What SMUD pays
These figures come from the Heating and cooling rebates page of the Sacramento Municipal Utility District (SMUD), which we read on October 2, 2026. The system must be installed by a participating contractor in the SMUD Contractor Network, and rebates depend on available funding.
Variable-stage heat pump, gas to electric
Replacing a gas heating system.
Two-stage heat pump, gas to electric
At least 15.2 SEER2. Replacing a gas heating system.
Heat pump upgrade, electric to electric
A two-stage or variable-stage heat pump replacing an electric system.
Go Electric panel and circuit work
For a smart panel, subpanel or new circuit. A gas-to-electric conversion is required for the subpanel and circuit rebates.
What it really costs here
SMUD publishes the median price its customers paid for single-measure heat pump projects over the past 12 months: $18,804 for gas to electric, with a range from $3,500 to $65,620, and $17,336 for an electric upgrade. Ducted systems ran higher ($21,296 median) than ductless ($15,980). So a $3,000 rebate covers roughly one-sixth of a typical gas-to-electric job. The rebate is real money, but it is not the main number on the quote.
Pick the right compressor type
The $1,000 gap between a variable-stage and a two-stage heat pump is SMUD's way of rewarding a unit that adjusts its output smoothly, which usually runs quieter and holds a steadier temperature. A two-stage unit has two settings. Ask your contractor to quote both, with the price difference, and compare it to the $1,000. Both must come from a participating contractor in the SMUD Contractor Network, and your contractor provides the rebate application for your signature and submits it for you. Some contractors take the rebate off the price up front and collect it from SMUD afterward, so ask.
Why the quotes vary so much
SMUD lists the factors it sees behind the spread: system size, the size of the home, the efficiency rating, new ducts, the number of mini-split heads, moving the equipment, filtration, zoning, enlarged returns, asbestos abatement, and whether the unit goes in a garage or an attic. It recommends getting at least three bids and checking what each includes, especially bids from contractors outside the program. A $3,500 job and a $65,620 job are both in its data, so the bid that looks cheapest may leave out the ducts.
Your utility: SMUD
SMUD is Sacramento's community-owned electric utility and it sets these amounts. SMUD's rebate center is at 916-732-7550 and its Advanced Home Solutions team at 916-732-5732, and its Home Performance Program bundles heating and cooling with other upgrades. SMUD says its heat pump rebates can be stacked with statewide and federal incentives, although the statewide TECH Clean California and federal HEEHRA programs for single-family homes are fully reserved and take requests on hold only. Compare with Glendale and Pasadena if you own property elsewhere in California.
Sacramento's climate and your gas furnace
Sacramento's average January low over 2015 to 2024 was 4.7°C (about 40°F), with a coldest recorded day of -3.0°C. That is colder than Los Angeles, but still mild enough for a standard heat pump to carry the house. Hot summers are the bigger load, which is where a heat pump replaces the air conditioner you may have been about to buy. Do not pay for a cold-climate premium here. Pay for a correct size and good ducts.
Federal money
The federal 25C and 25D tax credits ended after December 31, 2025. SMUD's own pages mention the credit for systems installed before December 31, 2025 and say it no longer applies after that date.
Installers in Sacramento
These Sacramento heat pump and HVAC companies have the best Google ratings, listed by rating and then review count. We are not paid to list anyone. SMUD pays rebates only through contractors in its Contractor Network, so ask each whether they are a member.
See all Sacramento installers →
How to claim the SMUD rebate
- Confirm that SMUD is your electric utility.
- Choose a contractor in the SMUD Contractor Network and get at least three bids.
- Ask for a variable-stage and a two-stage quote, and for the gas-to-electric or electric-upgrade category in writing.
- The contractor installs the system and provides the SMUD rebate application for your signature.
- The contractor submits the rebate. Some give you the discount up front and collect it from SMUD afterward.
- If the job includes panel or circuit work from a gas conversion, ask about the Go Electric rebate of up to $4,000.
Common questions
How much is the SMUD heat pump rebate?
$3,000 for a variable-stage heat pump and $2,000 for a two-stage unit replacing gas, or $1,000 for upgrading from an electric system.
Do I need a SMUD contractor?
Yes. The system must be installed by a participating contractor in the SMUD Contractor Network, who submits the rebate for you.
What does a heat pump cost in Sacramento?
SMUD's data shows a median of $18,804 for gas to electric and $17,336 for an electric upgrade, before rebates, with wide ranges.
Is there money for a panel upgrade?
SMUD's Go Electric rebates pay up to $4,000 for a smart panel, subpanel or new circuit, with a gas-to-electric conversion required for the subpanel and circuit.
Is the federal tax credit still available?
No. It ended for systems installed after December 31, 2025.
What to do next
See SMUD's heating and cooling rebates page, or compare all Sacramento offers on our Sacramento hub. For hot water, read Sacramento water heater rebates.
By Sam Menard. Sources, last read October 2, 2026: SMUD heating and cooling rebates, SMUD Home Performance Program, SMUD rebates for my home, The Switch Is On California. All Sacramento rebates → Every SMUD rebate →