Incentives for Heat Pump Water Heaters Now Require Demand Response and Time-of-Use Enrollment for SMUD Service Area

February 5, 2024, Oakland, CA

TECH Clean California has important updates to the demand response and time-of-use rate (TOU) enrollment rules for all TECH Clean California heat pump water heater projects in the Sacramento Municipal Utility District (SMUD) service area. The new rules affect eligibility for incentives in the SMUD service area, the demand response conversations with customers, and the way some of the related questions on the incentive claim form are filled out.

Summary of Critical Updates

The following new rules apply to heat pump water heater projects with Customer Terms and Conditions signed on or after February 1, 2024:

  • All customers must enroll in a SMUD demand response to be eligible for TECH Clean California heat pump water heater incentives.
    • Customers who are ineligible to enroll in SMUD demand response (about 15 percent) or are unwilling to enroll are not eligible for TECH Clean California heat pump water heater incentives.
  • Customers must agree to be moved onto a SMUD TOU rate if not already on one.
  • Claims must use the updated Customer Terms and Conditions, which now asks SMUD customers to provide their account number.
  • Contractors must fill out the incentive claim form correctly to reflect the demand response rule updates, or claims will be rejected.
    • Answer “Yes” to demand response enrollment.
    • In the demand response program option question, contractors must select the correct demand response program that the customer is enrolled/enrolling in.
    • The correct SMUD account number must be provided.

Webinar: Demand Response Rule Changes for SMUD Territory

If there are any questions, contractors are encouraged to attend our upcoming webinar, “Demand Response Rule Changes for SMUD Territory”. This webinar will explain the rules for the SMUD service area and provide any clarification needed.

February 8, 2024 at 12:30 p.m. Pacific Time

Register Now

See additional details below.

New Demand Response and TOU Enrollment Requirements for SMUD Customers

DEMAND RESPONSE

Starting with all projects with a Customer Terms & Conditions signed date on or after February 1, 2024, TECH Clean California can only pay the incentive if the customer enrolled in a demand response program. We have updated the demand response program options listed for SMUD customers in the tables on switchison.org/techcleanca/demand-response/. Sign up for our upcoming webinar for a better understanding of the program options.

Residential Demand Response Programs:

  • Peak Conserve – Available to any single family customer who has central air conditioning, is not a renter, and is not on a medical equipment discount rate. SMUD will install a small cycling device.
  • My Energy Optimizer Partner – Available to any customer who has central air conditioning, wi-fi, a qualifying smart thermostat (Ecobee, Nest, or Sensi), and is not on a medical equipment discount rate.
  • My Energy Optimizer Partner Plus – Available to any single family customer who has a Tesla Powerwall battery and is not on a medical equipment discount rate.

Commercial Demand Response Program

  • SMUD PowerDirect® – Automated equipment adjustments for larger commercial and industrial customers.

If a SMUD customer cannot enroll in any of those programs, then they are ineligible for TECH Clean California heat pump water heater incentives but can still earn SMUD heat pump water heater incentives. Please note that about 15 percent of customers in SMUD service area do not have central air conditioning and about three percent are on a medical equipment discount rate.

If the SMUD customer is already enrolled in a demand response program that is no longer accepting new enrollments, such as “Peak Corps”, they already meet the enrollment requirement. Reach out to us at tech.contractor@energy-solution.com to help clarify or confirm.

TIME-OF-USE (TOU) Rate

All customers receiving TECH Clean California heat pump water heater incentives will also now need to enroll in a SMUD TOU rate if they are not already on one. Most SMUD customers (about 99 percent of residential and 100 percent of commercial) are already on the SMUD Time-of-Day rate. Customers will agree to this requirement, as with the demand response requirement found in the Customer Terms and Conditions.

Claim Form Instructions

  • You must choose “Yes” to the question, “Did the customer enroll in a demand response program or guarantee they would?"
    • Note – This will track this on the backend with SMUD and need to see most, if not all, of customers enrolled.
  • For the next question, “Which demand response program did the customer enroll in?”, select the correct SMUD program that the customer is actually enrolling/enrolled in.

Reminder: Do not apply for TECH Clean California heat pump water heater incentives if the customer did not enroll in demand response. We will reject claims if the answer to demand response enrollment is “No”.

Demand Response Expectations for Contractors

It is the contractor’s responsibility to make sure that customers are successfully enrolling in demand response. Contractors are expected to help the customer enroll before completing the sale. For any single family and small business incentive claims, we will be paying out incentives before we confirm demand response enrollment to support your cash flow. However, it is critical that the program receives a high percentage of customers enrollment in demand response, and we will be verifying enrollment for every project. Corrective actions, such as program suspensions, will be taken for contractors whose customers do not consistently enroll in a demand response program. It is important to not offer TECH Clean California heat pump water heater incentives to customers who are unwilling to enroll in a SMUD demand response program.

Demand response enrollment is one of the most critical priorities of the TECH Clean California heat pump water heater incentives. The state of California, which is providing this incentive funding, requires demand response enrollment to help ensure that customers receiving new electric appliances can reduce their energy consumption during critical times when the electricity grid is constrained. Contractors are the most critical partner in ensuring that these requirements are met.

Customer Terms and Conditions Instructions

Please start using the updated Customer Terms and Conditions immediately. Any projects with terms and conditions signed on or after February 1, 2024 must use the new version, which collects the SMUD customers’ account number. The account number is needed to confirm their demand response and time of use enrollment with SMUD. It is critical to make sure that the customer enters this number correctly. Contractors can pre-fill it for the customer if they have access to their electric bill. If the account number is incorrect, the application will be rejected, and a request will be made to resubmit it with the correct number. Please see this Contractor Knowledge Base article for an example bill photo highlighting which account number needs to be collected on the Customer Terms and Conditions.

The TECH Clean California initiative is funded by California ratepayers and taxpayers and administered by Southern California Edison Company under the auspices of the California Public Utilities Commission. The TECH Clean California team is led by Energy Solutions and partners with Ardenna Energy, Association of Energy Affordability, Building Decarbonization Coalition, Electrify My Home, Frontier Energy, National Comfort Institute, Energy Outlet, Recurve Analytics, The Ortiz Group, Tre’ Laine Associates, and VEIC.