Heating and Cooling SMUD Rebates – Sacramento County Home

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Heating and Cooling SMUD Rebates – Sacramento County Home

SMUD Suspends Rebates

SMUD Rebates for Sacramento County in 2020

Back in September of 2019, SMUD, the electric company here in Sacramento County, announced the start of its new SMUD rebate structure for homeowners getting certain types of new HVAC systems.  They’re doing this as part of their effort to make improvements to their current HVAC program and consolidating it into a larger program called Advanced Home Solutions.  Stay tuned, because you’re about to get some great information about how much you can get back from SMUD rebates on your upcoming HVAC project!


Hi, I’m Greg Fox from Fox Family Heating and Air.  We’re located right here in Sacramento County.  I’m super excited to tell you about SMUD’s new rebate they’re giving to those of you who decide to go one of a couple of different ways with your upcoming HVAC project.

But first, let me fill you in on why SMUD is changing things up.

If you remember the summer of 2019, SMUD began their Time-of-Use rates which really elevated the cost to use our appliances in the 12 to 5 pm and 5 to 8 pm time frame.  Through research, they noticed everyone’s air conditioning systems were the main culprit of electricity usage during that time.

To SMUD, it costs them 2 to 3 times more to provide electricity during those summer peak hours versus non-peak hours.  As the demand and cost to produce power has increased, it’s become way more difficult to provide electricity to the end-user during peak hours.  So, they began their Time-of-Use campaign to deter folks from using electricity during those peak times.

In a discussion we had with SMUD representatives recently, it makes sense.  If people didn’t start using less electricity, SMUD would need to build more infrastructure to meet the demand.  And you and I both know those costs would be passed on to us.  We’re already blessed with some of the lowest rates in California, and I can see SMUD is just trying to keep it as low as possible for us.  They’re a not-for-profit company which helps in that aspect.

So why the new structure?

SMUD’s self-made mandate is to be net carbon neutral by 2040.  That means the way they deliver power to us won’t involve adding to the stock of greenhouse gases that affect our atmosphere, by 2040.  Their current mix is about 50% non-carbon emitting as of 2019.  This goes in line with the bill Governor Brown signed in 2018 which set the goal of phasing out all fossil fuels from California’s electricity sector by 2045.

The old SMUD rebate structure was all about efficiency ratings which used terminology like SEER and EER ratings.  14 SEER, being the lowest system available we could install in California had no rebate available.  For most HVAC companies, if you spent a little more you could get a 16 SEER system which gets you a $500 rebate.

If you upgraded even higher to the 18 SEER air conditioner, you could get a $650 rebate.  The reason they offered a little more for these was because of efficiency.  Most AC systems 17 SEER and higher offered 2-stage technology.  So, it would have like, a medium-high stage around 60 to 70% of its capacity and a 100% stage.  Anyone knows that if we use a speed that is 30% lower than a unit’s full capacity, it will save you money on your electric bill.

An even more efficient system, the 19 and 20 SEER, and even up to 25 SEER variable speed units have capacities that swing from 20 to 100% capacity depending on the demand during that time of day.  Those units also got a $650 dollar SMUD rebate under the old rebate structure.

Looking Forward

This is all in the past!  The new SMUD rebates are much better!

14 and 15 SEER systems (basically any system that is only a single-stage system) no longer have SMUD rebates for them.

Now, any 2-stage system, whether you have an all-electric heat pump or a gas/electric system is going to qualify you for a $1500 rebate.  So, what does this mean?  Let’s say your old system is a single-stage, or for that matter an old 2-stage system.  If you upgrade your new system to ANY 2-stage or variable speed system, you’ll receive the $1500 rebate in the mail 4 to 6 weeks after the job is installed.

One stipulation on the furnace for these 2-stage systems is they have to be installed with a 90% AFUE furnace.  So, in our homes we have two types of furnaces, either 80% or 90% AFUE furnaces.  An 80% furnace results in 20 cents of every dollar you spend floating out of the flue pipe that goes through your roof.  That means more gases escape to the atmosphere and contribute to global warming than, say, a 90% furnace.  Remember the goal of these SMUD rebates for our Sacramento utility company is to help reduce our carbon footprint.  More efficient furnaces will help get us there.

Package units on the roof or the side of the house are included in this as well.  If you replace your current system with a 2-stage package unit (with air conditioning,) you’d receive the $1,500 rebate as well.

A Higher Rebate

Now here’s an even higher rebate.  If you currently have a natural or propane gas-fed furnace, whether it’s an 80% or 90% furnace, with pretty much any air conditioner (and this includes package units, too) and you were to switch over to an all-electric 2-stage or variable speed heat pump, you’d be eligible to receive a $4000 rebate.

This rebate also applies to ductless or mini-split technology.  You may have seen these units that mount on a wall or the ceiling of your house or hotel rooms you’ve stayed in.  They even have these types of mini-splits that are ducted so you don’t have to see the units from your room.  They’re mounted in the attic very similar to unitary systems you’re used to already in your homes.  As long as the ductless system serves the “whole house,” you get the rebate as well.

Whole House?

What does the “whole house” mean?   It means the main living areas.  So, the living rooms, bedrooms, kitchens, dining rooms, dens, lofts, and other rooms like your man caves or ma’am caves (not in the garage.)  So, this list isn’t comprehensive, but you get the idea.  Areas of the home that are commonly lived or slept in.

Rooms that aren’t required are the bathrooms, laundry room, utility room, and other small rooms that people wouldn’t consider to be “their room.”

Any combination of wall mounts, floor mounts, ceiling cassettes, or ducted heads fits this category.  Even if you’re not serving the whole home, but maybe just adding one to supplement the central air system you have now, there’s a $200 rebate for each head you have installed, up to $800.

So, does this count if you currently have no central heating and air?  Maybe you have a couple of window units and a wall furnace that serves the house.  YES!  This is considered a “full cut-in” where we convert your home, so it has central heating or ductless technology like we just talked about.  In that case, it would be a $4000 rebate if you installed any 2-stage or variable speed HEAT PUMP system.

Dual Fuel Systems

The utility company is getting ready to implement another option to the rebate structure which will include dual-fuel systems.  It’s looking like the rebates for those systems with 2-stage or variable speed technology will be around $2500.  Dual fuel systems could be another discussion altogether, but I’ll just say this:  they use gas heat to provide the “emergency” heat your normal heat pump system would use, which uses up a considerable amount of power.  And it’s very common for that feature on your heat pump system to come on during the coldest days of the year.

In most cases, you pay your contractor the price of the job, and then receive your rebate from SMUD in 4 to 6 weeks after the job is installed.  Of course, your contractor IS going to have to pull a permit for this to qualify, so make sure you work with a legitimate HVAC company like Fox Family Heating and Air, right here in Sacramento County.  We pull permits on all of our installs.  Remember, any time you alter the electrical, plumbing, roofing, or structure of the house, a permit should be pulled.

All Electric Heat Pumps

SMUD says HVAC systems are the most expensive items to run in your home.  They’ve seen a 30% to 70% reduction in energy usage in homes with 2-stage or variable speed HVAC systems.

So, why should you consider going to an all-electric heat pump now?  It reduces our community’s carbon footprint, there’s the 30% to 70% reduction in electricity usage, and the near future is heading this direction anyway. By becoming an early adopter of this net carbon neutral campaign, customers can take advantage of these fantastic rebates that are available NOW, that most likely won’t be there when it becomes mandatory in new homes 20 years from now.

There are some costs associated with upgrading your HVAC system from a gas-electric system to an all-electric heat pump.  Most notably, the wiring to your outdoor unit will stay the same, but your wire to the indoor unit will likely need to be upgraded to a little bit bigger wire since it will be providing 240 volts instead of the 120 volts that’s already there.  The amp draw on heat pumps increases significantly in the wintertime, which is specifically related to the heat strips that are used during the coldest months of the year.


I really hope this explains everything you needed to know about the new SMUD rebate structure.  I like the way they’re thinking.  Reducing our carbon footprint is crucial for not only ours but generations to come.  If you have any questions about this or any topic regarding your heating or air conditioning system and you’re here in the Sacramento area feel free to contact us.

Thanks so much for stopping by and we’ll see you next time.

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