Commercial Heat Pump Water Heater Rebate

Get a rebate when you switch to a heat pump water heater

Heat pump water heaters (also called electric hybrid water heaters) that earn the ENERGY STAR® are up to 4 times more efficient and uses 70% less energy than conventional electric water heaters. The investment in a super-efficient heat pump water heater , can quickly pay for itself with the savings on your energy bill.

Additional benefits of heat pump water heaters:

  • ENERGY STAR® Heat pump water heaters dehumidify the space they’re installed in, reducing the need to run a dehumidifier.
  • You have more control over your water heater with temperature control and flexibility. This can include the ability to set your water heater to vacation mode to save energy, to track and monitor energy usage.
  • Electric hybrid water heaters typically come with 10-year warranties, and have an average life span of 13 years.


What you get

The total value of your rebate is based on Northwest Energy Efficiency Alliance’s (NEEA) rated efficiency tiers for heat pump water heaters. Receive a rebate of up to $650 on eligible ENERGY STAR® heat pump water heaters. See the table below.


Tier 3 – Heat Pump Water Heaters


Tier 4 – Heat Pump Water Heaters


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How you qualify

Customer requirements

  • You must be a current PSE commercial and/or industrial electric customer.
  • PSE gas-only customers are not eligible for the rebate.
  • Residential, multi-family, and new construction customers are not eligible for the rebate.

Equipment requirements

  • You must purchase a model found on PSE’s certified qualified products list consisting of ENERGY STAR® certified products. The heat pump water heater must meet Tier 3 or greater specifications, and must be equipped with a CTA-2045 compliant communications port (EcoPort) to meet Washington State Plumbing Code 501.1.2.
  • Rebates only available on new, qualifying equipment.
  • Your heat pump water heater must run on electricity.
  • You must be replacing an existing electric resistance water heater.

Rebate requirements

  • Your rebate application must be submitted within 60 days of installation.
  • Heat pump water heater must be installed within an unconditioned space, such as a garage or unfinished (unconditioned) basement or storage room, or have the exhaust ducted to the outside.
  • Split-systems must meet the following requirements:
    • Outdoor unit must be installed outside the building.
    • All water or refrigerant lines connecting the tank and outdoor units must be insulated with minimum R-4.
    • If DHW pipes outdoors are freeze protected with heat cable, the cable shall be installed per manufacturer’s instructions and be thermostatically controlled.
    • The system must be plumbed with a thermal mixing valve equipped with internal check valves on the hot and cold water lines connecting to it.
  • Rebate is available for purchases made from installation contractor, distributors, retail stores, and online merchants.
  • You must submit a completed W-9 Taxpayer Identification Form for your business.
  • Must submit a copy of your purchase receipt. Receipt must include brand and model number(s) of all rebated equipment and amount paid.
  • Rebate cannot exceed the pre-tax, pre-installation purchase price of equipment.
  • Installation must comply with all federal, state and local code requirements.
  • Each heat pump water heater unit is only eligible for one PSE rebate
  • Heat pump water heater units must be purchased after January 1st, 2024. Units purchased prior to January 1st, 2024 are eligible for the rebate only if the installation contractor provides the distributor invoice directly to PSE to verify that they did not already receive a rebate, or provides the distributor information for where the unit was purchased for PSE to follow up on internally.
  • Products that are replaced under warranty will not be eligible for second rebate.

For help understanding this rebate, its requirements or to verify your qualifications, call an Energy Advisor at 1-800-562-1482, Monday through Friday from 8 a.m. to 5 p.m.

How you apply

Eligible customers can receive a mail-in rebate directly from PSE by completing the following steps:

  • Fill out the application
  • Provide a copy of your purchase receipt
  • Provide completed W-9

Submit all the above to or mail completed rebate form to Puget Sound Energy/Commercial Rebates, P.O. Box 97034 BOT-02O, Bellevue, WA 98009-9734.

Additional information

Is a heat pump water heater right for you?

It's generally easier to move something than to make something. Putting that principle to use, heat pump water heaters use electricity to move heat from one place to another instead of generating heat directly.

Heat pump water heaters heat your water by transferring heat from the air into the water tank, rather than generating heat like conventional electric water heaters. The hot water is then ready to use, and the cool air is pushed out.

In most cases, a heat pump water heater can be installed right where your current water heater sits. There are a few simple installation considerations to help you choose the right heat pump water heater for your space.

  • Location: Because the heat pump water heater exhausts cool air in the area where it is located, the water heater must be installed in a location that would isolate cool air or in a location that is ducted to the outside. Locating your water heater in an unconditioned basement or garage is a great option if the space normally remains above freezing.
  • Temperature: For most efficient operations, the air temperature where the water heater is installed should average 40 degrees Fahrenheit or above.
  • Air circulation: Access to air is important for your heat pump water heater to run at peak performance. Most models need about 750 to 1000 cubic feet of air, which is about the size of a 10 ft. x 10 ft. room. If your water heater is tucked away in a tight space a louvered door or duct will do the trick.
  • Installation: While we do not require installation by a professional installer, we strongly recommend using a qualified contractor for your heat pump water heater install. They can help you determine the proper setup based on manufacturer specifications. When you’re ready to start your heat pump water heater project, we can help connect you to contractors in your area.
Ask an Energy Advisor

For personalized advice, contact an Energy Advisor.

Or call 1-800-562-1482.

Business Energy Resources

Looking for deeper energy savings?

Check out our Business Energy Advisor tool with tips for your business type.

Looking for commercial units larger than 119 gallons?

Check out our Custom Retrofit Grants program that offers incentives for energy-efficient upgrades that are not covered by our suite of commercial energy-efficiency programs.