Heat Pump Water Heaters

When you install new water heaters for your building, consider new heat pump water heaters. Heat pump water heaters can save your residents money and are friendlier to the environment.

A heat pump extracts heat from the air and transfers it to water in an enclosed tank. In cold temperatures, it uses a heating element. In warmer Texas climates, the heating element is not often needed.  

Heat pump water heaters are more efficient because they use electricity to move the heat instead of creating heat directly. This method delivers nearly twice the heat of a conventional electric water heater. During periods of high demand, heat pump water heater switch to standard electric heat, providing sustained heat.

You may qualify for an $800 rebate per heat pump water heater you install for your business. The rebate applies to both retrofits for existing building and new construction. 

PACE Financing Available

Austin Energy provides various opportunities for our customers to purchase energy efficient technologies. Many of these reduce energy consumption and enhance comfort and indoor air quality for your customers. PACE is an effective financing approach. Travis and Williamson County PACE programs enable owners of non-profit, commercial, and industrial properties to obtain low-cost, long-term financing for water and energy efficiency improvements and solar generation retrofits.  

Private sector lenders finance qualified improvements and property owners voluntarily agree to contractual assessments imposed on the property. PACE improvements generate positive cash flow with no out-of-pocket cost to the property owner. If the property is sold before the full amount is repaid, the repayment obligation automatically transfers to the next owner. PACE assessments complement Austin Energy incentive programs. 

• Learn more about the Texas PACE Authority
• Browse Texas PACE Authority case studies and other resources

Austin Energy offers an $800 rebate on qualifying heat pump water heaters. To find a qualifying heat pump water heater, visit the ENERGY STAR® Find and Compare Products webpage and search for heat pump water heaters that meet the program requirements. 

Prerequisites

• For retrofits and equipment replacement, applicants must submit rebate applications prior to installation. For new construction projects, applications must be submitted before the certificate of occupancy is issued. Rebates will not be provided retroactively to equipment or retrofits that have already been installed.
• Rebates are only available for equipment or retrofits that:
  • operate weekdays between 3:00 p.m. and 6:00 p.m., June through September (educational facilities and houses of worship are exempt from this requirement);
  • use electricity as its primary or secondary fuel type (please refer to Texas Gas Service for rebates on natural gas equipment);
  • provide kW savings by exceeding requirements for energy efficiency listed in City of Austin Energy Code Chapter 25-12-261 or as determined by Austin Energy;
  • are new, energized, and have a minimum one year warranty (backup or redundant systems are not eligible); and
  • are installed in permanent buildings or structures.
• Commercial rebates are available for Austin Energy customers with commercial electric service. Businesses located on properties with residential electric service should refer to Austin Energy residential rebates.
• The building where the equipment will be installed must comply with the Energy Conservation Audit and Disclosure (ECAD) ordinance (unless exempt or located outside of Austin city limits).
• Multifamily properties applying for commercial rebates (for master-metered properties or work undertaken in common spaces) must meet all Multifamily Program and equipment installation requirements. Properties must not be on not be listed with the City of Austin Code Department’s Repeat Offender Program.

Prerequisites

• The heat pump water heater must be installed at a residence that receives electricity from Austin Energy.
• The heat pump water heater must be installed in a home that has had permanent electric service from Austin Energy for more than one year. Rebates are not available for new construction.
• New equipment is not eligible for rebates if the existing equipment received rebates within the last 10 years.
• All existing heat pump water heaters being replaced must be 10 years old or older.
• You must purchase a qualifying ENERGY STAR® hybrid/heat pump water heater.
• You must use electricity to heat your water.
• You must submit your application within 90 days of purchase. Applications submitted after this timeframe will not be approved.
• You must adhere to all applicable permitting requirements.*

Requirements

• The heat pump water heater you purchase must:
  • Be labeled an ENERGY STAR® hybrid electric water heater, also referred to as a heat pump water heater, and have an Energy Factor of 2.0 or better
  • Store a minimum of 40 gallons of water
  • Be installed new (not used)
  • Be installed meeting all applicable codes and adhering to all applicable building permit processes for proper installation
  • Be permanently installed at the structure
  • Have minimum required clearances and free area as determined by
    the manufacturer
  • Carry a minimum six-year warranty on major components supplied
    by manufacturer
• If required, you must agree to a post-installation inspection by Austin Energy.

Permitting Information

*It is the customer's responsibility to meet all permitting and building code requirements for their Authority Having Jurisdiction (AHJ). Use the following resources to help you research permitting requirements for your AHJ:

• City of Austin Permitting Requirement for Property Owners and Occupants (pdf)
• City of Austin Development Services Department Permits
• City of Bee Cave Building Permitting & Inspections
• City of Manor Building Permits
• Lakeway Building & Development Services
• Rollingwood Residential Planning and Development
• Sunset Valley Permits FAQs

If you do not see your AHJ listed or are unsure which AHJ you are located in, please contact your City for assistance. Contact information for cities and villages located in Travis County may be found at the Travis County website. If you live in Williamson County, please contact the Williamson County Courthouse for assistance finding your City’s information at the Williamson County website.

Commercial Rebate Program Requirements

• Austin Energy can help customers evaluate energy efficiency opportunities for their business or organization. Please email us for assistance on calculating potential rebates or other technical guidance.
• Applications must qualify to receive at least $25 in rebates.
• The customer or contractor applying for the rebate must:
  • submit all required application information and equipment documentation (incomplete applications are placed on hold and may be cancelled after 90 days); and
  • agree to schedule pre-installation and post-installation site visits to allow Austin Energy staff to verify existing and installed equipment.
• For customers or properties applying for a rebate to upgrade or retrofit the same equipment that received a historical Austin Energy rebate within the past 10 years, the new rebate will be calculated based on the incremental energy savings. For example, if a customer or property received a historical lighting rebate, any new lighting equipment rebates will be calculated using the incremental energy savings between the existing and new equipment. Exemptions from this requirement due to emergency replacement of failed equipment are evaluated on a case-by-case basis.
• A 30% bonus rebate is available for eligible: 1) locally owned or franchised small-business customers; 2) small 501(c) non-profit organizations; 3) and houses of worship. Eligibility for large campuses or facilities with multiple accounts held by one customer will be determined on a case-by-case basis. Contact us to determine if you qualify.
  • Eligible small businesses must: 1) be locally owned or franchised (headquartered in the Austin metropolitan area — a W-9 may be required to verify); and 2) use Austin Energy Secondary Voltage Rate 1 (<10kW) or Rate 2 (>10kW <300kW).
  • Eligible non-profits must: 1) provide an IRS determination letter or similar IRS documentation verifying their tax-exempt 501(c) status; and 2) use Austin Energy Secondary Voltage Rate 1 (<10kW) or Rate 2 (>10kW <300kW). Government entities, tax exempt real estate trusts and housing co-ops are not eligible for this bonus.
  • All houses of worship are eligible, regardless of rate.
• Rebates will not be paid unless all installed equipment and retrofits comply with manufacturer requirements and all local, state, and federal regulations, including building code and permitting requirements. For requirements on when electrical permits are required, refer to City of Austin Municipal Code chapter 25-12-113, section 80.19(c). For requirements on when permits are required for mechanical work, refer to City of Austin Municipal code chapter 25-12-133, section 104.2. For more information on mechanical, electrical, and building permits contact the City of Austin Department of Development Services.
• Commercial Program rebates are subject to capping based on the total project cost related to the installation of the rebated equipment or retrofits. The applicant is responsible for reporting total job cost and Austin Energy reserves the right to require a signed, itemized invoice or work order for verification.
  • Standard Commercial Program rebates cannot exceed 50% of total job costs.
  • Rebates cannot exceed 80% of total job costs for locally owned small businesses, non-profits, and houses of worship that receive the 30% bonus.
• By default, the rebate payment is directed to the customer listed on the Austin Energy electric account. The rebate may also be directed to one of the below parties if all requirements are met.
  • A parent corporation or organization of the account holder
  • The building owner, verified using county tax records
  • A tenant at the property, whom must provide a letter signed by the account holder authorizing the rebate to be paid to the tenant
  • A participating contractor or any other 3rd party, whom must: 1) register as a City of Austin vendor; 2) register in Austin Energy's rebate processing system; and 3) provide a letter signed by the account holder authorizing the rebate to be paid to that party
• If a participating contractor plans to submit more than one rebate application on behalf of Austin Energy customers, they are required to: 1) register as a City of Austin vendor; and 2) register in Austin Energy's rebate processing system.
• Austin Energy reserves the right to deny or adjust all rebate applications.
• Participating contractors must comply with all program requirements and conduct business in an honest, professional, and ethical manner. All participating contractors must abide by the Austin Energy Code of Conduct and Ethical Requirements (pdf).