Upgrading your home’s heating and cooling system is one of the smartest investments you can make — and thanks to SMUD rebates and federal HVAC tax credits, homeowners in Sacramento can significantly lower the cost of installing high-efficiency equipment. Whether you’re considering a heat pump, ductless mini-split, central AC replacement, or a full electrification upgrade, understanding these incentives can help you save thousands.

This guide breaks down everything Sacramento homeowners need to know before purchasing new HVAC equipment.

What Are SMUD Rebates?

SMUD offers financial incentives to help homeowners adopt more energy-efficient and electric HVAC systems. These rebates are designed to:

• Reduce upfront costs
• Encourage energy savings
• Support home electrification
• Lower long-term utility bills

SMUD rebates change from time to time, but they typically cover high-efficiency heat pumps, ductless mini-splits, and certain home weatherization upgrades.

Why Sacramento Homeowners Are Switching to Heat Pumps

Heat pumps are one of the most heavily incentivized systems in Sacramento because they:

• Provide both heating and cooling in a single unit
• Reduce overall energy use
• Operate cleaner and more efficiently than gas systems
• Align with California’s electrification goals

If you’re considering a heat pump upgrade, Clarke & Rush can help you identify eligible systems and walk you through the rebate process.

SMUD Rebates You May Qualify For

While specific amounts vary depending on the system and program year, these are the most commonly available incentives:

High-Efficiency Heat Pump HVAC Systems

SMUD often provides rebates for:

• Full heat pump system replacements
• Heat pump conversions (replacing gas furnaces and AC units)
• High-efficiency variable-speed heat pump equipment

These rebates can significantly cut the cost of upgrading your home to a modern, high-performance system.

Ductless Mini-Split Heat Pumps

If your home has:

• A room that’s always too hot or cold
• An addition or garage you’re converting
• Older ductwork or no ductwork at all

…SMUD may offer incentives for installing ductless systems that deliver efficient, zoned comfort.

Home Energy Efficiency Improvements

Rebates may also cover supporting upgrades such as:

• Electrical panel upgrades
• Insulation and air sealing
• Smart thermostats
• Whole-home electrification projects

These enhancements help improve comfort and maximize the performance of your new HVAC system.

Federal HVAC Tax Credits (What You Need to Know)

In addition to SMUD rebates, Sacramento homeowners can take advantage of federal tax credits under the Energy Efficient Home Improvement Credit. These credits can help reduce the cost of:

• Heat pump installations
• Heat pump water heaters
• Air conditioners (if meeting efficiency criteria)
• Certain home energy improvements

These credits typically cover up to 30% of qualifying project costs, up to certain annual limits.

Can You Combine SMUD Rebates and Federal Tax Credits?

In most cases—yes.
Sacramento homeowners can often stack:

• SMUD rebate (instant savings)
• Federal tax credit (savings at tax time)

This combination can lead to thousands of dollars in total incentives for homeowners who choose high-efficiency HVAC upgrades.

How Much Can You Save?

Savings depend on:

• The type of equipment installed
• Home size and layout
• Whether ductwork or electrical work is needed
• Whether you’re replacing a gas system

But homeowners typically see significant upfront cost reductions when SMUD rebates and federal credits are applied together.

How to Qualify for Rebates & Credits

Eligibility varies by program, but most rebates require:

• A qualifying high-efficiency heat pump or ductless unit
• Installation by a licensed HVAC contractor
• Equipment that meets minimum energy performance ratings
• Proper permitting and documentation

Clarke & Rush handles this process from start to finish so you don’t have to navigate it alone.

Why Work With Clarke & Rush for Rebate-Eligible HVAC Upgrades

Clarke & Rush has decades of experience serving Sacramento homeowners and is familiar with all local incentive programs. When you work with us, we:

• Recommend HVAC equipment that qualifies for SMUD rebates
• Ensure installations meet program requirements
• Provide all documentation needed for federal tax credits
• Offer guidance on timing and available incentives
• Handle any electrical upgrades needed for heat pump systems

We make the rebate process simple so you get the maximum savings available.

Is Now a Good Time to Upgrade?

For most Sacramento homeowners — yes.
Rebates and tax credits are historically strong, and energy prices continue to rise. Upgrading to a modern heat pump or ductless system provides:

• Lower utility bills
• Cleaner, safer home heating
• Better indoor comfort
• Long-term home value
• Access to significant incentives

If your HVAC system is older, inefficient, or due for replacement, now is an ideal time to explore your options.

Schedule a Free Estimate With Clarke & Rush

Whether you’re considering a heat pump, ductless AC, or a full heating/cooling replacement, Clarke & Rush can help you understand rebate eligibility, potential tax credit savings, the right HVAC system for your home, installation timelines and requirements

Contact Clarke & Rush today to get started and take advantage of the latest SMUD rebates and HVAC incentives while they’re available.