Tankless water heaters boast advantages like lower gas bills and endless hot water, but not without an initial upfront investment that can reach up to the thousands. Depending on where you live, there are rebate and tax credit programs that can put some of the investment money back in your pocket.
Monkey Wrench Plumbing, Heating & Air has installed and serviced tankless water heaters across the Greater Los Angeles area for over 15 years. In that time, we’ve made it a point to keep up on local rebates and credits so our customers can rest easy knowing they’re getting the maximum return on their investment.
This article will walk you through how to file for a local rebate and the available federal tax credit. Following the simple steps listed below will ensure you get some cash back in your pocket after upgrading to a Rheem tankless water heater for the first time.
What Tankless Water Heater Qualifies for a Tax Credit?
Government websites can be tricky to sift through, making finding the right information difficult. This pitfall also applies to finding out which Rheem tankless water heaters qualify for rebates. To get our ducks in a row, let’s take a look at the information provided by the IRS in relation to the residential energy-efficient property credit.
In its documentation, the IRS highlights tankless water heaters as qualifying for a federal tax credit because they fall under “any item of energy-efficient building property.”
In 2022, homeowners could receive $300 in tax credits. Since then, this number has effectively doubled, as outlined in the Energy Efficient Home Improvement Tax Credit, from the Inflation Reduction Act of 2022.
Now, some high-efficiency tankless water heaters qualify for a credit of up to 30% of the cost of the tankless water heater and installation of up to $600. You can see a side-by-side comparison of the changes made this year here.
How Do Tankless Water Heaters Qualify for Rebate Tiers?
The Department of Energy tests efficiency by simulating real-life scenarios and conditions. After testing, each model earns a Uniform Energy Factor (UEF) rating.
Let’s break things down further. A UEF rating of 0.95 or higher and Energy Star certification qualifies a tankless water heater for the top rebate tier of $1,000. Dropping down to the mid-tier, a UEF rating between 0.87 and 0.94 with Energy Star certification nets homeowners $800 in rebates. Tankless water heaters at the lowest rung, with a rating of between 0.82 and 0.86, garner an $80 rebate.
On April 1, 2023, the rebate for tankless water heaters rated between 0.82 and 0.86 UEF dropped to $80 from $600 for units purchased after April 1.
Rheem Tankless Water Heaters Qualifying for Rebate
Each brand of tankless water heater has models that qualify for different rebate tiers based on their efficiency, and Rheem is no different. This means that you’ll likely want to do a bit more research before going with any old Rheem tankless water heater.
At the top tier, you can expect to earn $1,000 back, as stated above. Likewise, this mid and low-tier qualify for $800 and $80, respectively. Some brands only qualify for certain tiers. For instance, Navien, another respected brand, features no models in the lower $80 tier.
Take a look at a few of the models that qualify for rebates based on their efficiency and Energy Star Certification, as outlined in SoCal Gas’s criteria. This list may change over time due to alterations in rebate policies.
$1,000 Rebate Tankless Water Heater Models
- IKONIC Super High-Efficiency Condensing Condesnsing Tankless Water Heater
- IKONIC Super High-Efficiency Condensing Condesnsing Tankless Water Heater with Recirculation Pump
$800 Rebate Tankless Water Heater Models
- Performance Platinum Condensing 90 Direct Vent Indoor Tankless
- Performance Platinum Condensing 90 Outdoor Tankless
- Performance Platinum Condensing 94 Direct Vent Indoor
- Performance Platinum Condensing Tankless 94 Outdoor
- Performance Platinum Condensing 84 Direct Vent Indoor Tankless
- Performance Platinum Condensing 84 GPM Outdoor Tankless
- Professional Prestige Series 95 GPM Indoor Tankless
- Professional Prestige Series 95 GPM Outdoor Tankless
- Professional Prestige Series 90 GPM Indoor Tankless
- Professional Prestige Series 90 GPM Outdoor Tankless
- Professional Prestige Series 84 GPM Indoor Tankless
- Professional Prestige Series 84 GPM Outdoor Tankless
How to Apply for Los Angeles Tankless Water Heater Rebates
Registering your Rheem tankless water heater for a rebate is easy. In a few short steps, you’ll be well on your way to earning up to $1,000 in rebates and up to $600 in federal tax credits. Just follow these steps to ensure your return on investment.
Here is how to register your Rheem tankless water heater for a rebate.
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Upgrade to a high-efficiency Rheem tankless water heater.
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Rebates are only available for those upgrading to a tankless water heater for the first time.
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Purchase your Rheem tankless water heater by December 31, 2024.
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Hold onto your dated receipts and invoices. You may need these at some point in the process.
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Apply for a rebate on the SoCal Gas website here.
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Long Beach residents have to adhere to a different process and apply here.
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Submit your tankless water heater information and tax credit form while filing your taxes to apply for the maximum tax credit.
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This form is expected to be updated closer to the end of the year.
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You’ll receive your rebate in about four to eight weeks. If your rebate is returned due to an issue like incorrect information, then you’ll be waiting an extra four to eight weeks for your check.
If you follow the above steps, you may get up to $1,600 back in rebates and tax credits. Regarding the federal tax credit, you’ll need to wait until tax season to see a return.
Up to Speed on Rheem Tankless Water Heater Rebates
We’ve looked at how to file for a tankless water heater rebate and federal tax credit, as well as which Rheem models qualify for a rebate. With this information, you can rest assured that you’re getting the maximum rebate and tax credit for your Rheem tankless water heater. Thanks to the recent changes to the federal tax credit, there’s seldom been a time as good as now to upgrade to a tankless water heater.
With 15-plus years of tankless water heater experience under our belt, we’ve helped many Los Angeles homeowners save big by helping them file for rebates and credits. If you’re looking to upgrade to a tankless water heater, book a consultation through our convenient online scheduler or use one of the buttons below.
If you’re upgrading to a tankless water heater for the first time and want to learn more before making the leap, read up on some of the most commonly asked questions about tankless water heaters with our Ultimate Guide to Tankless Water Heaters.
For those who would like to learn a bit more about Rheem, read our full brand review to get a sense of how the brand performs overall. You can also compare Rheem to other brands using our full reviews of Navien, Noritz, and Takagi. There’s even a brand comparison for Noritz vs. Rheem.
