Heat Pump Water Heater Guide: Rebates, Savings and Fit

How a heat pump water heater works

It looks like a regular tank with a small heat pump on top. A fan pulls in room air, the heat pump moves that heat into the water, and cooler, drier air comes out. When you use a lot of hot water at once, backup electric elements help.

BC heat pump water heater rebate

• Amount: up to $1,000 from BC Hydro.
• You must be replacing an electric water heater that is your home's main one.
• The model must meet NEEA's Advanced Water Heater Specification.
• The installer must be a licensed contractor with a GST number and a BC business licence for the trade.
• Apply within six months of your invoice date.
• Income-qualified? CleanBC's Energy Savings Program pays up to $3,500 (income level 1) for a NEEA Tier 2+ heat pump water heater, including gas-to-electric switches. Electric-to-heat-pump at income level 2 is up to $2,800. You can't combine it with the BC Hydro rebate for the same unit.
• Gas water heater, not income-qualified? Check FortisBC for current offers.

Outside BC, see your city's page. In the US, the federal 25C tax credit ended on December 31, 2025.

Will it fit your home?

• Space: it needs room air to pull heat from. Check the model's minimum room size, or plan for ducting or a louvered door.
• Temperature: it runs best in a space that stays above about 10°C, like most basements and utility rooms.
• Height: the heat pump on top makes it taller than a standard tank.
• Drain: it makes condensate, so it needs a drain nearby.
• Power: many need a 240V circuit. Some newer 120V plug-in models can reuse a standard outlet; ask your installer.
• Noise: the fan and compressor hum, so avoid putting it right next to a bedroom.

What does it save?

BC Hydro says ENERGY STAR heat pump water heaters use about 50% less energy on average than a standard electric water heater. Your dollar savings depend on how much hot water you use and your power rate. Ask your installer to estimate it from your own bills.

What to do next

1. Check your current tank: electric or gas, and how old.
2. Measure the space and check the model's install guide.
3. Confirm the model qualifies before you buy.
4. Keep your invoice and apply within six months.

FAQ

How much is the BC heat pump water heater rebate?

BC Hydro pays up to $1,000 when you replace your home's main electric water heater with a qualifying heat pump water heater. The model must meet NEEA's Advanced Water Heater Specification, and a licensed contractor must install it.

Can I get a rebate if I have a gas water heater?

Not from BC Hydro; its rebate is only for replacing an electric water heater. Income-qualified households can get up to $3,500 through CleanBC's Energy Savings Program for switching from gas. Otherwise, check FortisBC for current offers.

How much energy does a heat pump water heater save?

ENERGY STAR certified heat pump water heaters use about 50% less energy on average than a standard electric water heater, according to BC Hydro.

Does a heat pump water heater work in a cold basement?

It works, but it pulls heat from the room air, so it cools and dries the space around it. It runs best in a space that stays above about 10°C with room around the unit. Check the model's install guide for minimum room size and temperature.

Is there a US tax credit for heat pump water heaters?

Not anymore. The federal 25C credit ended on December 31, 2025. Some utilities still pay rebates; for example, SMUD pays up to $4,000 for replacing a gas water heater.

Sources, checked September 26, 2026: BC Hydro heat pump water heater rebate · BC Hydro home renovation rebates · CleanBC Energy Savings Program requirements (July 6, 2026) · SMUD rebates · IRS 25C credit