Enhanced Support Pathway Incentives

Enhanced Support Pathways

The enhanced support pathway (ESP) incentives focus on overcoming specific barriers to the adoption of heat pump technologies in California’s multifamily buildings sector. These pathways include additional financial incentives that stack on top of standard multifamily incentives funded by California’s Greenhouse Gas Reduction Fund (GGRF). Incentives are available to TECH Clean California contractors, and they are required to pass 100 percent of the savings onto the property owner. In addition to incentives, these ESPs provide property owners and contractors with support that includes:

• Training, technical, and administrative support to scope and carry out upgrades
• Increased experience and capacity with heat pump technologies
• Increased comfort, more efficient equipment, and reduced emissions in contribution toward the state’s larger climate targets

Participation in ESP incentivized projects will be selected by a random lottery system. Each applicant can submit up to five projects, and there are contractor caps and project incentive caps for each pathway. In addition, California Department of Industrial Relations (DIR) public works prevailing wage compliance requirements apply to all multifamily incentives. Full details can be found in the Terms and Conditions.

There are three types of enhanced support pathway incentives:

1. Electrification Readiness
2. Central Heat Pump Water Heater Optimization
3. Small Portfolio Owners

Electrification Readiness

Because full electrification all at once is not always possible. 

One of the major barriers for electrification is the ease of replacing equipment at unit turnover and/or burnout on a property not undergoing a large capital improvement scope of work. This pathway enables electrification over time for projects facing these types of barriers.

This initiative will engage with property owners to evaluate the potential for full electrification and to develop an electrification readiness plan for a property to undertake investment in electrical infrastructure required for immediate and future heat pump water heater and heat pump HVAC installations. Participants must install at least one heat pump water heater and/or space conditioning system in at least one unit.

Electrification Readiness incentives - stackable with standard incentives

*Participating contractors will be required to attend virtual training on electrical evaluation and readiness.

Measure	Maximum Incentive*	Unit
Electrical Monitoring and Engineering (pre-retrofit)	$5,000	per property
Electrical Infrastructure	$8,000	per housing unit
Circuits - Electrification Readiness	$500	per circuit
Physical Modifications – Electrification Readiness	$1,000	per housing unit

Central Heat Pump Water Heater Optimization

Designed to support contactors new to central heat pump water heater plants.

Central heat pump water heating systems are newer technology. For many property owners and contractors, that requires a different engineering and design approach and can be a more complicated system than a gas boiler. This pathway will provide pre- and post-installation technical support and system-based monitoring for a limited number of properties installing central heat pump water heating systems.

Required contractor training will include findings from completed projects that deployed monitoring, the monitoring protocols for pre- and post-monitoring, and an overview of monitoring equipment. This training and technical assistance will be coupled with enhanced incentives to support pre-monitoring, troubleshooting, and post-monitoring. All multifamily properties with existing gas central water heating systems looking to switch to a heat pump are eligible.

Central heat pump water heater optimization incentives – stackable with standard incentives

*Participating contractors must have installed central heat pump water heating plants for no more than two projects to date under TECH Clean California. Contractors will be required to attend online training on monitoring protocols and equipment.

Measure	Maximum Incentive*	Unit
Pre-Retrofit Monitoring	$5,000	per project
Pre-Retrofit Fixing Distribution Issues	$17,000 per plant; capped at $34,000 per project	per plant
Post-Retrofit Monitoring	$5,000	per project
Monitoring Equipment Allowance	$5,000	per contractor

Small Portfolio Owners

To engage and support independent owners with small portfolios seeking to electrify.

Owners with smaller portfolios are more likely to manage unregulated housing, which is likely naturally occurring, low-income housing and does not qualify for many low-income programs. In addition, independent property owners with modest portfolios tend to have fewer resources (financial, time, and staff capacity) to manage properties and much less participate in programs. As a result, this is a hard-to-reach ownership population that is often left behind by incentive programs. Therefore, leaving properties in this housing sector underserved and less prepared for future regulatory changes.

The intent of the initiative is to expand the breadth of property owners participating in TECH Clean California to include owners with smaller portfolios often referred to as “mom and pop” owners with limited resources. This initiative will support more equitable decarbonization and bring benefits to residents that cannot undertake these home improvements as renters.

Small portfolio owner incentives - stackable with standard incentives

*For independent owners with portfolios of 2 to 15 multifamily properties. Participating owners will be expected to attend quarterly roundtable meetings with peer owners to share knowledge, challenges, and solutions. The participating property must meet affordability criteria, determined by tenants’ income or rent relative to household 80 percent area median income (AMI).

Measure	Maximum Incentive*	Unit
Enhanced Incentives	$10,000	per housing unit