Update on Air District Requirement for Residential Water Heaters

On November 4, the Bay Area Air District approved updates to its zero-emission residential water heater requirement, extending the start date from January 2027 to January 2028 and establishing exemptions for low-income property owners and properties with significant electrical or space limitations. The extra year gives property owners more time to plan and understand what's required.

Beginning in January 2028, when a gas-powered water heater needs replacement, most property owners will need to install a zero-emission electric model unless they qualify for an exemption. Existing gas-powered water heaters can remain in use until they reach the end of their life.

Exemption categories for property owners include:

• Low-income property owners, defined as those earning less than 80% of the area's median income, including participants in programs such as Medi-Cal or CalFresh
• Households paying more than 28% of their income toward their mortgage and property taxes
• Space-constrained properties without enough room or ventilation to install a compliant unit
• Properties with electrical limitations, such as panels below 100 amps, insufficient panel capacity, or a need to run electrical lines more than 50 feet
• Property owners can find more information about the compliance timeline, exemption categories, and available rebates on the Air District's Building Appliances webpage.

The Air District also has rules in place to phase out the sale and installation of gas-powered residential and commercial furnaces, as well as gas-powered water heaters for large commercial and multifamily properties. Compliance dates for these appliances remain unchanged, with requirements taking effect in January 2029 for furnaces and January 2031 for water heaters.