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 RebateMass Save Heat LoanFederal Tax CreditFederal HOMES RebateIncome Based Federal HEEHRA Rebate
Whole Home Rebate: $10,0000% interest loan up to $50,000 for 7 years30% of project cost up to $2000Based 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 capacity80-150% 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 RebateMass Save Heat LoanFederal Tax CreditFederal HOMES RebateIncome Based Federal HEEHRA Rebate
$750 Instant Discount when installed by a licensed plumber0% interest loan up to $50,000 for 7 years30% of project cost up to $2000Based 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 RebateMass Save Heat LoanFederal Tax CreditFederal HOMES RebateIncome Based Federal HEEHRA Rebate
NoneNone30% of project cost up to $600None<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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