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air conditioning units

Custom Incentives: Air conditioning

We offer our business customers financial incentives to make retrofits that improve the efficiency of air conditioning systems. This part of our Custom Incentives program includes heat pumps as well as evaporative coolers and condensers.

*Note: You’ll need to pre-qualify with us before you begin installation.


$0.10 and $200/kW

  • Up to 30% of project cost or $150,000, whichever is less

The demand (kW) reduction incentive will be paid only for projects that reduce electrical demand for at least one hour daily between 4 and 7 p.m. on summer weekdays (peak demand period). Incentives paid for peak demand reduction will be pro-rated for projects that do not reduce electrical demand for the entire 4-7 p.m. time period.

Examples of eligible measures
(The following is not a comprehensive list)

  • High-efficiency chiller replacements that meet and exceed Title 24 baseline requirements
  • Packaged air conditioners and heat pumps (>=240,000 Btu/hr, or 20 tons) that meet and exceed Title 24 baseline requirements
  • Air conditioning complete subsystem replacements (evaporative condensers, air-cooled condensers, cooling towers, or compressors)
  • Electric chiller heat reclaim
  • Evaporative cooling unit installations
  • Evaporative pre-cooling unit installations
  • Indirect evaporative cooling (single stage and dual stage)
  • Heat transfer (including heat pumps) to heat sinks, such as ground source cooling in air-conditioned buildings
  • Conversions from constant air volume to variable air volume
  • Controls and energy management systems for HVAC equipment
  • Variable speed drives on fans (including supply fans, exhaust fans, and cooling tower fans)
  • Variable speed drives on pump motors (including chilled water and cooling tower pumps)
  • Variable speed drive installations on existing air conditioning compressor motors
  • Demand control ventilation installation (CO2 sensors)
  • Air Conditioner air-side or water-side economizer installations on units not already equipped with a 100% economizer
  • Cooling tower upgrades

Many HVAC projects are eligible for SMUD's Express Energy Solutions program -- applying is easy through our online rebate application. Please check our website for eligible measures. We have incentives for burnout and early replacement HVAC projects; early replacement requires pre-approval.

For all other HVAC and EMS projects, please contact SMUD's Custom Incentives program manager Steve Oliver (916) 732-6359 before you purchase equipment.

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