San Jose HVAC: Heat Pump Rebates, Permits, License Checks

By degree days, San Jose needs about 3.5 times as much heating as cooling. NOAA's 1991-2020 normals for the city's station show about 2,180 heating degree days a year, 620 cooling degree days and three freezing nights. San José Clean Energy pays $1,500 when a heat pump replaces a gas furnace. State heat pump rebates are fully reserved. Plan on a City permit and a HERS test.

Is a heat pump a good fit for San Jose's climate?

The climate numbers point that way. A degree day counts how far a day's mean temperature sits below or above 65°F, so the yearly total tracks how hard heating or cooling equipment works. NOAA's annual normals for station USW00023293 give San Jose 2,184 heating degree days and 624 cooling degree days. Winter is the bigger job here, but it is a mild one.

The monthly normals for the same station show where the load falls. December and January each add about 440 heating degree days. July, August and September carry most of the cooling, and August peaks at about 157 cooling degree days. From December through February there are no cooling degree days at all.

Here is what those numbers mean when you replace equipment:

• Freezing nights are rare. NOAA's normals show about three nights a year at 32°F or colder. The Department of Energy says that in moderate climates, heat pumps "can be an energy-efficient alternative to furnaces and air conditioners."
• One system can do both jobs. A heat pump heats in winter and cools in summer. The SJCE rebate does not require an existing air conditioner, so a house with only a furnace can gain cooling in the same swap.
• Size it from your house, not the old unit. Ask for a room-by-room load calculation (ACCA Manual J). Our guide to comparing HVAC quotes shows what a written bid should list.
• Dual fuel does not earn the SJCE rebate. A heat pump with a gas furnace as backup is excluded. Our dual fuel heat pump guide explains how those systems work if you still want one.

How much is the San José Clean Energy heat pump rebate?

San José Clean Energy (SJCE) is the default electricity generation provider for San Jose homes. Its FAQ says PG&E still delivers the power, sends one monthly bill and supplies natural gas. SJCE generation shows up as its own line item on that PG&E bill. Customers can opt out, and the rebate below is only for current SJCE customers.

The EcoHome Rebate page lists $1,500 for a heat pump HVAC system that replaces gas heat. Homes in SJCE's mapped Environmental Justice areas that meet its income rules get $2,500. Outside those areas, the page says you may still qualify for the higher amount if you are enrolled in CARE, FERA, SJ CARES or another income-based assistance program.

An attic insulation add-on on the same page pays $0.75 per square foot, capped at $700, or $1,000 at the higher tier. It is paid only alongside a heat pump rebate.

The rules, as SJCE states them:

• The primary PG&E account holder must apply. Secondary or authorized users cannot.
• The heat pump must replace an existing gas furnace. Ducted central systems and ductless mini-splits both qualify.
• Cooling efficiency must be SEER 17 or higher, or SEER2 16 or higher.
• The equipment must be new. The old gas appliance comes out and the gas line is capped.
• Apply and get funds reserved before any work starts. Approved funds expire 120 days after the approval email.
• Proof of a permit goes in with the rebate claim. Self-installed systems qualify.
• Each home gets one rebate per appliance type.

SJCE also runs an EcoHome Payment Plan: interest-free, no money down, up to $5,000 for up to five years, repaid on your electric bill. The page gives no closing date or remaining budget for HVAC rebates. It does warn that funds are not guaranteed outside your 120-day reservation.

Are PG&E, state or federal HVAC rebates open in San Jose?

Mostly not, as of November 8, 2026. Here is each program's status in its own words.

• PG&E rebates. PG&E's rebates page lists a $300 rebate for a portable backup power system and offers for electric vehicles.
• PG&E Energy Savings Assistance. This income-qualified program does upgrades at no cost to you. PG&E's program page says furnace repair or replacement "may be available to eligible homeowners if PG&E determines that existing natural gas units are inoperable or unsafe." The home must be at least five years old. The program line is 1-800-933-9555.
• State heat pump rebates (HEEHRA). TECH Clean California says HEEHRA single-family rebates have been fully reserved statewide since February 24, 2026. Northern California requests that were not approved sit on a waitlist. A waitlisted project counts only if the heat pump goes in after the reservation is approved.
• Federal Home Energy Rebates. The Department of Energy says these rebates are available "in select states" and points you to your state energy office. In California that is the Energy Commission, which says HEEHRA Phase I rebates were fully reserved as of August 31, 2026. It adds that Phase II availability "will be announced at a later date."
• California Energy-Smart Homes. BayREN's incentive finder says this statewide program's 2026 incentive and bonus funding is fully subscribed.
• Federal tax credit. The IRS page on the home improvement credit covers improvements made through December 31, 2025. A system installed in 2026 is outside that window.

If a quote knocks a rebate off the price, ask the contractor to name the program and show you the approval. With SJCE, that approval has to arrive before anyone touches the old furnace.

Do you need a permit to replace a furnace, AC or heat pump in San Jose?

Plan on one. The City's SJPermits help center describes a "Sub Trade Permit" as one for plumbing, electrical and mechanical fixtures, and names a furnace replacement as one example. SJCE requires proof of a permit with a heat pump rebate claim. It also says a HERS test is a required step to pass final inspection.

Before an AC-only swap, ask the City's permit call center at 408-535-3555 which permit applies.

The steps below come from the City's help center articles:

1. Confirm the City handles your address. Not every home near San Jose sits inside City limits. The jurisdiction article says to look up the property and read its "Other Jurisdiction" code. It notes that "Unincorporated areas are under jurisdiction of the County."
2. Start the application on SJPermits.org. The City says all building permits must be started there. Its FAQ adds that only property owners and qualified contractors may apply for self-serve permits, and a contractor may only pull permits that match its license classes.
3. Pay the fees online. The fee article says permit fees can be paid at SJPermits.org. The self-administered permits article says that once fees are paid and the permit reads "Under Inspection," you can begin work.
4. Book the inspection. Schedule it online with your permit card when the work is complete or nearly so. The inspection article says to cancel by 2:00 p.m. two business days ahead, or you are charged for the inspection time.
5. Get the HERS test done. SJCE's page ties it to passing final inspection.

The HERS step comes from state energy rules. The Energy Commission's HERS page says "properly permitted work will trigger any necessary HERS testing." You can hire a rater who is independent of your contractor. You can also ask the rater or installer for the completed HERS forms. Since January 1, 2026, those field test rules live in the Energy Code, Title 24, Part 6.

How do you check a San Jose HVAC contractor's license?

Run the company through the Contractors State License Board's Check a License page. You can search by license number, business name or a person's name. CSLB notes that a California contractor license number contains no letters. The same page checks Home Improvement Salesperson registrations, so you can look up the person who sold you the job.

For heating and cooling work, look for C-20 on the record. CSLB's classification list names it Warm-Air Heating, Ventilating and Air-Conditioning Contractor. San Jose's permit portal gives you another reason to check. Its FAQ says contractors may only apply for permits that align with their license class, and that a B-class license covers the full range of online permits.

A company's own website rarely makes these checks easy. The table below sets our audit of HVAC company websites in the San Jose area beside the figures for every city we have measured. It counts the sites that leave their Google rating off the page and the ones with no contact form, and it shows how long the main content takes to load on a phone.

Turn those gaps into a short routine:

• Search the company on Google Maps yourself and read the newest reviews, the critical ones too. Many sites in the table do not show a rating at all.
• No form on the site? Phone the office. Ask for the CSLB license number on that call and look it up before anyone visits.
• Ask who pulls the City permit and whether the price covers the HERS test.
• If you want the SJCE rebate, check that the quoted system meets SEER2 16 and that no work starts before your reservation is approved.
• SJCE's heat pump page also suggests getting at least three quotes and checking each contractor's complaint history.

What should you do if you smell gas in San Jose?

PG&E supplies natural gas in San Jose, so its leak rules apply. Its gas safety page says to leave the area now, alert everyone nearby and move upwind. Once you are a safe distance away, call 911, then PG&E at 1-800-743-5000.

Until you are clear, do not use anything that could make a spark: cell phones, flashlights, light switches, matches or vehicles. Never look for a leak with a flame. Natural gas has a sulfur, rotten egg odor, but PG&E warns not to rely on your nose alone. A hissing, whistling or roaring sound near a gas line is another sign.

A furnace can also leak carbon monoxide, a separate danger the CPSC calls colorless and odorless. Our furnace carbon monoxide guide covers the symptoms and what to do next.

Questions people ask