If you weren’t in the market for a new water heater in 2013, you may not have been aware of a rebate program currently being offered by PG&E that can save you hundreds of dollars. If you live in the San Francisco Bay Area and buy your electricity and/or gas from PG&E, you could be eligible for this rebate, which gives you $200 off the cost of an Energy Star certified gas water heater.

This rebate will expire in 2014, and important changes to the federal government’s stance on water heater energy efficiency mean that you may want to replace that leaky water heater before the year is out. Learn more about the rebate program:

What’s the Energy Star Water Heater Rebate?

PG&E offers the $200 rebate for any natural gas water heater installed in an existing home that has an Efficiency Factor (EF) rating of .67 (excluding tankless), and is certified by Energy Star, the government-backed program helping businesses and individuals protect the environment through superior energy efficiency. Water heaters falling in this category generally have a number of features to help reduce the amount of gas required to heat the water – thus reducing the cost to operate them – from more built-in insulation to an electrical igniter for your pilot light and a flu damper to reduce standby heat losses.

Do I have to spend more for an Energy Star gas water heater?

In most cases, no. Check with your local installer or retailer. Depending on where you buy, the after-rebate price could be equal to or less than the cost of a standard non-Energy Star tank. And some progressive installers (such as Fast Water Heater, located in San Francisco and San Jose and servicing all Bay Area counties) will even offer this rebate to you as an instant credit to your bill, so you don’t have to deal with filing paperwork for the rebate.

How much can I save in gas costs with an Energy Star gas water heater?

The typical home can save about $250-$300 over the life of the water heater. And if you currently have an electric water heater, consider converting to gas and still taking advantage of the rebate. Plus, considering the average home spends about $500 per year in water heating costs with electricity, you’ll be saving close to $280 per year ($2,800 over the life of the water heater!) by switching to gas.

My water heater will probably last another year or two, should I just wait?

You might want to consider taking advantage of the rebate now if your water heater is nearing its end (on average, water heaters last between 8 and 12 years). In 2015, the federal government is changing the regulations around energy efficiency of water heaters, requiring that newer water heaters have a higher efficiency rating than most of the standard models available today. If you don’t take advantage now, you could be spending up to $200 more than you would on standard tanks offered today because they will no longer meet the federal requirements. Here’s a guide for the efficiency requirements for several common sizes of water heaters coming in 2015:

Gallon Capacity 28 30 38 40 50 60 75 100
2015 Gas Water Heater Efficiency Standards: .63 .63 .62 .62 .60 .75 .74 .72

PG&E’s rebate won’t be available in 2015, so you will be missing out on a great incentive if you don’t act now.

Moral of the story:
Stop wasting energy, start saving money, do your part for the environment and take advantage of this great rebate from PG&E if you think your water heater could use replacing, and remember, 2014 is your last chance!

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