Bay Area Considers Exemptions for Water Heaters

Why this is here: Heat-pump water heaters currently cost, on average, $7,000 to install—twice as much as traditional gas appliances—though incentives aim to close a $3,500 price gap.

The San Francisco Bay Area Air Quality Management District is considering exempting some households from its upcoming ban on new gas water heaters. In 2023, the district passed rules limiting emissions from home heating, starting with water heaters in 2027.

Staff now propose exemptions for low-income homeowners and those with limited space or electrical capacity. They estimate roughly 38% of installations might qualify.

Several board members want to delay or roll back the policy, citing affordability concerns amid rising costs for food and energy. Other members emphasize the health impacts of gas appliances, noting that pollution from these contributes to as many as 85 early deaths annually in the region and costs up to $890 million each year.

Heat-pump water heaters average $7,000 to install, double the price of gas models, though incentives can reduce or eliminate this gap. The board will vote on the final rule language this October, and their decision could influence similar regulations in California, Maryland, and eight other states.