No More Gas Water Heater Replacements After January 1, 2027 — What Santa Clara County Homeowners Need to Know

by Ramesh Rao

If you live in Santa Clara County, there’s an important change coming: starting January 1, 2027, you won’t be able to replace your gas water heater with another gas one. New units will need to be electric, most likely a heat pump water heater.

Don’t worry — you don’t have to rip out the one you have right now. But once it stops working after 2027, your replacement options will be different.

So, What’s Actually Changing?

The Bay Area Air Quality Management District (which includes all of Santa Clara County) is phasing out new gas water heaters under 75,000 BTU/hr. That means:

Your current gas water heater is fine.
But if it fails after January 1, 2027, you’ll likely need an electric one.

Why You Should Pay Attention

1. It could cost more later

Switching from gas to electric isn’t always simple. You might need:

An electrical panel upgrade
New wiring
A dedicated 240V circuit

These upgrades alone can add $2,000–$6,000+ to the job.

2. A breakdown after 2027 may leave you stuck

If your gas water heater suddenly stops working after the rule kicks in, you might not be able to replace it with another gas unit. And if electrical upgrades are needed, you could be without hot water for a while.

3. It could matter when you sell your home

Buyers are becoming more aware of electrification rules. An older gas water heater might lead to questions or requests for upgrades during inspections.

4. Rebates are available now

There are rebates for heat pump water heaters today, but these programs can shrink or disappear over time.

What I Recommend

If your water heater is 8–10 years old, it’s worth thinking about replacing it before 2027, especially if you want to stick with a gas unit while it’s still allowed.

If you’re planning to sell your home in the next couple of years, updating the water heater early can make your listing more appealing and reduce surprises during inspections.

Need Help?

I’m happy to connect you with trusted local contractors and help you decide what makes the most sense for your home and your budget.