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PowerPoint Template
Bay Area Air District Zero
NOx Rule Update
Board of Directors Meeting
August 12, 2026
Item 5
PRESENTATION
2 • Point-of-sale only. Applies when a unit is sold or installed — it doesn’t touch appliances already in service, and covers no other appliance.
• Zero NOx, in practice, means electric. Only electric units currently meet a zero NOx standard, so at replacement, this makes the practical choice a heat pump water heater. • Adopted, now being refined. The Air District adopted the standard in March 2023, effective January 2027, and is now adding flexibility before it takes effect.
Background: the Rule at a Glance
Rule 9-6 sets a NOx limit on water heaters at the point of sale or installation — it does not force anyone to replace a working unit.
Up to 85
premature deaths avoided each year
Up to $890M
in health impacts avoided each year
Air District estimate for the 2023 water heater and furnace standards combined.
Item 5
PRESENTATION
3 Status: Where Things Stand
The Air District released draft amendments in July 2026. The current January 1, 2027 date stays in effect unless the Board acts.
Delay the standard by one year
The small water heater deadline moves
to January 1, 2028; larger commercial
units move to 2033.
Add targeted exemptions
Relief for property owners facing the
greatest cost or feasibility barriers, issued
through a new Air District certificate.
WHAT HAPPENS NEXT
Aug 13, 2026
Public comment period
closes
Nov 4, 2026
Air District Board decision
(tentative)
Jan 1, 2028
Standard applies to small
units, if adopted
Item 5
PRESENTATION
Proposed Exemptions
The draft focuses relief where installing a zero NOx unit is hardest or most costly. Exact eligibility rules are still being finalized. Staff estimates 38% of projects in the Bay Area would qualify.
High-demand businesses
Restaurants, laundries, dry
cleaners, healthcare, and
assisted living businesses
eligible for self-certification
Multifamily & deed-restricted affordable
housing
Buildings with 5+ units, or
qualifying affordable
housing programs —
delayed to Jan 1, 2033
Hydronic systems
Delayed to Jan 1, 2031, due
to limited availability of
compliant products
Units 30 gallons or
smaller
Outside the zero NOx
standard entirely — not
time-limited, never in
scope
4 Low-income property
owners
CARE/FERA and other
qualifying low-income
program participants, or
households spending 28%+
of gross income on housing
costs
Space or ventilation
constraints
Air District exemption
certificate for enclosed
spaces under 700 cubic ft or
ceiling heights too low for a
compliant install
Electrical panel
constraints
Licensed-contractor
certification for panels under
100 amps (60 for 5+ unit
buildings), knob-and-tube
wiring, or no open breaker
space
Emergency
replacements
Licensed contractors may
install a non-compliant unit
as a temporary bridge,
then must swap in a
compliant unit within 12
months
Item 5
PRESENTATION
5 Proposed Flexibility Measures by the numbers
From the July 13, 2026 Updated Regulatory Overview
15.8%
Very low income /
housing cost burdened
~19,000 installs/yr
20%
Project / building
constraints
~24,000 installs/yr
~10%
Continued sales,
≤30-gal units
tracked separately, per year
Staff's stated total: up to 38% of small water heater installs qualify for a certified exemption Outside the standard entirely: small units (30 gallons or less), mobile home water heaters, and pool and spa heaters are not covered at all.
Item 5
PRESENTATION
6 What this means for SVCE
Three takeaways for our forecasting and program planning.
Timing shifts to 2028
A one-year delay moves the demand for our heat pump water heater rebates and the contractor pipeline into 2028.
Exemptions are the key unknown
The share of installations that end up exempt is the biggest variable in forecasting near-term participation. Early Air District estimates suggested a meaningful portion could qualify.
A natural handoff to our programs
Many customers who qualify for an exemption are the same customers eligible for SVCE and partner incentives that make an electric install affordable.
Item 5
PRESENTATION
7 Helping our Customers Prepare
SVCE is not regulated under Rule 9-6 and has no compliance obligation — our role is to help our customers prepare.
Technical Input
Sharing cost, market
readiness, and incentive
data through the Air
District’s stakeholder
process.
Multi-agency
Coordination
Working with peer CCAs,
cities, and partners so
residents across the region
get consistent information.
Customer & Local
Government Readiness
Rebates, Go Electric
Advisor, and outreach. Co-hosting “Upcoming Air
District Regulations –
What Elected Officials
Need to Know” event with
the Santa Clara County
Cities Association on Aug
31 at Sunnyvale City Hall.
Item 5
PRESENTATION
8 Looking ahead: timeline & next steps
Staff will return to the Board with an update after the Air District’s decision.
Air District
public
comment
period
closes
“Bay Area Air District
Appliance Rules --
What Elected Officials
Need to Know”
Workshop
Sunnyvale City Hall,
6:00 -7:30 PM
Air District
Board
decision
(tentative)
Standard
applies to
small water
heaters, if
adopted
Aug
13 2026
Aug
31 2026
Nov
4 2026
Jan
1 2028
Item 5
PRESENTATION
9 Public Awareness Campaign Timeline
The Air District plans to engage the public in phases in order to build awareness for the rule implementation date and flexibility measures
Phase I
Now through
fall
• Develop clear, audience-specific messaging focused on benefits of switching to zero NOx appliances
• Conduct baseline awareness survey (April–June)
• Launch media, contractor, and social outreach
Phase II
Fall through
early 2027
(post-Board
action)
• Launch local advertising campaign
• Expand outreach, including door-to-door, with clear timelines and calls to action Phase III
2027 and beyond • Continuation of advertising, public relations, stakeholder, and social media outreach Source: Bay Area Air District, Board of Directors Meeting, May 6, 2026 Item 5
PRESENTATION
J
Extended Timeline
May 6-13, 2026 Rule 9-6 update on exemptions for full Air District Board July 13, 2026 Rule 9-6 rule amendment changes released for public comment August 13, 2026 Rule 9-6 Comment period for proposed amendments closes August 2026 Rule 9-6 incentive gap analysis and model permitting ordinance at Stationary Source Committee
Nov 4, 2026 Rule 9-6 Full Air District Board vote
Fall 2026 Rule 9-4 presentation to Stationary Source Committee December 2026 Rule 9-4 Implementation Readiness report and presentation to Air District Board of Directors
January 1, 2028 Rule 9-6 compliance start date, subject to change per flexibility amendments process, outcomes and administrative requirements Rule 9-6 = residential water heaters; Rule 9-4 = furnaces Item 5
PRESENTATION
• Subtitle
New SV Clean Energy
PowerPoint Template
Programs + Marketing:
Mid-Year Highlights
Raul Hernandez, Marketing Manager
Nupur Hiremath, Manager of Decarbonization Programs
August 2026
Item 6
PRESENTATION
2 Effective marketing & diverse programs help
our customers decarbonize
Diverse program
offerings enable all
customers to
decarbonize and allow
SVCE to test, and
innovate, solutions to
key barriers to low-cost, comprehensive
electrification
Effective marketing
strategies raise
awareness of
programs and offer a
“hook” that attracts
customers to
participate
Item 6
PRESENTATION
3 Education & Action content: Leading
marketing with problem/benefits, then
guide to solutions.
Marketing Strategy
High level concept of how customer relationships progress Push
Pull
EDUCATION
ACTION
Item 6
PRESENTATION
4 Program Strategy
Portfolio for anyone – packaged from the customer perspective Single-family
• Rebates for buildings and EVs
• Direct installation with SVCE contractors
• Finding contractors
• Free advice
Multi-family
• Direct installation with SVCE contractors
• Rebates for EV charging
• Rebates for EVs
• Free advice
Businesses, Non-Profits, Member Agencies
• Rebates for buildings and EV charging
• Grants
• Free advice
Item 6
PRESENTATION
5 Highlights
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6 1. eHub gets a boost with new marketing
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PRESENTATION
7 Inaugural EV Ride and Drive
in Gilroy in June 2026
•Collaborated with our CBO
partner, Breathe California
•Facilitated nearly 60 test
drives in four hours,
attracting ~100 attendees
2. First EV “Ride and Drive” event in South
County!
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PRESENTATION
8 • New dedicated
Heat Pump
campaign
webpage
• Meta + Google
ads & videos
• Email reminders
a month before
bonus start
• Blurb in
monthly
newsletters
3. Marketing the $500 HPWH Bonus Rebate
Item 6
PRESENTATION
9 4. Bonus rebates drove customer interest in
the rebate program...
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40 60
80 100
120
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180
May-24
Jun-24
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Aug-25
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Oct-25
Nov-25
Dec-25
Jan-26
Feb-26
Mar-26
Apr-26
May-26
Jun-26
Number of New HPWH
Applications
Home Rebates Enrollment
>200%
increase in
monthly
application
traffic
SVCE $500
HPWH Bonus
5/1/26 – 6/30/26
Federal tax
credits ended
on 12/31/25
Item 6
PRESENTATION
Illhlllllllll
10 … and in direct installation services!
0 2
4 6
8 10
12 14
16 18
Jan-25
Feb-25
Mar-25
Apr-25
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Jan-26
Feb-26
Mar-26
Apr-26
May-26
Jun-26
Number of New Participants
Full-Service Home Upgrades Enrollment Date
Federal tax
credits ended
on 12/31/25
SVCE $500
HPWH Bonus
5/1/26 – 6/30/26
Data as of July 24, 2026: 102 total participants
>200%
increase in
monthly
application
traffic
Item 6
PRESENTATION
11 5. Multifamily Retrofits projects at 10 sites
with 676 units are underway!
Pre-construction tenant
engagement workshop
HPWH installation
at Gilroy site
Heat pump installation at Sunnyvale
site with no previous AC
Oct ‘25 Mar ‘26 May ‘26
• Sunnyvale site
complete
• Gilroy site tenant
workshop
• Morgan Hill site EV
charger installations
completed
• 5 additional sites
enrolled
• Morgan Hill site tenant
workshop
Aug ‘26
• Gilroy site target
completion date
Mar ‘27
• Morgan Hill site target
completion date
Item 6
PRESENTATION
12 6. Rebates are available for local businesses…
• Door-to-door outreach to let
businesses know about
rebates
• Rebates for induction, heat
pump water heating, and space
heating and cooling
• Non-profits and member
agencies are also eligible
Rooftop Heat
Pump HVAC
units at
Morgan Hill PD
SVCE visiting 112
businesses in July
Item 6
PRESENTATION
13 • Expanded eligibility – new in June 2026
• Multifamily Properties (4+ units)
• Businesses/Workplaces* (new)
• Publicly Accessible Locations* (new)
• Affordable Housing
… and they can also get EV charging rebates
• Simplified rebate structure
• Flat rebates, up to 100% of project costs
• No limit on outlet installations at multifamily
• Maximum 18 Level 2 ports (vs. $ maximum)
SVCE-funded EV chargers at a multifamily
site in Mountain View
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PRESENTATION
14 • Help amplify our marketing in your communities
• Leverage SVCE support for local climate action (e.g., city rebates, grants)
• Connect SVCE staff to hard-to-reach customers or community-based organizations in your community How can you support these initiatives
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PRESENTATION
15 More Decarbonization
Programs & Marketing
Highlights are in the
Quarterly Report in
today’s agenda packet
Thank you!
Item 6
PRESENTATION