Bay Area delays gas water heater rule to 2028

Bay Area property owners will face the new water-heater standard beginning in January 2028, one year later than first scheduled. It applies when most owners replace gas equipment, generally steering them toward electric heat-pump units. A heater that still works can stay. The air district estimates that as many as 120,000 households replace one annually.

Several groups may still choose gas. Eligibility includes households earning no more than 80% of the local median, people participating in Medi-Cal or CalFresh, and owners whose mortgage and property-tax costs reach at least 28% of gross income. A one-time exception also covers homes where limited room, ceiling height, or electrical capacity prevents installation. Units holding 30 gallons or less remain allowed because a qualifying alternative is unavailable in the U.S.

The district calculates the extra installation expense of a heat-pump heater at about $3,500. Although these models consume substantially less energy, California electricity prices reduce the potential bill savings. Officials estimate the revised policy will cost affected households $372.8 million each year after $60.8 million in energy savings. Regulators say the measure could avert as many as 16 early deaths and 21 asthma cases per year, though the broader exemptions may erase roughly half of the pollution reductions initially expected.