Starting in 2023, the financial incentives for installing heat pumps are significantly higher than incentives in 2022.
There are new federal tax credits (including some for electrical upgrades) and increased Mass Save 0% interest loan limits. Plus, the federal Inflation Recovery Act established a framework for new rebates for low- to moderate-income households (households making under 150% of the Area Median Income).
These rebates, known as the HOMES and HEEHRA Acts, will be managed by the states, The management details are being developed. The rollout of these incentives will likely occur in late 2023.
A summary of heat pump incentives for 2023 are in the table below. The programs that are not yet available are shaded in gray. Mass Save rebates have not changed and continue to offer thousands of dollars for each project.
For more information about heat pumps, please visit the HeatSmart Newton Website at heatsmart.greennewton.org or if you have specific questions, contact the HeatSmart Newton Coach at HeatSmartNewton@gmail.com.
2023 Air Source Heat Pump Incentives
| Mass Save Rebate | Mass Save Heat Loan | Federal Tax Credit | Federal HOMES Rebate | Income Based Federal HEEHRA Rebate |
|---|---|---|---|---|
| Whole Home Rebate: $10,000 | 0% interest loan up to $50,000 for 7 years | 30% of project cost up to $2000 | Based on Measured or Modeled energy savings | <80% of AMI*: Rebate of 100% of cost up to $8000 |
| Partial Home Rebate: $1,250 per ton of cooling capacity | 80-150% of AMI*: Rebate of 50% of cost up to $8000 | |||
| >150% of AMI*: No Rebate | ||||
| *AMI = Area Median Income; For family of two in greater Boston AMI = $112,000, see savings calculator at https://www.rewiringamerica.org/app/ira-calculator |
2023 Heat Pump Water Heater Incentives
| Mass Save Rebate | Mass Save Heat Loan | Federal Tax Credit | Federal HOMES Rebate | Income Based Federal HEEHRA Rebate |
|---|---|---|---|---|
| $750 Instant Discount when installed by a licensed plumber | 0% interest loan up to $50,000 for 7 years | 30% of project cost up to $2000 | Based on Measured or Modeled energy savings | <80% of AMI: Rebate of 100% of cost up to $1750 |
| 80-150% of AMI: Rebate of 50% of cost up to $1750 | ||||
| >150% of AMI: No Rebate |
2023 Electrical and Panel Upgrade Incentives
| Mass Save Rebate | Mass Save Heat Loan | Federal Tax Credit | Federal HOMES Rebate | Income Based Federal HEEHRA Rebate |
|---|---|---|---|---|
| None | None | 30% of project cost up to $600 | None | <80% of AMI: Rebate of 100% of cost up to $6500 |
| 80-150% of AMI: Rebate of 50% of cost up to $6500 | ||||
| >150% of AMI: No Rebate |
Mass Save rebates for Air Source Heat Pumps: https://www.masssave.com/residential/rebates-and-incentives/air-source-heat-pumps
Mass Save rebates for Heat Pump Water Heaters: https://www.masssave.com/en/residential/rebates-and-incentives/heat-pump-water-heaters
Mass Save Heat Loans: https://www.masssave.com/residential/rebates-and-incentives/heat-loan-program
Heat Pump Tax Credits: https://www.energystar.gov/about/federal_tax_credits/air_source_heat_pumps
Electrical Panel Tax Credits: https://www.energystar.gov/about/federal_tax_credits/electric_panel_upgrade
Income Based Federal HEEHRA Rebate: https://www.rewiringamerica.org/policy/high-efficiency-electric-home-rebate-act
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