Press release from the City of Arcata:

Arcata, CA, July 3, 2025 – The City of Arcata wishes to inform the public about the Energy Efficient Home Improvement Tax Credit which helps residents to upgrade old water heaters, saving them hundreds or even thousands of dollars a year while protecting the environment.

The Inflation Reduction Act, passed in 2022, included multiple tax credits and reductions for various environmentally conscious purchases, especially for home improvements through the Energy Efficient Home Improvement Credit. However, the recent approval by Congress of what is commonly known as the “One Big Beautiful Bill Act” makes many of these tax credits unlikely to extend past the end of the year. The City would like to encourage residents, especially those with aging water heaters, to utilize these tax credits and benefits while they remain available.

“If your tank water heater is over nine years old or on demand water is over fifteen years old, its days are numbered” says Arcata Transportation Safety Committee member and local climate advocate, Wendy Ring. “A new heat pump water heater costs less than a traditional gas or electric water heater, saves up to $1,000 per year on electric bills and is the climate equivalent of planting 43 trees.”

Those wishing to upgrade their equipment to a heat pump water heater can currently receive a tax credit for up to 30% of costs including certain labor with a $2,000 cap. Redwood Coast Energy Authority (RCEA) also offers a rebate for those upgrading to a heat pump water heater of up to $700. More information on the rebate can be found at redwoodenergy.org.

Residents who are interested in learning more are encouraged to visit the IRS’s website, learn more at homes.rewiringamerica.org and contact a local volunteer coach trained and certified by the national non- profit Rewiring America at (707) 845-2466 to ask questions.