What water heater rebates pay in Philadelphia
The amount below comes from PECO's water heating rebate page, which we re-read on October 5, 2026. It applies across the whole city. PECO also lists $200 for a natural gas tankless and $50 for a gas storage tank water heater, but those are for PECO gas customers, and most Philadelphia households buy gas from PGW instead.
PECO heat pump water heater
Must be ENERGY STAR certified and electric. Apply within 90 days of buying.
Federal tax credit (25C)
The federal credit for heat pump water heaters ended for spending after December 31, 2025.
How it works
A heat pump water heater pulls warmth out of the air around it and moves it into the tank. That takes much less power than heating water with a plain electric element. The $350 PECO rebate is paid after you buy, so you pay the full price first and get the money back once PECO approves your claim.
Who should look at this in Philadelphia
This rebate fits best if your water heater is electric now. Swapping an old electric tank for a heat pump model cuts the power it uses, and every kilowatt-hour you save is on your PECO bill. The Census Bureau's American Community Survey (2020 to 2024) finds that 24.7% of Philadelphia households heat their homes with electricity, and many of those homes also heat water with it.
If your water heater runs on PGW gas, the math is harder. A heat pump model can still make sense when your gas tank is old and you want to move away from gas, but your savings will be smaller. Get a quote for both before you decide.
Basements in old rowhouses
Most Philadelphia homes are old. The same Census survey shows 83.3% were built before 1980 and 39.9% before 1940, and 55.6% are rowhouses or twins. In many of these homes the water heater sits in a basement. That is often a good spot for a heat pump model, with some checks:
- Space: the unit needs room around it to draw air. Small, closed-off closets can be too tight.
- Drain: it makes water (condensate), so it needs a drain or a pump nearby.
- Power: most need a 240-volt circuit, which an electric tank usually already has.
- Cool air: it blows cooler air into the room. In a basement that also helps dry the air in summer.
Is it worth it?
Heat pump water heaters cost more than plain electric tanks up front. The $350 PECO rebate narrows that gap, and the lower power use does the rest over time. We don't publish a payback number for your home, because it depends on how much hot water your family uses and what your installer charges. Ask for a quote that shows the expected yearly energy use from the model's ENERGY STAR listing, then compare it with your current tank.
Plan the swap before the old tank fails
Most people replace a water heater the day it leaks. That rush pushes them into whatever plain tank the plumber has on the truck. A heat pump model can take a few days to order, so if your tank is ten years old or more, get a quote now. You will have time to check the space, line up the drain and pick an ENERGY STAR model that qualifies for the $350.
How to get the PECO water heater rebate
- Confirm the model is ENERGY STAR certified. You can check on ENERGY STAR's product finder.
- Buy and install it. A plumber is the usual choice; ask about the drain and the electrical circuit.
- Keep the receipt and the model number.
- Apply on PECO's rebate page within 90 days of the purchase.
Common questions
How much is the PECO water heater rebate?
$350 for an ENERGY STAR certified heat pump water heater.
Does PECO pay for a regular electric or gas water heater?
No. The rebate is for heat pump water heaters only.
How long do I have to apply?
PECO asks you to apply within 90 days of buying the water heater.
Is there still a federal tax credit for heat pump water heaters?
No. It ended for spending after December 31, 2025.
Can a heat pump water heater go in a small closet?
Sometimes, but many need more air than a closed closet gives. Check the maker's space rules, or ask about a louvered door or a ducted model.
What to do next
See every PECO rebate, check the Philadelphia heat pump rebate if you are also replacing your heating, or add a PECO smart thermostat rebate.
By Sam Menard. Sources, last read October 5, 2026: PECO appliance rebates, ENERGY STAR heat pump water heaters, IRS: Energy Efficient Home Improvement Credit, US Census Bureau, ACS 5-year table B25040, PECO rebate program: water heating. All Philadelphia rebates → Every PECO rebate →