Most Washington electric utilities pay a rebate for a qualifying heat pump water heater (HPWH). The amounts and rules differ, and they change. Every amount below was read on the utility’s own page on October 24, 2026. Treat them as indicative, and check the page again before you buy.
How a heat pump water heater works
ENERGY STAR says HPWHs “use electricity to move heat from one place to another instead of generating heat directly”, like a refrigerator in reverse. They pull warmth from the surrounding air into the tank. Most also have electric resistance elements for high demand. ENERGY STAR describes the usual modes:
- Efficiency or Economy: heat pump only, the most efficient.
- Auto or Hybrid: the default. It adds resistance heat automatically when demand is high.
- Electric: resistance only, the least efficient.
- Vacation: on some models, a low-power mode while you’re away.
Hot Water Solutions NW, the Northwest Energy Efficiency Alliance’s (NEEA) program, cites savings of up to 70% compared with standard electric models.
Will it fit your home?
ENERGY STAR’s installer guide sets out the main checks:
- Space and air. Most 240-volt models need at least 700 cubic feet of air (a 10 × 10 ft room with a 7 ft ceiling), some as little as 450. In a closet of at least 84 cubic feet, a fully louvered door will do. Some 120-volt models designed to replace gas units need more than 700 cubic feet. Keep at least a foot of clearance around the unit.
- Temperature. HPWHs “typically perform best in spaces that do not regularly get colder than 38F”. A basement or garage can work if it usually stays above freezing. The unit cools the room it’s in, so if you duct the exhaust, point it away from thermostats and living areas.
- Condensate. The unit makes clean condensate water that must go to a drain or a condensate pump, and it has to sit level so the line drains. Tacoma Power’s installation specifications add that below-freezing temperatures may affect condensate drainage, and require R-3 insulation on the first few feet of pipe in unconditioned spaces.
- Noise. ENERGY STAR says most new models run at 45 to 60 decibels. It suggests low-cost measures such as a rigid foam pad if the unit is near a bedroom or office.
- Sizing. Sizing is comparable to a standard electric tank. When converting from gas, ENERGY STAR says to size up for the slower recovery.
120 V or 240 V. ENERGY STAR says a 240-volt unit typically uses a 30-amp breaker and 10-gauge wire, like a standard electric tank. Plug-in 120-volt units are designed for replacing gas heaters without new wiring. They typically need to go up two sizes (a 40-gallon gas tank becomes a 65-gallon HPWH), and some need a dedicated outlet while others can share a circuit. NEEA’s 2022 lab test of two early 120-volt models found neither had resistance backup elements. Ask how the installer sized your unit to make up for that.
The Washington code items that apply to any water heater, such as the permit, seismic straps and expansion tank, are in our water heater quotes guide.
Utility rebates (as read October 24, 2026)
| Utility | Amount | Key conditions |
|---|---|---|
| Puget Sound Energy | $1,000; $1,100 with income-qualified Efficiency Boost | Tier 3 or 4 on PSE’s qualified list; installed on or after January 1, 2026; must use PSE electricity; apply within 30 days of installation; one per single-family home; instant coupon at participating Lowe’s or Home Depot, or through your installer |
| Seattle City Light | $750 | Tier 3 or 4 on the qualified list; instant discount through a contractor, store coupon, or online rebate form within 93 days of purchase; one rebate per customer on the form; a unit bought with the coupon can’t also get the form rebate |
| Snohomish County PUD | Up to $1,000, no more than the purchase price | Model from the PUD’s qualified list; must replace an existing water heater (not new construction); apply within 90 days of the invoice; one per account every five years; can’t be combined with other utility rebates without the PUD’s written approval |
| Tacoma Power | $500; or a 5-year 0% loan up to $5,000; income-qualified: $2,500 rebate plus a deferred loan up to $2,500 | Must replace a standard electric water heater; Tier 3 or 4 on BPA’s qualified list; permits required; loans need pre-approval and a Tacoma Power participating contractor; income-qualified offer excludes do-it-yourself installs |
| Clark Public Utilities | $1,500 | Tier 3 or 4; must replace an electric resistance water heater; existing homes only, except split systems; reduced to a top-up if you got a markdown at a participating Oregon Lowe’s or Home Depot (a $1,000 markdown plus $500 rebate for purchases after April 30, 2026); form Rev. 04/26 |
Other utilities. Avista’s June 2025 Washington single-family rebate form does not list a heat pump water heater rebate. Many PUDs and co-ops run their own programs. Hot Water Solutions NW has a utility lookup, but confirm the amount on your utility’s own site.
What “Tier 3 or 4” means. The utilities above require a model on a qualified products list. Ask the bidder for the exact model number and check it against the list linked from your utility’s page before you sign.
State and federal programs
- Federal tax credit (25C): ended. The IRS says the Energy Efficient Home Improvement Credit applies to property “placed in service on or after Jan. 1, 2023, and before December 31, 2025”. It was 30% of costs, up to $2,000 a year for heat pump water heaters. Consumers’ Checkbook reported that a law signed July 4, 2025 ended the credit early, and that projects completed and paid for in 2025 can still be claimed on 2025 returns. ENERGY STAR’s February 2024 cost article still mentions the credit; it is out of date on this point.
- Washington HEAR. Commerce’s Home Electrification and Appliance Rebates program gives money to local administrators, who offer rebates to households at or below 150% of area median income, plus small businesses and licensed adult family homes. Heat pump water heaters are eligible. Commerce lists no fixed amount and says availability depends on your local administrator. Programs open and close: Snohomish PUD’s first round closed in 2025, and its page says the PUD “was not awarded any funds this round”. Check Commerce’s administrator list for your area.
- Federal Home Energy Rebates (IRA HOMES and HEAR). Commerce’s page, dated July 2, 2024, says Washington applied for over $165 million and lists heat pump water heaters as eligible. We found no Commerce page saying these federal rebates have launched in Washington.
What it costs (indicative only)
ENERGY STAR (February 2, 2024, national) gives $1,500 to $3,000 for the unit and $1,000 to $3,000 more for labor and materials, before incentives. A switch from gas can add electrical work at the panel. Get at least three bids; Tacoma Power’s page says prices vary widely.
Before you buy
- Find your electric utility’s page and read the current terms.
- Check that the model is on the utility’s qualified list.
- Ask whether your installer applies an instant discount, and whether it is already deducted on the quote.
- Pull the permit (or confirm the installer has). Tacoma requires one.
- Keep the invoice and apply before the deadline: 30, 90 or 93 days, depending on the utility.
Find installers in our water heater directory or under heat pump water heaters.