BAAQMD has adopted zero-NOx standards for certain new water heaters, and additional amendments are currently under consideration. Requirements and effective dates vary by equipment type and may change. Here's what is known as of October 2026 — and how to compare gas, tankless and heat-pump options without guessing.
What the Rule Covers Today
In March 2023 the Bay Area Air District adopted amendments to Rule 9-6, setting a zero-NOx (nitrogen-oxide) standard for covered water heaters, phased in by equipment size and date of manufacture. For water heaters under 75,000 BTU/hr, the adopted standard applies to units manufactured after January 1, 2027. Larger units have a later date.
- Existing water heaters can stay in service. BAAQMD states that a working unit can remain until it burns out or needs replacement.
- It's triggered by replacement, not a home sale. The rule applies when new equipment is purchased and installed.
- It depends on the equipment. Requirements are based on a unit's BTU rating and date of manufacture. Whether a specific tank or tankless model is affected depends on its rating — we check before quoting.
What Could Change on November 4, 2026
BAAQMD has published proposed amendments to Rule 9-6 for small water heaters (under 75,000 BTU/hr), and the Board of Directors is scheduled to consider them on November 4, 2026. If approved, the changes would provide some exemptions to the zero-NOx standard and extend the compliance date. Draft proposals have included later dates for some smaller tanks and hydronic systems and one-time exemptions in certain situations — final terms aren't settled until the Board acts.
We'll update this page after the Board decision. Until then, treat any summary — including this one — as general information and check BAAQMD's Building Appliances page for the official status.
Comparing Your Options
- Gas tank: the lowest upfront cost and a familiar setup. Which models can be installed depends on the rules in effect for that equipment.
- Gas tankless: compact, with continuous hot water. Needs correct gas line sizing and venting, and regular descaling in hard water.
- Heat pump: a very efficient electric option. Needs enough space and airflow, a condensate drain, and electrical capacity.
A standard 240V heat pump model needs a dedicated 30-amp circuit. Older San Jose homes on a 100-amp panel may need a panel upgrade — or a newer 120V plug-in HPWH that runs off a standard outlet with no panel work. We assess this before you buy, so there are no surprises.
Heat Pump Water Heater Rebates May Be Available
Local, state and utility incentives change frequently, and some programs older articles mention have closed or changed. In Santa Clara County, the main source of heat pump water heater rebates is usually your electric provider:
- San Jose: San José Clean Energy — EcoHome
- Santa Clara: Silicon Valley Power
- Palo Alto: City of Palo Alto Utilities
- Campbell, Cupertino, Los Altos, Los Gatos, Milpitas, Mountain View, Saratoga, Sunnyvale: Silicon Valley Clean Energy — some cities add their own programs
We don't list amounts here because they change during the year — bonus periods, funding limits and income tiers. We'll check current programs with you before installation.
What About Hard Water?
Santa Clara Valley water is hard, and scale builds up in any water heater. Heat pump tanks are generally more forgiving than tankless heat exchangers, but we still recommend scale protection and periodic flushing or descaling to keep efficiency up. We'll recommend the right water treatment for your setup.
