Pacific Northwest Midstream HVAC and Water Heating Program

The residential and commercial HPWH rebates have been moved from the current distributor-based program model to a customer rebate-style program model.

Program details:

• New customer rebate style programs launched January 2, 2024
• Both residential and commercial rebates for residentially-sized heat pump water heaters
• Additional program, eligibility, and application details can be found on water heating program websites
  • Residential Rebates
  • Commercial Rebates

Tommy Winslow – Commercial Midstream Program Manager – [email protected]

Will Dixon – Residential HPWH Downstream Program Manager – [email protected]

Kim Stevens – Commercial HPWH Downstream Program Manager –[email protected]

ADU is an accessory dwelling unit, a separate living space within a house or on the same property as an existing house.  

PSE ADU eligibility on the same site address: If the main house and ADU are separately metered, they are eligible for the rebate for PSE. If the ADU is not separately metered, additional heat pump or heat pump water heater systems will be considered on a case-by-case basis and must meet PSE’s ADU minimum requirements: ADUs must be occupied full-time, must be an additional living area independent of the primary dwelling unit with no venting from the primary dwelling, and must include a fully functioning kitchen and full bathroom.  

City of Seattle’s definition of AADUs and DADUs can be found here. ADUs and DADUs can be on the same meter and must be legally permitted to be eligible for a City of Seattle rebate. 

Snohomish PUD defines ADU for residential as an attached garage or basement of a one-story home. To be eligible for a rebate, it must have its own electric heat source, which can be on the same meter as the home, AND be considered a livable dwelling (i.e. kitchen, bathroom facilities, bedroom(s), etc.). Gas heat is NOT eligible.   

The PNW Midstream Program offers you a competitive advantage in the region by encouraging the sale of higher quality, higher efficiency equipment, which increases your profit margin. There are a range of incentives available for a wide variety of HVAC and Water Heating equipment, and the Program team is here to assist you in finding solutions that meet your customers’ needs. 

The PNW Midstream Program offers you a competitive advantage in the region by encouraging the sale of higher quality, higher efficiency equipment, which increases your profit margin. There are a range of incentives available for a wide variety of HVAC and Water Heating equipment, and the Program team is here to assist you in finding solutions that meet your customers’ needs. 

All participating contractors must simply let their distributor know they would like to participate at the time of purchase. Participating distributors will provide contractors qualifying sales information and utilities may occasionally reach out to verify installation locations. Please be prepared with address information at time of purchase. 

Click here for a list of participating distributors.

If your distributor is not currently participating in the program, please encourage them to contact the program implementer, Energy Solutions, at [email protected] or (503) 914-0008 for more information. Program enrollment is a straightforward process and can be beneficial for distributors, contractors, and customers. 

A full list of qualified products can be found on the downloadable QPLs on this page, or by searching the following industry websites:  

• AHRIDirectory.org for eligible heat pumps (you will need to input the program efficiency requirements listed in the program incentive tables)
• The Northwest Energy Efficiency Alliance (NEEA) residential qualified product list for hybrid heat pump water heaters can be found online here: https://neea.org/resources/residential-unitary-hpwh-qualified-products-list

Manufacturer-specific qualified products lists, along with a “top seller” list based on your company’s sales data, can be made available by request. For questions on product eligibility or for support building a custom qualified products list, please contact [email protected].  

No. Contractors are not able to submit an incentive application for products that do not meet the program’s minimum efficiency requirements. 

Customers or contractors purchasing qualifying equipment from participating distributors are eligible for midstream incentives, provided the installation address is a current Puget Sound Energy, Snohomish County PUD, or Seattle City Light customer.  

Please use the supplied territory map and/or zip code search tool available on this page, and if in doubt, reach out to your field representative or the Program implementer. 

All utilities allow one incentive per address for both HVAC and Hybrid Heat Pump Water Heaters. Case-by-case exceptions may be allowed based upon square footage, presence of an Accessory Dwelling Unit or other factors. Please contact the Program implementer [email protected] to confirm eligibility for an exception. There are no limits on residential ECM pumps (City Light territory only). For additional information on customer eligibility and exceptions to quantity limits for residences, please contact the Program implementer. 

Income qualified customers of Puget Sound Energy may qualify for additional incentives: 

• In addition to the midstream incentive, manufactured homes and Efficiency Boost qualified installations within PSE territory may receive an extra rebate for HPWHs. Customers can work with their contractor or can apply directly with PSE to receive this add-on rebate.  
• Contractors performing work on behalf of PSE’s Low-Income Weatherization (LIW) program are not eligible to participate in the midstream program and are informed they must pass the midstream incentive to the agency on their bid. They have signed contracts with weatherization agencies throughout the PSE service territory and are aware they must pass the incentive through for each LIW project.  
• Please go directly to the PSE Website for more information about these programs. 

The equipment must meet or exceed the minimum efficiency requirements for retrofit and new construction designations. All equipment types, project types and efficiency designations are outlined in the incentive tables. Please note there are periodic changes to the Program. Typically, these changes occur at the end of the year and at mid-year. 

With the evolution of the M1 testing standard and changing efficiency ratings of some heat pump systems, the efficiency and invoice date (prior to or after July 1, 2023) must be considered when determining the accurate incentive for projects at bid and submitted stage. Please see the question below, ‘How is the program handling the transition from SEER/HSPF to SEER2/HSPF2 ratings?’ for additional details. Existing heating equipment and fuel information is requested for all heat pump retrofit claims. 

If a new construction project does not have an assigned address, please include the development name and lot numbers, temporary construction meter number, cross-streets, or construction permit number in the application notes. For additional verification assistance, please contact [email protected]. If all required information is not provided, program staff will follow up and this may delay reimbursement timing.  

To receive your incentive, the required installation address, product, and sales information must be submitted to your distributor at the time of purchase. Most participating distributor locations define a process for sales teams to submit the required information to their designated incentive processor. Your distributor will ensure that incentive application forms are available at your branch to assist with this process. Your distributor may have a process for units you purchase for warehouse/unknown customers.  

Time of purchase is optimal and results in quicker incentive processing. However, your distributor may allow addresses to be submitted for warehoused units up to 6 months after purchase if within the same calendar year. Check with your distributor for details. Sales from 2022 must be submitted to your distributor by December 31, 2023, to guarantee payment.  

End-use residential customers are aware of the specific incentive amount and the Program has informed them to expect this incentive from contractors for qualifying equipment. Please refer to the most recent program incentive tables for pass-through values. It is very highly encouraged that you pass-through midstream rebates as an incentive to end-use customers. For Efficiency Boost and manufactured home customers, it is required that the midstream rebate get passed through to the customer. 

However, the spiff is intended for the contractor and does not need to be passed through. All spiff amounts and details can be found on the contractor incentive table available on this site.  

Incentives should be itemized on customer invoices, with separate line items listed for individual incentives. The invoice should clearly state that the incentive was funded by the local utility with the incentive amount and the associated equipment. Please note – Sales of ultra-low temperature freezers have additional invoice requirements.  

Current program incentives are in effect for sales made with invoice dates between January 1, 2024, and December 31, 2024. Changes to incentive levels and equipment eligibility will generally be announced by the Program several months in advance. 

No. Qualification for this program is separate from qualification for Inflation Reduction Act incentives for heat pumps. We recommend your customers work with a tax professional for their specific situation. However, this FAQ from the Internal Revenue Service may help with answers to questions about energy efficient home improvements and residential clean energy property credits.  

Field and/or project verification is a tool used by utilities to ensure incentivized products meet minimum specifications and are installed at the address of intended installation. Field verifications are randomly selected, at a rate of 5-10% of all submissions. The utilities work directly with the contractor or end-user to verify installation and follow up with the distributor if verification fails. Verification may also include asking participating distributors to provide proof of the sale to the customer/contractor and/or the midstream incentive to the contractor in a credit memo or as a line item.  

Midstream incentives are available to contractors installing units with existing oil, propane, wood, or natural gas heat if the heat pump chosen for installation meets the minimum midstream qualifying efficiencies and the equipment is installed within the territory of a participating utility. The incentive passed through from the distributor will be based on the efficiency and type of heat pump as noted in the incentive table. 

Additional fuel-switching incentives are not available through this PNW Midstream program. Check with the customer’s utility for any potential fuel-switching incentives.         

Midstream incentives should be provided from the distributor to the contractor after tax. Please consult with both your distributor and tax accountant to confirm the appropriate way of handling the Midstream incentives for those who maintain a reseller certificate.  

AHRI has revised test methods for <5.4 ton air-sourced heat pumps for the Northern region of the United States for equipment manufactured on or after January 1, 2023.  

Revised test methods increase alignment with federal efficiency standards, as defined by the Department of Energy. These revised test methods introduce new efficiency ratings, including SEER2 and HSPF2 ratings in place of the current SEER and HSPF ratings. Updated equipment capacity data (tonnage) is also available. 

The Program will have a phased approach based on efficiency rating information available for heat pump equipment in AHRI and the distributor invoice date to accommodate this transition. Equipment only rated to SEER and HSPF will continue to be available in the market during the 2023 program year.  

Additional details can be found on the Contractor Incentive Table available on this site.