TECH Program Year 1 (2021-2022): About SB 1477 

Legislative Background 

In 2018, California legislature passed Senate Bill 1477 to spur development of clean homes statewide. This bill supports two programs to reduce energy costs, improve air quality, and reduce climate pollution for residential homes. The programs are the Building Initiative for Low-Emissions Development (BUILD), and Technology and Equipment for Clean Heating (TECH) Clean California. 

To align with California’s Senate Bill 100 goal of achieving 100 percent clean electricity by 2045, full decarbonization of water heating and space conditioning (heating/cooling) technologies in homes and small businesses will likely be required. To achieve the scale necessary to meet state policy objectives, the state will need to invest roughly $50 billion. TECH Clean California aims to leverage its funding to stimulate the additional investments needed and lay the basis for further policy and statutory enactment that, together, will fully decarbonize heating in buildings and deliver extraordinary economic and societal returns, benefitting the health, safety, and well-being of all Californians. 

To comply with California Air and Resources Board (CARB) rules regarding Cap-and-Trade Program funds, spending for the initiative shall be proportionally directed to the gas corporation service territories from which the funds are derived. The percentage allocated for initiative spending in each gas corporation service territory shall be consistent with each gas corporation’s allocation of Cap-and-Trade Program allowances: 

  • Southern California Gas Company (SoCalGas): 49.26 percent 
  • Pacific Gas and Electric Company (PG&E): 42.34 percent 
  • San Diego Gas and Electric Company (SDG&E): 6.77 percent 
  • Southwest Gas Corporation (SWG): 1.63 percent 

Bonus reading California SB 1477 


TECH Program Year 2 (Starting 2023) 

TECH Clean California receives $145 million to expand decarbonization efforts 

California Energy Trailer Bill continues the state’s commitment to heat pump installations. 

In late August (2022), the state of California passed the California Energy Trailer Bill that will direct an additional $145 million to TECH Clean California over the next two years. The funding will be used to continue the statewide initiative aimed at accelerating the adoption of clean space and water heating technology in California homes to help California meet its goal of achieving carbon neutrality by 2045. 

TECH Clean California will receive $50 million in FY 22/23, and $95 million in FY 23/24 contingent on the state meeting revenue projections to increase heat pump installations and reach more Californians in need, growing the contractor workforce, and continuing to create broader market transformation to heat pumps. 


TECH Clean California has already started to transform California’s heat pump market. 

TECH Clean California provides market incentives, workforce education, and training to make it easier for distributors and contractors to stock, sell, and install low-emissions heat pump technology for residential replacement projects. It was designed to support both existing programs through layered incentive funding and to extend incentives statewide with an emphasis on access for low-income and disproportionately impacted populations. 

In its first eight months since launching statewide incentives, TECH Clean California has: 

  • Reserved more than $48 million in incentives and provided over $20 million in single-family and multifamily incentives for residential heat pump water heater and heat pump HVAC installations at a pace that far exceeded any similar program to date (69% of multifamily incentives are reserved for disproportionately impacted populations or affordable housing). 
  • Enrolled and trained nearly 1,000 contractors across the state to sell and install heat pumps in single-family and multifamily homes, including 58% who serve disadvantaged communities.  
  • Launched six pilots to test and assess new strategies that can accelerate the adoption of heat pumps including the Inclusive Utility Investment Program, Low-Income Integration Pilot, Multifamily Pilot, HPWH Load Shifting Pilot, Streamlining Permitting Pilot, and Customer Targeting Pilot. 
  • Solicited and funded 11 Quick Start Grants primarily focused on deployments for low-income customers and historically under-resourced communities that spur innovation to overcome market barriers, including a grant awarded to a contractor to provide loaner water heaters for emergency fuel switching. 
  • Established the data infrastructure and launched a public reporting website to support further investment in the heat pump market. 

California’s early adopter contractors have embraced heat pumps and TECH Clean California is beginning the next phase of work to expand its reach further. Training offered by TECH Clean California raises performance standards for contractors across the state in preparation for an all-electric future.