San Jose, CA Heat Pump Leasing & Installation
In this guide
01
Benefits of Palmetto Heat Pumps
Say goodbye to clunky old systems and surprise repairs. Palmetto Comfort Plan gives you a brand-new heat pump, installation, and full support, all wrapped into one subscription.
Year Round Comfort
A high-efficiency heat pump keeps your home cool in summer, warm in winter, and your energy use in check all year long.
Forget the maintenance
With a Comfort Plan subscription, installation and maintenance are fully covered, no surprise bills, no weekend DIY.
Rewards for renewing
Stick with us and earn credits toward your next system upgrade. It’s our way of saying thanks for building a cleaner, comfier future with us.
02
San Jose, CA Heat Pump Load Calculator
Use our calculator below to estimate your home’s heating and cooling needs based on San Jose’s ACCA-standard design conditions: 72°F indoor, 95°F outdoor cooling, and 33°F heating temperatures. For a precise Manual J load calculation and personalized quote, connect with Palmetto’s team. Get in touch with our team for an official quote.
Step 1 of 3
Home location & size
Your home’s location and size directly impact heating needs.
Step 2 of 3
Home attributes
Step 3 of 3
Additional details
Description of what this means for context.
Estimated Heating Needs
Your home’s location falls within the a climate zone with the average extreme winter falling between 10° – 15° F.
Home Details
Recommended equipment capacity
60,000 BTU
5 Tons
Calculated Cooling Mode
102,000 BTU
8.5 Tons
03
Buy it or finance it. Your comfort, your call
There's no wrong way to get cozy. Here's how the options stack up, so you can choose what works best for you.
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Cash |
Loan |
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|---|---|---|---|
| Payment schedule | $0 upfront, then monthly subscription | Full price upfront | $0 upfront, then monthly payment |
| Term length | 10 or 12 years | None | Variable |
| End of term options | Flexible with 25% renewal term credits to new system | No credits to new system | No credits to new system |
| Maintenance included | |||
| Eligible for incentives |
Cash
Loan
Local Incentives
San Jose, CA Heat Pump Rebates & Incentives
Local and federal incentive programs can significantly reduce the cost of a new heat pump system. Here are the programs available to San Jose homeowners.
San Jose Clean Energy EcoHome
Up to $12,000SJCE offers up to $12,000 in rebates for heat pump HVAC systems and heat pump water heaters. SJCE customers must be replacing gas-powered equipment with an electric heat pump.
Federal IRA Tax Credit
Up to $2,000The Inflation Reduction Act provides a federal tax credit of up to $2,000 for qualifying heat pump installations through 2032.
San Jose homeowners have access to the San Jose Clean Energy EcoHome Rebate program, which offers up to $12,000 in rebates for heat pump HVAC systems and heat pump water heaters when replacing gas-powered equipment. Additionally, all homeowners can claim the federal IRA tax credit of up to $2,000. Palmetto can help homeowners navigate these programs, maximize available rebates, and explore flexible financing options like our Comfort Plan lease to make heat pump installation affordable with zero upfront costs.
Incentive information is based on publicly available data as of 2026 and may change. Contact program administrators to verify current availability and eligibility requirements.
04
Climate Zones
San Jose falls within IECC Climate Zone 10, characterized by mild winters (design heating at 33°F) and warm summers (design cooling at 95°F). This moderate climate means your heat pump needs to handle steady cooling demands without the extreme cold challenges seen in northern regions. At Palmetto, we understand San Jose's unique conditions and can help you select a system sized precisely for local performance. Explore other climate zones below or enter your ZIP code to confirm yours.
Climate Zone 1
Climate zone 1 is not typically seen within the United States outside of Alaska. It represents the coldest climates on the planet.
Climate Zone 1A
Avg. extreme winters: -60° to -55° F
Climate Zone 1B
Avg. extreme winters: -55° to -50° F
San Jose Electricity Prices
San Jose residents face some of the steepest electricity costs in the nation—and rates continue climbing each year.
California's electricity rates have surged 40% since 2021, jumping from 22.8 to 31.9 cents per kWh. That's nearly double the national average of 16.5 cents per kWh in 2024.
Heat pumps offer a practical solution to rising energy bills. Because they're 2-3 times more efficient than traditional HVAC systems, they use significantly less electricity to deliver the same heating and cooling comfort.
As electricity rates continue their upward trend, the efficiency advantage of heat pumps becomes increasingly valuable. Lower energy consumption means your monthly bills stay manageable even as rates rise over time.
Price of Energy: California vs National Average
San Jose Area Utility Providers
San Jose residents receive electricity primarily from Pacific Gas and Electric (PG&E). As of 2023, PG&E's residential rate averaged 34.0¢ per kWh—significantly higher than both the national average of 16.0¢ and California's state average of 29.50¢.
California's electricity costs reflect substantial investments in renewable energy infrastructure, wildfire prevention measures, and grid modernization. PG&E's rates also account for the state's ambitious clean energy mandates and the challenging terrain of its expansive service territory.
While San Jose's electricity rates run high, heat pumps can actually help reduce your total energy spending. Their exceptional efficiency means they use far less energy than traditional heating and cooling systems—often cutting energy consumption by 50% or more compared to older HVAC equipment.
San Jose Utilities Electricity Rates
Let our smart tools do the heavy lifting.
Get personalized tips, usage insights, project tracking, and that daily satisfaction of making your energy work smarter with the Palmetto mobile app.
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- Energy insights & Dashboard
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- Support Whenever You Need It
Repair versus replace
When a heat pump is in need of repair it is worth considering whether a replacement would be a better investment. While each case is unique, we generally recommend investing in a new unit when repairs exceed $5,000.
A heat pump's lifetime is impacted by a number of factors including environment, use and the quality of the unit. It's important to choose the right unit for your climate zone and home's unique attributes.
When you are in need of repair, we recommend choosing a service provider that is an expert in the heat pump brand you have installed, and checking online reviews to ensure you are investing in the right level of service.
| Potential repair | Cost range | Description |
|---|---|---|
| Capacitor Replacement | $150 - $400 | Common issue when unit struggles to start or makes a humming noise. Capacitors store the electrical energy needed to start the compressor and fan motors. |
| Refrigerant Recharge | $250 - $750 | Needed when the system loses cooling or heating efficiency due to low refrigerant levels. Includes leak detection, repair of minor leaks, and recharging the system to the manufacturer-specified level. |
| Reversing Valve Replacement | $450 - $900 | Required when the unit cannot switch between heating and cooling modes. The reversing valve directs refrigerant flow and is unique to heat pump systems. |
| Compressor Replacement | $1,500 - $3,000 | Major repair needed when the unit fails to heat or cool entirely. The compressor is the heart of the system, circulating refrigerant between the indoor and outdoor coils. |
| Evaporator/Condenser Coil Replacement | $1,200 - $2,800 | Replacement needed when coils develop leaks or corrosion that cannot be economically repaired. Coil damage reduces heat transfer efficiency and can cause refrigerant loss. |
| Control Board Replacement | $500 - $1,200 | Required when the system has electrical failures or erratic behavior. The control board manages all system operations including defrost cycles, fan speeds, and compressor staging. |
| Full System Replacement | $4,500 - $8,000+ | When repairs exceed the value of the unit or multiple major components fail simultaneously. Includes removal of the old system and installation of a new heat pump with updated refrigerant lines and electrical connections. |
Frequently Asked Questions
Heat pumps are an excellent fit for San Jose's mild Climate Zone 10 conditions, where winter temperatures rarely drop below 33°F and summers peak around 95°F. This moderate climate allows heat pumps to operate efficiently year-round for both heating and cooling, while California's electricity rate of 31.9¢ per kWh makes their energy efficiency particularly valuable for lowering utility costs.
San Jose homeowners can choose between two practical pathways: Palmetto's Comfort Plan offers $0 upfront with maintenance included, or direct purchase provides equipment ownership with potential federal tax credits up to $2,000 under the Inflation Reduction Act. Both options deliver efficient climate control suited to San Jose's weather patterns, making heat pumps a sensible investment for local homeowners.
Heat pumps are highly efficient in San Jose's mild climate, which falls in Climate Zone 10 with moderate temperatures (design heating: 33°F, design cooling: 95°F). Unlike regions with extreme cold, San Jose's temperate weather allows heat pumps to operate at peak efficiency year-round, typically delivering 2-4 units of heating or cooling for every unit of electricity consumed.
This efficiency translates to meaningful savings, even with California's electricity rate of 31.9¢ per kWh. Heat pumps work by transferring heat rather than generating it, making them far more efficient than traditional heating systems. San Jose's climate rarely drops to temperatures where heat pump efficiency decreases, meaning homeowners can expect consistent, cost-effective comfort throughout the year.
The choice between leasing and buying a heat pump in San Jose depends on your financial priorities and homeownership plans. Leasing through Palmetto's Comfort Plan requires $0 upfront and includes all maintenance and repairs, making it ideal if you prefer predictable monthly costs. Buying outright means you own the equipment and can claim up to $2,000 in federal tax credits under the Inflation Reduction Act, plus local rebates.
San Jose's mild Climate Zone 10 conditions mean your heat pump will run efficiently year-round, which matters for long-term value calculations. With California's electricity rates at 31.9¢ per kWh, both options deliver energy savings compared to traditional systems. Consider leasing if you want hassle-free maintenance, or buying if you plan to stay in your home long-term and want to maximize available incentives.
Heat pump installation costs in San Jose typically range from $8,000 to $20,000 for a complete system, depending on your home's size, existing infrastructure, and equipment specifications. San Jose's mild Climate Zone 10 conditions (with winter lows around 33°F and summer highs near 95°F) make heat pumps particularly efficient here, which can influence equipment selection and overall project costs.
Palmetto offers two flexible pathways to fit your budget: a Comfort Plan with $0 upfront cost and predictable monthly payments that include all maintenance and repairs, or direct purchase where you own the system outright and may qualify for up to $2,000 in federal tax credits under the Inflation Reduction Act plus local rebates. With California's electricity rates at 31.9¢ per kWh, an efficient heat pump can deliver meaningful long-term savings on your energy bills.
Yes, heat pumps are typically worth it financially in San Jose. With California's electricity rates at 31.9¢ per kWh, heat pumps can significantly reduce your energy bills since they move heat rather than generate it, making them 2-4 times more efficient than traditional systems. San Jose's mild climate (Zone 10) is ideal for heat pump performance year-round.
Palmetto makes heat pumps more accessible with flexible options: our Comfort Plan requires $0 upfront with predictable monthly payments and included maintenance, while direct purchase may qualify for up to $2,000 in federal tax credits under the Inflation Reduction Act. Most San Jose homeowners see meaningful savings within the first few years, especially when replacing older heating and cooling systems.
Heat pumps in San Jose are installed by licensed HVAC contractors who specialize in heating and cooling systems. These professionals assess your home's specific needs in Climate Zone 10, ensure proper sizing for San Jose's mild winters (design temp: 33°F) and warm summers (95°F), and handle all permitting and installation requirements.
Palmetto offers heat pump installation through qualified local contractors with two flexible options: a Comfort Plan with $0 upfront cost and all maintenance included, or direct purchase where you own the equipment and may qualify for up to $2,000 in federal tax credits. Both options ensure professional installation tailored to your home's requirements and San Jose's climate conditions.
A heat pump is actually a type of HVAC system. HVAC stands for Heating, Ventilation, and Air Conditioning—it's an umbrella term for any equipment that controls your home's temperature. Heat pumps are unique because they both heat and cool your home using the same equipment, transferring heat rather than generating it through combustion.
In San Jose's Climate Zone 10, where temperatures range from 33°F to 95°F, heat pumps work efficiently year-round while using less energy than traditional furnaces and air conditioners. With California's electricity rates at 31.9¢ per kWh, this efficiency can translate to meaningful savings. Palmetto offers heat pumps through flexible options including our Comfort Plan with $0 upfront cost and included maintenance, or direct purchase with potential federal tax credits up to $2,000.