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ARIZONA

Arizona Water Heater
Replacement

Licensing, rebates, running costs and local guides for 31 Arizona communities.

Local guides in Arizona

Phoenix area

PlacePermit to replaceFeeElectricCompanies
PhoenixNot required (conditions apply)—Salt River Project, APS17
MesaNot required (conditions apply)—Salt River Project (SRP), City of Mesa Electric17
GilbertNot required (conditions apply)$150Salt River Project (SRP), Arizona Public Service (APS)17
ChandlerNot required (conditions apply)—Salt River Project (SRP), Arizona Public Service (APS)17
GlendaleRequired$29.79APS, SRP14
ScottsdaleRequired$63Arizona Public Service (APS), Salt River Project (SRP)17
PeoriaNot required (conditions apply)$87APS, SRP14
TempeNot required (conditions apply)—Salt River Project (SRP), Arizona Public Service (APS)17
SurpriseNot required (conditions apply)$100APS14
San Tan ValleyNot required (conditions apply) (county)$42Salt River Project (SRP), Arizona Public Service (APS)8
GoodyearNot required (conditions apply)—APS11
BuckeyeNot required (conditions apply)—APS10
AvondaleRequired$96APS, SRP11
Queen CreekNot required (conditions apply)—Salt River Project (SRP)10
MaricopaRequired$56Electrical District No. 3 (ED3)4
Casa GrandeCheck with city$60APS6
Apache JunctionNot required (conditions apply)$100Salt River Project (SRP)8
Sun CityNot required (conditions apply) (county)—APS12
El MirageRequiredBy job value (from $75)APS7
Sun City WestNot required (conditions apply) (county)—APS9
FlorenceRequired—APS3
Fountain HillsRequired$140Salt River Project (SRP)13
EloyRequired$50APS, Electrical District No. 4 (ED4)3
CoolidgeRequired$22APS, Electrical District No. 2 (ED2), San Carlos Irrigation Project (BIA), Hohokam4
Sun LakesNot required (conditions apply) (county)—Salt River Project (SRP)5
Paradise ValleyRequired$145Arizona Public Service (APS), Salt River Project (SRP)14

Tucson area

PlacePermit to replaceFeeElectricCompanies
TucsonRequired$118.51Tucson Electric Power (TEP)12
Casas AdobesRequired (county)$69Tucson Electric Power (TEP)5
MaranaRequired—Tucson Electric Power (TEP), Trico Electric Cooperative11
Oro ValleyRequired$35.80Tucson Electric Power (TEP)11
SahuaritaRequired$120Tucson Electric Power (TEP), Trico Electric Cooperative9

Licensing in Arizona

Residential plumbing work falls under Arizona Registrar of Contractors classifications such as R-37, R-37R and CR-37. A general residential (B) contractor must subcontract plumbing, and new electrical circuits need an electrical classification such as R-11.

Hiring a licensed residential contractor can make an owner-occupant eligible for the ROC Residential Contractors’ Recovery Fund, up to $30,000 per residence. Payment isn’t guaranteed and strict steps apply.

Arizona ROC contractor search ↗ · ROC license classifications ↗ · ROC Recovery Fund ↗

Rebates and credits in Arizona

Efficiency Arizona

Arizona Governor’s Office of Resiliency · Income-qualified

Up to $1,750 toward a heat pump water heater for households at or below 150% of area median income.

For reservations from September 1, 2026, only replacements of existing electric water heaters qualify; gas-to-electric switching is no longer covered.

Program details ↗

SRP heat pump water heater rebate

Salt River Project · Through April 30, 2027

$500 for an ENERGY STAR heat pump water heater (UEF 2.8 or higher) that replaces an existing water heater.

Installed by an ROC-licensed residential plumbing contractor. Apply within six months of installation; one rebate per home every 10 years.

Program details ↗

Efficient Home Water Heating – Heat Pump Water Heater Rebate

Tucson Electric Power (TEP) · Active

$400 bill credit for buying and installing an ENERGY STAR heat pump water heater with a wireless, programmable timer/controller.

TEP residential customer; bought and installed during the 2024–2026 program period; one rebate per account per period; installed by a licensed installer with a permit; controller must be on Wi-Fi and programmed not to run 3–7 p.m.; TEP may inspect the home; subject to funding.

Program details ↗

Federal Energy Efficient Home Improvement Credit (25C)

IRS · Ended

Covered improvements made through December 31, 2025. Not available for 2026 installations.

Program details ↗

Checked September 29, 2026. Utility rebates are only for that utility’s customers. Each city guide shows the rebates for its utilities.

What it costs to run in Arizona

Estimated yearly energy cost at Arizona’s average residential prices: 15.44¢ per kWh (year to date through July 2026) and $18.58 per thousand cubic feet of gas (2025 annual average).

Estimated yearly energy cost by water heater type in Arizona
TypeEfficiency (UEF)Energy per yearEst. cost per year
Gas storage tank0.64174 therms$313
Gas tankless0.93120 therms$215
Electric storage tank0.923,556 kWh$549
Heat-pump tank3.5935 kWh$144

Assumes the Department of Energy’s medium-use test: 55 gallons a day heated 67°F, and typical efficiency ratings for each type. Colder incoming water, larger households and your utility’s actual rates change the result. Sources: EIA Electric Power Monthly, Table 5.6.B ↗ · EIA Natural Gas Prices, residential ↗ · ENERGY STAR test conditions ↗.