Palo Alto homeowners could receive more time and additional exemptions under proposed changes to regional water heater emissions standards.

The Bay Area Air Quality Management District board is scheduled to consider amendments Wednesday, Nov. 4, to Rule 9-6, which governs nitrogen oxide emissions from gas-fired water heaters. The meeting agenda lists a 9 a.m. session at Bay Area Metro Center in San Francisco.

The proposal would move the zero-nitrogen-oxide manufacturing cutoff for many covered residential water heaters from Jan. 1, 2027, to Jan. 1, 2028. The standards were adopted in March 2023.

Staff estimate that proposed exemptions and continued sales of small-capacity units could cover approximately half of water heater installations, according to the board presentation.

The rule governs sales and installations of covered equipment, with compliance tied to its manufacture date. It does not require homeowners to remove functioning water heaters.

Who could qualify

The proposed exemption framework, detailed in the agenda packet, creates pathways for property owners facing economic, space or electrical barriers.

Property owners participating in specified assistance programs, including qualifying Medi-Cal and CalFresh programs, could qualify. Owners with household income at or below 80% of area median income would also qualify.

Owners whose mortgage and property taxes equal at least 28% of annual gross household income could qualify through the housing cost-burdened exemption.

One-time exemptions for existing buildings would cover specified electrical and space barriers. These include certain installations requiring more than 50 feet of new 240-volt conduit, insufficient electrical capacity or limited installation space.

An enclosure smaller than 700 cubic feet would qualify only if it also could not accommodate the ventilation improvements specified in the rule.

Applicants would need an exemption certificate before installation. The proposed process relies on self-attestation, with contractor certification required for electrical constraints.

The proposal would also allow continued sales of small-capacity gas water heaters.

Compliance timeline

For many covered residential water heaters, the proposed manufacturing cutoff is Jan. 1, 2028, pushed back one year from the original 2027 deadline.

The cutoff for larger covered equipment would move from 2031 to 2033. Separate provisions would extend timelines to 2033 for qualifying installations in buildings with five or more dwelling units, deed-restricted affordable housing and certain other properties.

Gregory Nudd, the district’s deputy executive officer for policy, is scheduled to present the item to the board, which is chaired by Lynda Hopkins.

Cost and local assistance

District staff analyzed more than 4,000 Bay Area installations and estimated average upfront costs of $3,575 for a gas-to-gas replacement and $7,071 for a heat-pump water heater. Actual costs depend on the project and available incentives.

Palo Alto residents can check eligibility for home electrification rebates through the city’s Rebate Hub.

The city also offers water heater replacement assistance, including emergency service. Residents can call 650-713-3411 to confirm current pricing and installation timing.

The Nov. 4 meeting is open to the public in person at 375 Beale St., San Francisco, and through Zoom.

If the board does not approve the amendments, the existing standards would remain, including the 2027 manufacturing cutoff for covered smaller equipment, without the proposed affordability and installation-barrier exemptions.