Bay Area Zero-NOx Rules for Water Heaters and Furnaces (Rules 9-6 and 9-4)

Zero-NOx Dates at a Glance (October 27, 2026)

The dates apply to equipment manufactured after each date, at the point of sale or replacement. “Proposed” dates are what the Air District Board votes on November 4, 2026. They aren’t in effect.

Mobile home water heaters and furnaces are exempt. Propane equipment isn’t covered. Sources are listed at the end of this page.

What Do Rules 9-6 and 9-4 Mean for San Jose Homeowners?

Both rules set limits on nitrogen oxides (NOx), the pollutant gas burners release, for appliances sold or installed in the Bay Area. The Air District adopted the zero-NOx amendments in March 2023. Its jurisdiction covers nine counties, including all of Santa Clara County, so the dates are the same in San Jose, Santa Clara, Sunnyvale, Palo Alto and every other South Bay city.

What the rules do and don’t require:

• No early replacement. The Air District says there’s no mandate to remove or replace a working water heater or furnace before it fails. The rules apply only to equipment newly purchased or installed after the compliance dates.
• Replacements after the date must be zero NOx. In the District’s words, if an appliance fails and needs to be replaced after the compliance date, the replacement must be zero NOx.
• Electric is the only option today. The rules don’t name a technology, but the District says the only commercially available appliances that meet zero NOx are electric, typically heat pumps. A gas appliance that met the standard would be allowed.
• Only water heaters and furnaces. Gas stoves, ovens, dryers and fireplaces aren’t covered.
• Mobile homes are exempt, and propane appliances aren’t affected.

Does the Rule Cover Tankless Water Heaters?

Yes, but in the larger tier. The Air District puts instantaneous (tankless) units with the water heaters above 75,000 BTU/hr, which have an adopted date of January 1, 2031. The amendments up for a vote would move that tier to January 1, 2033. See tankless water heaters.

What Does Rule 9-4 Mean for My Furnace?

Fan-type home furnaces made after January 1, 2024 already have to meet an ultra-low NOx limit, which gas models can meet. The zero-NOx step for residential and commercial furnaces comes on January 1, 2029, and the November 2026 vote doesn’t change it. The Air District says it will complete a cost and technology assessment for furnaces before the 2029 date. If your furnace is aging, a heat pump is the usual zero-NOx replacement, and it cools as well. See our furnace service for repair options in the meantime.

The November 4, 2026 Board Vote on Rule 9-6

The vote hasn’t happened yet. The Air District Board of Directors holds a public hearing on proposed amendments to Rule 9-6 on Wednesday, November 4, 2026, at 9:00 a.m., in the Board Room at 375 Beale Street, San Francisco, and on Zoom. Written public comments close November 1 at 6 p.m. through the Air District’s online comment tool (or by mail); the District doesn’t accept comments on regulations by email. Verbal comments are welcome up to and during the hearing.

If the Board doesn’t adopt the amendments, the existing rule stays in place without the exemptions, and the January 1, 2027 date stands. We’ll update this page after the vote.

What Dates Are Proposed?

• January 1, 2028 for gas tank water heaters over 30 gallons and rated 75,000 BTU/hr or less, one year later than the adopted date. The District says the extra year is for setting up the exemption system and reaching retailers, contractors and the public.
• January 1, 2033 for water heaters and boilers over 75,000 BTU/hr up to 2 million BTU/hr, including tankless, instead of 2031.
• Tanks of 30 gallons or less would keep today’s low-NOx limit, because the staff report says no zero-NOx models that small are on the U.S. market.

The staff report also discusses a January 1, 2029 alternative for the small-tank date. Staff doesn’t recommend going beyond 2029.

Who Could Get an Exemption Certificate?

Under the proposal, the Air District would issue exemption certificates through a mobile-friendly website, and a certificate must be in hand before installation. A certificate lets you or your contractor buy and install a gas water heater that doesn’t meet the zero-NOx standard. The proposed categories:

• Low-income property owners: household income at or below 80% of Area Median Income, or enrollment in a qualifying assistance program such as Medi-Cal, CalFresh/SNAP, Covered California, an energy rate assistance program or SSI. This exemption can be used again at a later replacement.
• Housing cost-burdened owners: mortgage and property tax payments of 28% or more of gross household income, by self-attestation.
• One-time exemptions for existing buildings (one per address, not for new construction):
  • a water heater in an enclosed space under 700 cubic feet that can’t be modified for ventilation;
  • a garage ceiling under 7.2 feet, or another indoor ceiling under 6 feet;
  • electrical constraints certified by a licensed contractor: service under 100 amps, no breaker space in the panel, a new 240-volt connection that would need more than 50 feet of conduit, or knob-and-tube wiring with the same 50-foot limit.
• Time-limited exemptions for units made before 2033: hydronic heating systems, buildings with five or more units, deed-restricted affordable housing, nonprofit housing cooperatives and businesses that need water at 160°F or hotter.

Owners can self-certify for the low-income and space exemptions. The electrical exemptions need a contractor.

What Is a Temporary Gas Replacement?

When a gas water heater fails and a compliant one can’t be installed right away, the proposal lets a licensed contractor install a temporary gas water heater, with a certificate obtained before installation. Within 12 months, the temporary unit must be removed or made permanent under one of the exemptions, and the contractor reports it to the Air District. The idea is that nobody goes without hot water while a circuit or panel is being arranged.

How Do Heat Pump Water Heaters and Heat Pumps Fit In?

Because only electric equipment meets zero NOx today, the rules point most replacements toward heat pumps:

• Heat pump water heaters replace a gas tank. A typical installation in San Jose costs $2,500 to $6,000 or more, compared with $1,500 to $4,500 or more for a gas tank. The Air District says a 2024 staff report, based on thousands of Bay Area installations, found average additional costs under $2,000 for zero-NOx water heaters, though some cost more. Many newer models plug into a standard 120-volt outlet, which can avoid a new circuit. See heat pump water heater installation and the heat pump water heater cost guide.
• Heat pumps replace a gas furnace and the air conditioner with one system. A ducted system typically costs $8,000 to $25,000 in San Jose, and a single-zone ductless mini-split $3,000 to $8,000. See heat pump installation and the heat pump installation cost guide.

The best time to plan is before the old unit fails. A heat pump water heater may need a circuit, a condensate drain and enough air around it, and those are easier to arrange on your schedule than on the day the tank leaks.

Which Rebates Help With the Switch?

The Air District points homeowners to incentive listings at The Switch Is On. In the South Bay, the money comes mainly from your electric provider. Amounts as of October 2026, for equipment that replaces gas:

Standard amounts from each program’s published rules, checked October 27, 2026. Programs change their terms and some want a reservation before installation. See rebates by city for the conditions. Federal tax credits for heat pumps ended for installations after 2025.

What Permits Does the Switch Need in San Jose?

The City of San José requires a plumbing permit for every water heater installation or replacement, and a heat pump water heater needs an electrical permit as well. For a single-family home or duplex, the permits can usually be issued online through SJPermits. The City’s published requirements for heat pump water heaters include:

• Location: models meeting NEEA’s Advanced Water Heater Specification Tier 3 or higher may go in a garage, basement or other conditioned space.
• Room size: at least 700 cubic feet (10 × 10 × 7 feet), or a door with a louvered panel of at least 2 × 3 feet so air can pass freely.
• Condensate: drained to an approved plumbing fixture or a drywell.
• Electrical panel: upgraded if it can’t carry the added load.
• Earthquake straps: two straps on a tank up to 52 gallons, more on larger tanks, as for any water heater.

The 700-cubic-foot figure is also the threshold in the Air District’s proposed ventilation exemption. Other South Bay cities run their own permit counters; we pull the permits for every water heater and heat pump installation we do.

What Should You Do Now?

• If your water heater or furnace works, keep it and plan ahead. Note its age and fuel, and where your electrical panel is.
• If it’s 10 years old or more, get a price on a heat pump replacement now, and check whether your electric provider wants a rebate reservation before work starts.
• If it fails, call us. We offer same-day service and can talk through a heat pump replacement or, while the rules allow it, a like-for-like gas unit.

CPI Service installs heat pump water heaters and heat pumps across San Jose and the South Bay. Every job is quoted as a fixed price before we start. Request a free estimate or call (408) 978-3093.

Sources

• Bay Area Air District: Building Appliances (rule development, updated 10/26/2026)
• Bay Area Air District: Building Appliances Rule Implementation
• Notice of Public Hearing, Rule 9-6 (October 2, 2026)
• Preliminary Staff Report, Proposed Amendments to Rule 9-6 (October 2026)
• Proposed Rule 9-6 language (October 2026)
• Water Heater Rule Amendments Overview (October 2026)
• Myths vs. Facts: Understanding the Bay Area’s Building Appliance Rules
• FAQ About Air District Appliance Rules (July 2026)
• City of San José: Water Heaters (permits and requirements)
• The Switch Is On: Incentive Finder

Checked October 2026.