Efficient Home Water Heating

Cut water heating costs in half

Through TEP’s Efficient Home program, residential customers can receive a $400 rebate for the purchase and installation of an ENERGY STAR® heat pump water heater equipped with a wireless, programmable timer/controller.  The rebate will be issued as a credit on your TEP account.

Water heaters are the second highest energy user in a typical home.  An electric water heater can account for up to 25 percent of your electric bills. Heat pump water heaters are at least twice as efficient as standard electric water heaters.

By upgrading to an ENERGY STAR® heat pump water heater, you can start saving money today and for years to come.

Why heat pump water heaters are highly efficient

Heat pump water heaters are ideal for use in warmer climates like Arizona because they use heat from the surrounding air to warm the water in the tank, and then expel the cooled air. They use electricity to move heat instead of creating heat. This makes them up to three times more efficient than standard electric water heaters.

A heat pump water heater can reduce your operating costs and improve performance and reliability. They also last longer than conventional water heaters – up to 15 years.

For tips on how to choose the right-sized water heater for your home, visit Energy.gov.

Rebate Eligibility

To participate in the program, you must:

  • Be a TEP residential customer.
  • Purchase and install a new heat pump water heater with a timer/controller, either included with the unit or purchased and installed separately in this calendar year. Rebates are not offered on used or refurbished products.
  • The product must be purchased from a local retailer, the TEP Marketplace or an online retailer, not to include eBay or other resale sites, that ships the item to the customer’s service address in TEP’s territory.
  • The product must be installed by a licensed installer, who must provide proof that the work was properly permitted.
  • Provide proof of purchase for the water heater.
  • Connect the timer/controller to Wi-Fi with a strong signal strength.
  • Program the timer/controller to not operate during on-peak hours of 3–7 p.m.
  • Allow a TEP representative to visit and enter your property to verify program requirements are met.

Easy 3-Step Application Process

  1. Please download and complete the rebate Application Form.
  2. Submit the completed and signed rebate Application Form to TEPExistingHomes@tep.com.
  3. A TEP representative will review your application for completeness and program eligibility and schedule a visit to your home to verify compliance with program requirements.


Rebates apply to heat pump water heaters installed during the current calendar year of Jan. 1 through Dec. 31, 2024. Incentives are subject to the availability of funding. This program is subject to change or expire without notice. Full rebate details are available on the Application Form.