# What changed for heat pump and mini split rebates in California?

> What changed for heat pump and mini split incentives in San Diego: 25C ended, HEEHRA's waitlist and HEART closed, new state laws on permits and HOAs.

URL: https://mesaminisplitsandiego.com/blog/rebate-status-changes/

News

Most of the large incentives San Diego homeowners read about have ended or filled, while two new state laws change permits and HOA rules for heat pumps. Here is what happened and what remains.

Over roughly eighteen months, nearly every large incentive for a San Diego heat pump closed. TECH Clean California stopped taking market-rate reservations, the City’s HEART program filled, Congress ended the 25C tax credit after 2025, and the state’s HEEHRA waitlist shut on July 17, 2026. Income-qualified help, utility financing and a rate plan are what is left.

[Mesa Mini Split San Diego](https://mesaminisplitsandiego.com/) designs and installs ductless systems in homes throughout San Diego County, using licensed and insured contractors who hold the California C-20 (HVAC) license. This news post records the sequence of closures in order. For eligibility details on each program, read the [rebates guide](https://mesaminisplitsandiego.com/guide/mini-split-rebates-san-diego/).

## A timeline of the closures

| Date | Change |
| --- | --- |
| January 17, 2025 | Final day for sales and reservations under TECH Clean California’s market-rate single-family heat pump offer, which had run out of funding statewide |
| October 7, 2025 | The City’s Home Energy Assistance Rebates (HEART) program hit capacity and stopped accepting applications |
| December 31, 2025 | Last placed-in-service date for which the IRS allows the 25C home improvement credit on a heat pump |
| January 7, 2026 | HEEHRA’s Southern California single-family budget became fully reserved |
| February 24, 2026 | HEEHRA single-family funds became fully reserved across the state |
| April 20, 2026 | California Energy-Smart Homes declared that year’s whole-building incentive and bonus money fully subscribed |
| July 17, 2026 | HEEHRA’s single-family waitlist closed; TECH Clean California says a further phase will come “at a later date” |

Two smaller points complete the picture. The federal HOMES program, which would pay for measured whole-home savings, has never launched in California; the state sent the U.S. Department of Energy a revised application in August 2026. And neither SDG&E nor the two community power providers, San Diego Community Power and Clean Energy Alliance, list a rebate for heat pump space conditioning.

## What a household can still use

The remaining options sort into three kinds.

**Programs that do the work for you.** Equitable Building Decarbonization is a state-funded direct-install program for income-qualified households (80% of area median income or less) in designated communities around the county; its installers are assigned by the program, and heat pump HVAC is among the possible measures. The San Diego Regional Energy Network’s Home Energy Savings program keeps an interest list for older houses, duplexes and manufactured homes built before 2020, with some upgrades at low or no cost. Neither works as a coupon you hand to a private installer: the administrator checks eligibility and schedules the job.

**Financing.** SDG&E publishes two loan options, GoGreen Financing and On-Bill Financing, each on its own terms.

**A rate plan.** Owning a heat pump for space conditioning qualifies a home for SDG&E’s TOU-ELEC schedule. Whether that saves money depends on when and how much electricity you use; the [operating cost guide](https://mesaminisplitsandiego.com/guide/mini-split-operating-cost-san-diego/) runs the numbers.

## Two new laws aimed at permits and HOAs

The Legislature’s response in September 2026 targeted red tape rather than rebates.

**SB 222** (Chapter 738) sets a $200 ceiling on the permit fee for a home heat pump HVAC system from January 1, 2027, with an exception where a local agency documents a higher reasonable cost. The same law restricts setbacks for this equipment (3 feet maximum at the side and rear, 10 feet at the front), makes asynchronous inspections available from July 1, 2027, and requires instant online permits for like-for-like swapouts by July 1, 2028. Its Civil Code 4737 section reins in HOA restrictions on heat pumps. San Diego’s Development Services Department has not said how it will implement these provisions. Today a City mini split permit starts at $176.57; the [permits guide](https://mesaminisplitsandiego.com/guide/mini-split-permits-san-diego/) will follow the change.

**AB 1684** (Chapter 887) creates Civil Code 4738, in force from January 1, 2027. Associations lose the power to ban or limit a code-compliant cooling system, heat pumps included, inside an owner’s separate interest, to charge for one, or to dictate the contractor or brand. The exceptions are work that would break the law or lacks a required permit, and an HOA can still insist on a licensed contractor and on repair of any damage to common areas. See the [condo installation page](https://mesaminisplitsandiego.com/condo-mini-split-installation/) for how that plays out.

## Planning without a rebate

The practical lesson is to judge a mini split on what it costs to buy and run. The [installation cost guide](https://mesaminisplitsandiego.com/guide/mini-split-installation-cost-san-diego/) lists typical local ranges and the [cost estimator](https://mesaminisplitsandiego.com/tools/mini-split-cost-estimator/) turns them into a planning figure. Households that might qualify for an income-based program should contact its administrator before signing anything, since those programs pick the installer. Incentive programs open and close without much notice, so treat every status above as something to confirm. When you are ready for a written scope, call or request an estimate.

## Questions about this post

### Can I still claim the federal 25C credit for a mini split installed now?

No. The IRS states that the Energy Efficient Home Improvement Credit is not allowed for property placed in service after December 31, 2025. It was worth up to 30% of the cost, capped at $2,000 a year for qualifying heat pumps, while it lasted. Web pages and quotes that still subtract it are out of date.

### Will the HEEHRA heat pump rebate reopen?

TECH Clean California has said a later phase of single-family HEEHRA funding will be announced at a later date, but no date or terms have been published, and the single-family waitlist closed on July 17, 2026. Check TECH Clean California and the California Energy Commission directly before planning around it.

### Does the SB 222 permit fee cap apply to a mini split?

It applies to residential heat pump HVAC systems, which the law defines as one system serving one dwelling unit, so a heat pump mini split at a house is the kind of system it covers. From January 1, 2027, the permit fee is capped at $200 unless the city or county adopts written findings that its reasonable cost is higher. The City of San Diego has not yet published how it will apply the cap.

Want this answered for your house?

Call with the rooms you want cooled and your ZIP code.

## Keep reading

- Cost Guide [Is there an SDG&E rebate for a mini split?](https://mesaminisplitsandiego.com/guide/mini-split-rebates-san-diego/)The full San Diego incentive picture for ductless heat pumps: the federal credit that ended, the state and City programs that closed, the income-qualified programs still open, and the SDG&E rate any heat pump household can choose.
- Cost Guide [How much does mini split installation cost in San Diego?](https://mesaminisplitsandiego.com/guide/mini-split-installation-cost-san-diego/)Typical San Diego-area ranges by number of indoor heads, the published permit fees, the parts of a price that only a site visit can settle, and an honest look at rebates and running costs.
- Learn [Mini split operating cost in San Diego: what does it cost to run?](https://mesaminisplitsandiego.com/guide/mini-split-operating-cost-san-diego/)How to turn a room's cooling or heating load, the hours a head runs and its efficiency rating into kilowatt-hours, then into dollars on SDG&E's published time-of-use rates, and why heating against gas is a closer call than cooling.
- Learn [Do you need a permit to install a mini split in California?](https://mesaminisplitsandiego.com/guide/mini-split-permits-san-diego/)What California's Energy Code requires for a new mini split, how the City of San Diego, the County and other local cities issue the permit, what the inspection and field verification cover, and what SB 222 changes from 2027.