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Incentives and Financing

Thousands of dollars in incentives and special financing options are available to support clean heating and cooling installations. Learn more about the options available to you.

A variety of programs from the state and utilities are available to support clean heating and cooling installations. The table below summarizes each of the available programs, and we will be posting a more detailed guide on these options soon.

In some ways, the programs available can be more complicated than clean heating and cooling technologies are themselves! Rest assured that our installers have helped hundreds of customers through the steps needed and will work with you to make sure you have all of the information you need (and will submit whatever information on your behalf that they can!)

Incentives

Program Name Description
Mass Save: Electric Heating and Cooling Rebate Program

Eligible technologies: Air source heat pumps

Summary: Mass Save offers a range of rebates for air source heat pumps depending on the type of system you are installing and what heating fuel you are currently using.

  • If you heat with oil, electric resistance, or propane, you will see the largest rebates, ranging from $1,000-$1,600 per ton of capacity, depending on the fuel and whether you're installing a ducted or ductless system. If you heat with oil or propane, a set of controls to help your heat pump system work with your existing boiler or furnace (or removing your existing system entirely) will be necessary to receive the largest rebate.
  • If you heat with gas, you can still receive some rebates, though these rebates will range from $150-350 per ton of capacity.

No incentives from Mass Save are available for other clean heating and cooling technologies, though all four technologies can be financed under a 0% interest Mass Save HEAT Loan (see below for more information).

MassCEC Clean Heating and Cooling Program

Eligible technologies: Ground source heat pump, modern wood heating, and solar hot water (air source heat pump coming soon!)

Summary: The Massachusetts Clean Energy Center (MassCEC) offers thousands of dollars of rebates for three of the four clean heating and cooling technologies.

  • Ground source heat pumps receive $2,000 per ton of heating capacity (up to $10,000 per home), typically covering 15-20% of the total cost of a typical system.
  • Modern wood heating receive 40% of the cost of the system up to $10,000, with an extra $2,000 to cover the cost of thermal storage.
  • Solar hot water systems receive rebates based on their performance rating (from the Solar Rating & Certification Corporation) up to $3,500, typically covering approx. 25% of the total cost
  • Air source heat pumps (coming soon!) do not currently have a rebate available from MassCEC, though a new program designed for whole-home systems replacing gas heating is expected to be available this spring. Stay tuned for more information.

Each rebate differs slightly in requirements, when the rebate application must be submitted, and who may receive the rebate, though in all cases:

  • You will need to have completed a Mass Save Home Energy Assessment in the past four years (or that you commit to completing one within six months). Sign up for one today if you haven't already!
  • You can receive a larger rebate if you meet certain income eligibility (<80% or <120% of the state median income, click here for more information) or are representing a non-profit, government, or affordable housing project.
Massachusetts Dept. of Energy Resources: Alternative Energy Certificates

Eligible technologies: All clean heating and cooling technologies.

Any resident who installs a qualifying clean heating and cooling technology is eligible to receive and sell Alternative Energy Certificates (AECs), which are awarded to owners of clean heating & cooling technologies through the Commonwealth's Alternative Portfolio Standard. The number of certificates you receive will be based on a variety of criteria, including (for ASHP and GSHP) the size and efficiency of your home (e.g. if your home has a HERS rating of <50 or is a "Zero Energy" Home or Passive House) or (for modern wood heat) how much fuel you use. Depending on the technology, these factors—and the value of the AECs at quarterly auctions, you could receive the following:

  • ASHP (whole-home systems only): $1,200-$4,500 (upfront)
  • GSHP (whole-home systems only): $3,500-$11,000+ (upfront)
  • Modern Wood Heat: $90-$200 (every quarter with no limit)
  • Solar Hot Water: $1,200-$2,200+ (upfront)

An Excel calculator developed by the Dept. of Energy Resources is available here. Please note that a default AEC value of $20/MWh is assumed in this calculator. We would recommend using a more conservative estimate of $15/MWh or lower to represent a lower auction value of these AECs and deducting the costs needed for selling your certificates to state utilities through an aggregator of ~7-10%

Federal Investment Tax Credit

Eligible technologies: Ground source heat pump or solar hot water

Homeowners can claim a federal tax credit of up to 30% of the cost of a solar hot water or ground source heat pump system (excluding cost of ductwork modifications). The tax credit which is similar to that offered for solar electricity will decline to 26% in 2020 and every year after that until disappearing entirely in 2022. If you are unable to claim the full credit in a year, you may roll it over into a future year while the credit is still available.

Consult a tax professional if you have any questions or concerns.

State Personal Income Tax Credit and Property Tax Exemption

Eligible technologies: Solar hot water

Homeowners can claim a state tax credit of 15% of the cost of a solar hot water system up to $1,000.

Additionally, 100% of the added value of a solar hot water system is exempted from your local property taxes for up to 20 years.

 

Financing

Program Name Description
Mass Save HEAT Loan

Eligible technologies: All clean heating and cooling technologies

Clean heating and cooling technologies can be financed by the Mass Save HEAT Loan, which is offered at a maximum of $25,000 at 0% interest for terms of up to 7 years through over 90 banks and credit unions. Learn more about the HEAT Loan and participating lenders here.

  • You may finance any number of eligible energy improvements—including air sealing, insulation, hot water upgrades, and more—on a single HEAT Loan.
  • You may only receive one HEAT Loan regardless of how many Home Energy Assessments or energy improvements you are seeking to make. Try to combine as many home energy improvement measures onto one loan if possible!
  • To receive a HEAT Loan, you will need to have received a Home Energy Assessment within the last two years.

Note: While all technologies are eligible, certain configurations or equipment models may be ineligible for the HEAT Loan. Speak to your installer if you have any questions or concerns.