Missoula County approves amendment to expand heat pump water heater rebate

Missoula County commissioners on May 6 approved an amendment to their interlocal agreement with the City of Missoula to extend and expand a joint heat pump water heater rebate program, county staff said.

The amendment extends the program for up to two years, increases the rebate available to eligible residents to $1,435, and adds $45,920 in earmarked federal Department of Energy grant funds to support the program, Shane, a Missoula County climate-action staff member, told commissioners.

Shane said the county and city have run the rebate program since 2023 with funding from the Montana Department of Environmental Quality and that roughly 50 rebates have been distributed to date. "Heat pump water heaters are a good technology that often save people hundreds of dollars a year on their power bills," Shane said. He told the commission recipients who completed a follow-up survey rated their appliance on average 4.65 out of 5 and rated the rebate program even higher.

Under the amendment, the DOE grant funds are earmarked exclusively for the expanded rebate and must be expended by June 2026, Shane said. The city grant is reimbursable, meaning the City of Missoula will expend funds and then seek reimbursement from the Department of Energy on a month-by-month basis, Commissioner Strohmeyer asked. "Is this a reimbursable grant?" Strohmeyer said. Shane answered that the grant is reimbursable and that, as with any reimbursable federal funding, there is a risk the grant could be canceled before funds are fully spent.

Shane described how residents apply: they may pre-apply to confirm available funds, or apply after installation by submitting a receipt, a proof-of-installation photo, and the required building or plumbing permit. The county's lands and communities administrative staff will manage the rebate and issue payment after verification, Shane said.

Shane provided typical cost ranges discussed by applicants: the water heaters themselves commonly range from about $1,500 to $2,000, and contractor installation costs have varied from roughly $3,000 to $7,000 depending on home conditions. With the increased rebate, the county expects the assistance will cover a substantial portion of the equipment cost for many households.

Commissioners voted to approve the amendment. The item is also scheduled for City of Missoula Council consideration on May 12, Shane said; the council must also approve their amendment for the expanded rebate to proceed.

The commission did not provide a roll-call vote tally in the transcript; the chair called for the question and commissioners responded "Aye."