the work is inspected by our building inspector. You may receive two 1 month extensions for a total of up to 5 months. Once you've passed inspection, submit your approved inspection record form and your W-9. Your rebate check will then be mailed to you!

All rebates over $600 are considered taxable income by the IRS. As such, we are required to collect W-9's from all participants so that we can send 1099 Forms with the rebate information at the end of the year. The impact this will have on your specific tax liability depends on your personal situation and we recommend speaking to a tax professional to understand whether and how much your rebate may be taxed.

Any personal information provided on a W9 will be used by the Finance Department for tax reporting purposes only. These files will be stored on a secure drive that can only be accessed by those with proper authorization.

The TECH (Technology and Equipment for Clean Heating) Program is now offering a $1000 rebate per heat pump unit (up to $2000 per home).

BayREN offers a wide variety of rebates for electrification and energy efficiency. This includes $400 to replace a wall/floor heater or a central heating system with A/C. Central systems without A/C are not eligible.

To be eligible for these rebate programs, you must work with a contractor who is registered with the programs. You can go to Find an Energy Professional to find registered contractors. Eligible projects may receive the BayREN, TECH, and Albany rebates.

A federal tax credit of up to $2000 is now available for heat pump installations.

Learn more at our Incentive Roundup page on the City of Albany's Home Electrification Website.

Contractors who register with BayREN after June 1st, 2022, will be eligible for a $750 signing bonus from the City of Albany. To be eligible, contractors must have an active Albany business license at the time of registration. When you've completed your registration, you can fill out the Contractor Signing Bonus Application.

Why Register

BayREN is a collaboration of the 9 counties that make up the San Francisco Bay Area to provide regional-scale energy efficiency programs, services, and resources. BayREN offers up to $5,000 in rebates for Bay Area homeowners who complete home energy improvements such as installing highly efficient furnaces, water heaters, insulation, or duct replacements using a BayREN participating contractor. By registering with BayREN, you can offer your clients access to these rebates.

BayREN also offers a $1,000 rebate paid directly to contractors for each Heat Pump Water Heater they install! Registering gives you access to free training about energy efficiency, a place on their database of registered contractors, and the benefits of their marketing and outreach.

How to Register

Visit https://www.bayren.org/partner-us/contractors to register. To register you must:

• Make an account
• Upload basic business documents (contractors license, W-9, etc).
• Complete 4-6 hours of online trainings (available on demand)

Once you're registered, you'll be listed on the BayREN database and be able to offer rebates to your clients. An experienced BayREN contractor will assist you with the rebate filing process for your first three projects. In addition to Albany's $500 signing bonus, BayREN offers a $500 bonus to minority, women-owned businesses, and contractors that offer services in another language.