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Demand Response

By making the smart choice to install a heat pump water heater to get hot water, you’ll save $3,100 or more on your new equipment when you work with a TECH Clean California contractor. To receive this TECH Clean California incentive, you’re required to enroll in a demand response program. The state of California, which is providing this incentive funding, is requiring this to help ensure that these new electric appliances can reduce their energy consumption during certain times of the year when the grid is constrained. Here is what you need to know about the demand response program requirements for receiving these incentives. 

What is a demand response program?

A demand response program encourages participants to make slight shifts to when they use energy to help reduce the demand for energy during “peak” hours (typically in the evenings or during extremely hot days). As more Californians switch from fossil fuel to electric appliances, it’s even more important to manage the supply of electricity in the most effective way. When you participate in a demand response program, you agree to shift some of your energy use to off-peak times. For some programs, daily “peak” times can be in the evening hours when demand for electricity is highest. Other programs may have “peak” times only during certain days of the year, during the hours when electricity demand is especially high, and close to exceeding the available supply of electricity. This happens when wildfires, floods, hot summer days, other extreme weather events, or unexpected system maintenance/outages strain the electric system. 

Many demand response programs don’t require that you connect your appliances or smart devices to the program. These programs work by sending you notifications about peak events, and then you manually make adjustments to your energy use. Typically, you are notified the day before and/or the day of an event so you can plan to make adjustments to your energy use, like pre-cooling your home during off-peak hours, or putting off running the dishwasher or doing laundry. The notifications will be sent via email, text, or a smartphone app. Other demand response programs can connect directly to your smart device such as your water heater, thermostat, or home or business energy management system. The program communicates automatically with the equipment, so you don’t have to do anything to respond. But even if your appliances are connected, you always have the option to adjust your own appliances during an event. 

Frequently asked questions

By participating in demand response, you may reduce your energy usage during the hours when energy is most expensive, so you avoid paying the highest costs for electricity. Plus, many of these programs also provide an enrollment bonus ranging from $50-$150 and an ongoing participation bonus of $2-$5 per month or other rewards for participation.

While you’re maximizing your electricity savings, you’re also helping to make California’s energy grid cleaner, more reliable, and more affordable for everyone. You and your family or business contribute to cleaner, healthier air and a more resilient and sustainable energy system.

Most programs allow customers to opt out on occasion as needed without penalty. Many of the demand response programs listed don’t have a direct connection to your home equipment and don’t collect data directly. Some demand response programs that are connected to your equipment may gather data about energy usage to provide a customized experience and to refine the effectiveness of the program, but user data is never sold or shared publicly. The data will not include any personally identifiable information (PII) reducing the risk to customer privacy in the gathering or use of that data.  

No. You can enroll in any qualified demand response program  (it does not have to be heat pump water heater specific) to receive TECH Clean California heat pump water heater incentives. Most program options aren’t specifically for heat pump water heaters and instead adjust usage for other technologies such as smart thermostats or smart plugs. Some programs don’t have any equipment requirements and allow you to choose how to save. For those programs you receive notifications over email or text and adjust your home energy usage manually. See the list of qualified demand response programs below that includes a description of the technology focus (if any) for each program.

If there is a heat pump water heater-specific demand response program option listed for your area, it can be a great option to increase the benefits you receive from your new equipment! If you enroll in a heat pump water heater demand response program, your tank is automatically pre-heated one to three hours before the peak period, so the hot water is topped off in your tank and kept hot until you need it. Then, during the peak or event period, the water heater avoids operation unless operation is required to meet hot water demand.

No. You don’t have to make any adjustments to when you use hot water because a heat pump water heater can store hot water so it’s ready when you are. Your water heater stays on throughout the event, and if you need additional hot water, it will continue to heat water. 

You must remain enrolled in a qualified demand response program for at least three years.

Please review your options and enroll in at least one program to meet your TECH heat pump water heater requirement for earning incentives. Rewards for participation vary from program to program, so review the program options carefully and choose what works best for you.

Residential demand response programs





(1) Closed to new enrollments in 2024
(2) Open to central Orange County residents and businesses (large parts of Cities in: Irvine, Tustin, Santa Ana and Newport Beach, as well as all or parts of the cities of Aliso Viejo, Corona del Mar, Costa Mesa, Laguna Beach, Laguna Woods, Laguna Hills, Laguna Niguel, Lake Forest and Mission Viejo). Must be located on a circuit interconnected with Santiago or Johanna High Voltage Substation.

This table was last updated on 11/17/2023.

Commercial demand response programs





(1) Must be customers of PG&E, SCE, and SDG&E
(2) Open to central Orange County residents and businesses (large parts of Cities in: Irvine, Tustin, Santa Ana and Newport Beach, as well as all or parts of the cities of Aliso Viejo, Corona del Mar, Costa Mesa, Laguna Beach, Laguna Woods, Laguna Hills, Laguna Niguel, Lake Forest, and Mission Viejo). Must be located on a circuit interconnected with Santiago or Johanna High Voltage Substation.

This table was last updated on 10/6/2023.

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