Albany council moves $139,500 to expand heat-pump rebates after surge in income-qualified applications
March 03, 2026 | Albany City, Alameda County, California
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Albany City Council on March 2 approved a $139,500 appropriation from the Climate Action and Adaptation Reserve to keep the city's heat-pump rebate program operating after staff reported a surge in income-qualified applications.
Community development analyst Michelle Plowes said the program, launched in 2022 and refined in stages, has seen a substantial jump in low- and moderate-income applications since program changes in July. The program reserves and pays rebates for heat-pump water heaters and ducted/ductless heat-pump HVAC systems; income-qualified rebates have increased program participation and the city's projected costs.
Plowes said the program budget for the fiscal year was $30,000; to date the city had paid about $87,000 and reserved another $30,500. Projecting current application rates forward, she said the program needs roughly $139,500 more to cover paid and reserved rebates and expected applications for the remainder of the fiscal year. The Climate Action and Adaptation Reserve had a balance of $152,362, with $125,000 previously appropriated for a gas-line-decommissioning project that staff said could be unappropriated because Department of Energy grant funds are now available.
Council voted unanimously to rescind the prior appropriation for the gas-line project and reallocate $139,500 to the heat-pump rebate program. Supporters said the rebate is effectively reaching low- and moderate-income households and is helping convert more homes to efficient electric heating.
"We've seen a large increase in income-qualified applications," Plowes said. "For many of these households the rebate is the deciding factor to install a heat pump." Councilmembers asked for ongoing transparency about the reserve fund and for staff to monitor application rates so the program does not stop and start.
The appropriation was adopted by council vote; staff will return with ongoing monitoring and any needed budget adjustments.
Community development analyst Michelle Plowes said the program, launched in 2022 and refined in stages, has seen a substantial jump in low- and moderate-income applications since program changes in July. The program reserves and pays rebates for heat-pump water heaters and ducted/ductless heat-pump HVAC systems; income-qualified rebates have increased program participation and the city's projected costs.
Plowes said the program budget for the fiscal year was $30,000; to date the city had paid about $87,000 and reserved another $30,500. Projecting current application rates forward, she said the program needs roughly $139,500 more to cover paid and reserved rebates and expected applications for the remainder of the fiscal year. The Climate Action and Adaptation Reserve had a balance of $152,362, with $125,000 previously appropriated for a gas-line-decommissioning project that staff said could be unappropriated because Department of Energy grant funds are now available.
Council voted unanimously to rescind the prior appropriation for the gas-line project and reallocate $139,500 to the heat-pump rebate program. Supporters said the rebate is effectively reaching low- and moderate-income households and is helping convert more homes to efficient electric heating.
"We've seen a large increase in income-qualified applications," Plowes said. "For many of these households the rebate is the deciding factor to install a heat pump." Councilmembers asked for ongoing transparency about the reserve fund and for staff to monitor application rates so the program does not stop and start.
The appropriation was adopted by council vote; staff will return with ongoing monitoring and any needed budget adjustments.
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