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The Bay Area Takes Bold Steps Towards a Greener Future with Zero-Emission Water Heaters

heat pump

The Bay Area has long been at the forefront of environmental and sustainability efforts and is embarking on yet another significant initiative towards a greener future. Last year, the Bay Area Air Quality Management District (BAAQMD) strengthened building appliance rules to revolutionize how we heat water in our homes and businesses and protect public health (Regulation 9, Rules 4 and 6). These rule changes are intended to improve local air quality by mitigating the environmental impact of heating systems, which contribute a share of Nitrogen Oxide (NOx) pollution in the Bay Area that is comparable to emissions from passenger vehicles. 

Starting with appliances manufactured in 2027, the rules require that all new water heater installations in residential and commercial buildings must be zero-NOx, meaning they do not emit harmful NOx pollutants. By reducing NOx emissions, the amendment aims to improve overall regional air quality. The amended rules are estimated to affect two-thirds of all households and:

  • Prevent up to 85 premature deaths per year 
  • Avoid up to $890M per year in health impacts due to air pollution exposure 
  • Decrease exposure to Particulate Matter (PM) 2.5 micrometers and smaller (PM2.5), particularly in communities of color. PM2.5 is linked to asthma, neurological disease, heart attack, lunch cancer, and more 

The rules – which apply only to new installations and do not require retrofitting existing appliances – establish a phased transition based on the type of appliance:

Rule changes according to appliance type
Effective Model Year Sector Appliance Type Requirement
2027 Residential Water Heater Only zero-emissions electric water heaters can be sold or installed in Bay Area homes.
2029 Residential Furnace Only zero-emissions electric furnaces can be sold or installed in Bay Area homes.
2031 Commercial Water Heater Only zero-emissions large commercial water heaters can be sold or installed in Bay Area businesses.

While 2027 may seem distant, it is important for homeowners, building owners, and future buyers to stay informed and prepare for compliance. Consider the following steps while evaluating your existing water heater and devising an upgrade plan and budget: 

  • While existing appliances aren’t affected, consider your water heater’s lifespan and panel capacity. Typical water heaters have a lifespan of 10-15 years and upgrading on an intentional schedule can help you comply seamlessly while also avoiding the dreaded emergency water heater replacement. Most homes with at least 100 amp panels will be able to electrify, however homes with smaller panels may want to consider upsizing. 
  • Explore available rebates. While the specifics of rebate offerings for 2027 are uncertain, your upgrade plan can help you determine whether or not it is beneficial to take advantage of current rebates. Review all available rebates here:
  • Seek guidance from BayREN’s no-cost Energy Advisor service if you have questions regarding water heaters or need assistance with your home upgrade project:  

The BAAQMD NOx rule represents a significant step toward cleaner air and improved public health for the Bay Area. For more information, visit the Building Appliances Rule Amendments web page.