As South Coast AQMD is developing residential incentive programs to reduce air pollution in the region from natural gas fueled home appliances such as space and water heating, the state and federal government are also developing and implementing programs to cut pollution from energy use in buildings large and small. South Coast AQMD programs are being developed to supplement federal and state incentives to assist our communities make the transition to zero-emission, clean air technologies.
New electric induction stoves and heat pumps for space and water heating, along with rooftop solar panels and design features in new and retrofitted buildings and residences can reduce both smog-forming emissions and indoor air pollution for residents.
Nitrogen oxides, carbon monoxide, and particles from gas equipment in buildings and homes, particularly from space and water heating, are air pollutants of concern to South Coast AQMD. South Coast AQMD is also developing potential measures to speed a transition to pollution-free, electric appliances. Each year, space heaters and water heaters emit 4,950 tons of nitrogen oxide in residential buildings in the region alone. Recent studies show that gas equipment, particularly stoves, contribute to indoor air pollution.
To keep track of South Coast AQMD’s development process for new rules and incentive programs to cut air pollution from homes and buildings, visit our Residential and Commercial Building Appliances webpage. To sign up for updates, visit the “Incentives Programs” section on our Sign Up webpage.
Below are examples of incentive programs for reducing pollution from building energy use. Except where noted, the incentives are federal programs created through the Inflation Reduction Act. Importantly, for the first-time local governments and non-profits qualify for the same investment tax credits and energy production tax credits as taxpaying businesses and residents through the U.S. Treasury Department’s new Direct Payment program. In addition, many of the incentives can be stacked with rebates for energy efficient equipment.
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Incentives for Retrofits & New Construction Projects
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Building Type
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Incentive Program
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Available Incentives
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Owner-Occupied Homes
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New or Retrofit Investment Tax Credit
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-Up to 30% of the cost of rooftop solar
-Up to $2,000 a year for heat pumps or heat pump hot water heaters
-Up to $1,200 a year for insulation, sealing, and Energy Star windows and doors
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Retrofit Rebates (Administered by CEC)
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For low- and moderate- income households up to $14,000 in lifetime rebates for electric panel upgrades and an electric stove or insulation
For low- and moderate-income households a statewide total of $292 million for whole house energy efficiency retrofits (Details not yet available)
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Southern California Edison
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Up to a $900 discount on heat pump water heaters and $75 rebate for a smart thermostat, plus energy efficient appliances for income-qualified households
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Affordable Rental Housing
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New Project Energy Efficient Home Tax Credit
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For projects three stories or less designed to meet EPA Energy Star standards up to $2,500 per unit or projects designed to meet DOE Energy Ready Home standards up to $5,000 per unit
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HUD-Assisted Housing
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Special Retrofit Program
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Up to $40,000 per unit and $750,000 per building for specific clean energy retrofits and up to $80,000 per unit and $20 million per building for comprehensive retrofits
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Commercial Properties
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Tax Credits for New Projects
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For clean energy buildings four stories or more, $2.50 per square when built by workers making less than prevailing wage and $5.00 per square foot when workers are paid prevailing wage
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Local Government Buildings
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Investment Tax Credit & Production Tax Credit Direct Payments
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-Up to 30% of cost of solar system plus possible add-on bonuses under the Direct Payment Program
-Energy PTC under Direct Payment Program of up to $34/MWh for 10 years
-Direct Payment of 30% of the cost of electric vehicle chargers or hydrogen fuel pumps
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