This is a translation of the Japanese original. The Japanese version is authoritative; figures follow Japanese tax law.
The national subsidy for high-efficiency water heaters such as EcoCute heat-pump water heaters, Kyuto Shoene 2026 (給湯省エネ2026事業, the national high-efficiency water heater subsidy), had used 48% of its ¥57 billion budget as of October 7. More than half the budget remains, but the deadline will not move. Reservation of the grant application closes November 16, and the grant application itself closes December 31. Both the construction work and the application must be finished within the year[official Kyuto Shoene 2026 website (in Japanese)].
The subsidy is ¥70,000 per EcoCute unit (¥100,000 with the performance bonus), plus up to ¥80,000 more for removing an electric water heater or storage heater. Tokyo adds up to ¥140,000 more through its own program. A unit that costs ¥400,000-600,000 installed can effectively cost 20-30% less within Tokyo.
The short answer: subsidy amounts at a glance — EcoCute gets ¥70,000-100,000, and the removal bonus adds up to ¥180,000
| Equipment | Base amount | Performance bonus | Maximum per unit |
|---|---|---|---|
| EcoCute (heat-pump water heater) | ¥70,000 | +¥30,000 | ¥100,000 |
| Hybrid water heater | ¥100,000 | +¥20,000 | ¥120,000 |
| Ene-Farm (home fuel cell) | ¥170,000 | None | ¥170,000 |
| Removal bonus (renovation only) | Amount | Cap |
|---|---|---|
| Removing an electric storage heater | ¥40,000/unit | Up to 2 units (¥80,000) |
| Removing an electric water heater | ¥20,000/unit | Up to the number of subsidized water heaters |
* The unit count is capped at 2 for detached houses and 1 for apartment buildings. The removal bonus applies only to removals from November 28, 2025 onward, and will end early if its ¥3.6 billion budget runs out first (24% used as of October 7). Removing an EcoCute itself does not qualify for the bonus[Grant Application Guide, Existing Homes Edition, July 24, 2026 version (in Japanese)].
The "up to ¥140,000" seen in contractor ads combines the ¥100,000 EcoCute subsidy with the ¥40,000 bonus for removing one storage heater. Removing two storage heaters brings the total to ¥180,000.
- Performance bonus conditions: in addition to the basic requirements (meeting the FY2025 energy-efficiency target and having a function that links to weather forecasts to heat water during the day), the unit must emit at least 5% less CO2. Look for the "Kyuto Shoene 2026 bonus-eligible" label in the catalog.
- Who qualifies: homeowners and their families, rental property owners, tenants, and management associations. Both new construction and renovation qualify.
- Not eligible: work where you buy the unit yourself and hire someone only for installation, used units, and construction that started on or before November 27, 2025.
Deadlines and remaining budget: November 16 looks set to arrive before the money runs out
- The contractor applies, not you. A registered "Kyuto Shoene provider" (installer, retailer, or leasing company) files the grant application, and you sign on as a co-applicant. Using an unregistered contractor means you cannot receive the subsidy.
- The reservation is a procedure the contractor uses to secure budget after signing the contract but before construction. Once reserved, you only need to finish construction and file the grant application by December 31.
- Construction gets busy at year-end. Some EcoCute models take several weeks to deliver, so signing a contract in October and getting the reservation in by November 16 is the realistic timeline.
- Units that already received a subsidy under the 2025 "Kyuto Shoene 2025" program are not eligible.
Combining with other subsidies: usable alongside Window Renovation and Mirai Eco Housing, with Tokyo adding up to ¥140,000
The national housing energy-efficiency campaign covers four programs: Mirai Eco Housing 2026 (successor to the former Child-Rearing Green Housing Support program), Advanced Window Renovation 2026, Kyuto Shoene 2026, and Kyuto Shoene 2026 for rental apartment buildings. As long as you do not apply twice for the same work, you can combine them within the same contract and construction schedule. If you are replacing both windows and a water heater, apply for the windows under Window Renovation and the water heater under Kyuto Shoene; a "one-stop application" lets you enter the paperwork once (renovation only).
- Homes that received a new-construction subsidy under Mirai Eco Housing 2026 cannot also use Kyuto Shoene.
- If a water heater subsidy was already received through a Mirai Eco Housing 2026 renovation, the Kyuto Shoene removal bonus cannot also be claimed.
- Municipal subsidies can be combined as long as they do not use national government funds.
| Municipal top-up (examples) | Amount | Status |
|---|---|---|
| Tokyo, "Effective Use of Heat and Electricity Promotion Program" | A solar-linked EcoCute that heats water during the day: ¥140,000/unit (¥50,000 for a 100%-renewable-energy contract, +¥50,000 for adding an energy-management device) | Accepting applications. Can be combined with the national subsidy[Tokyo, Clean Energy Partners Tokyo (in Japanese)] |
| Fukuoka City | High-efficiency water heater: ¥20,000 (flat rate) | Through January 29, 2027 (ends early if the budget runs out)[Fukuoka City (in Japanese)] |
| Saitama City | High-efficiency water heater (¥54 million budget) | Applications closed August 27, 2026[Saitama City (in Japanese)] |
National ¥100,000 + Tokyo ¥140,000 = ¥240,000 in subsidies
Your out-of-pocket cost is about ¥260,000. If you are replacing an electric water heater, the ¥20,000 removal bonus is added, bringing the out-of-pocket cost to about ¥240,000.
That's roughly a 50% subsidy rate. Tokyo's program has a smaller budget than the national one, though, so check application status first.
Window subsidies are covered in Inner Window Subsidy 2026, the full picture of housing energy-efficiency subsidies in Renovation Subsidies 2026, Summarized, and Tokyo's point program in Tokyo Zero Emission Points. Municipal programs can be searched by city or town name in our subsidy database.
Tax treatment: most of the subsidy falls within the tax-free range, but a water heater alone does not qualify for the energy-efficiency tax credit
- A subsidy an individual receives for their own home counts as occasional income (一時所得). With its annual ¥500,000 special deduction, even the national ¥100,000 plus Tokyo's ¥140,000 requires no tax filing as long as it stays within ¥500,000 combined with any other occasional income[National Tax Agency No.1490, "Occasional Income" (in Japanese)].
- The income-tax credit for energy-efficiency renovation (the renovation-promotion tax system) requires replacing the windows of a living room; replacing a water heater alone does not qualify. If done alongside window work, the construction cost minus the subsidy must exceed ¥500,000[National Tax Agency No.1219, "Special Deduction for Energy-Efficiency Renovation" (in Japanese)].
Will there be a 2027 program? METI is requesting ¥53 billion in its initial budget
The Ministry of Economy, Trade and Industry's FY2027 budget request includes ¥53 billion under the same program name. Unlike past rounds, which used supplementary budgets, this is a request in the initial budget — meaning the program would likely continue into FY2027 if approved. The subsidy amounts and start date are not yet decided, and won't be known until the year-end budget process[METI, "Outline of the FY2027 Budget Request" (in Japanese)].
A broken water heater won't wait. If yours is already failing, use this year's budget; if it's still working, it's fine to wait and see what the 2027 program looks like.
Summary
- Kyuto Shoene 2026's deadlines: reservation of the grant application closes November 16, and the grant application closes December 31. The ¥57 billion budget was 48% used as of October 7, so the deadline looks likely to arrive first.
- EcoCute pays ¥70,000 per unit, or ¥100,000 with the performance bonus. You can add ¥40,000 per storage heater removed (up to 2) or ¥20,000 per electric water heater removed.
- A registered Kyuto Shoene provider files the application. Sign a contract in October and get the reservation in.
- Can be combined with Window Renovation and Mirai Eco Housing 2026. Tokyo adds up to ¥140,000 for solar-linked units, for ¥240,000 combined with the national subsidy.
- The subsidy counts as occasional income, but no filing is needed within the ¥500,000 special deduction. A water heater alone does not qualify for the energy-efficiency renovation tax credit.
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Sources
- METI / Agency for Natural Resources and Energy, official Kyuto Shoene 2026 website (in Japanese) (program overview, in Japanese / eligible-equipment requirements, in Japanese)
- Same, "Grant Application Guide, Existing Homes, Individual and Batch Common Edition" (July 24, 2026 version, PDF, in Japanese)
- METI, "Outline of the FY2027 Budget Request" (PDF, in Japanese)
- Tokyo Metropolitan Center for Climate Change Actions, "Effective Use of Heat and Electricity Promotion Program (FY2026)" (in Japanese)
- Fukuoka City, "Residential Energy System Introduction Support" (in Japanese) / Saitama City, "Smart Home Promotion / Equipment Subsidy" (in Japanese)
- National Tax Agency No.1490, "Occasional Income" (in Japanese) / No.1219, "Energy-Efficiency Renovation (Special Tax Credit for Specified Home Renovation)" (in Japanese)
* The budget-usage rate is the figure published on the official website as of 0:00 on October 7, 2026, and is updated daily. Equipment prices are estimates based on figures published by retailers. This article is general information; confirm application eligibility with a registered provider and the official website, and individual tax questions with a tax office or tax accountant.