Massachusetts Heat Pump Rebates 2026: What's Actually Available
There are no federal heat pump tax credits in 2026. Massachusetts homeowners now rely almost entirely on Mass Save rebates — which are still among the highest in the country, but more complex than ever.
Last updated: March 17, 2026
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Massachusetts heat pump rebates remain among the strongest in the country through Mass Save, even after federal tax credits (25C/25D) ended December 31, 2025. Whole-home air-source rebates up to $8,500, ground-source up to $13,500, and income-qualified households can receive up to $25,000 or no-cost installations. 0% HEAT Loan financing up to $25,000 is available. HEAR rebates are authorized but not yet live for individual homeowners.
Sources:
Bottom line: Strong incentives remain — but only through Mass Save. Act sooner rather than later; rebates are trending down annually.
What You Can Actually Get in 2026
Mass Save — the statewide program funded by Eversource, National Grid, Cape Light Compact, Unitil, Berkshire Gas, and Liberty Utilities — offers three tiers of air-source heat pump rebates in 2026. All systems must be ENERGY STAR Cold Climate certified, appear on the Mass Save Qualified Products List, and use next-generation refrigerants (R-32 or R-454B). R-410A systems are no longer eligible as of January 1, 2026.
Air-Source Heat Pump Rebates
| Tier | Per-Ton Rebate | Per-Home Cap | Key Requirement |
|---|---|---|---|
| Whole-home | $2,650/ton | $8,500 | Remove/disconnect fossil fuel system; home must be sufficiently weatherized |
| Partial-home | $1,125/ton | $8,500 | Integrated controls from QPL; fossil fuel backup switches at ≤30°F (gas/oil) or ≤5°F (propane) |
| Basic | $250/ton | $2,500 | Replacing existing heat pump, additions under 500 sq ft, or previously unconditioned spaces |
Partial-home installations can earn two additional bonuses: a $500 sizing bonus when sized via ACCA Manual J to meet 90–120% of total heating load, and a $500 weatherization bonus when recommended insulation and air sealing are completed within 12 months.
Rebates are declining. Whole-home dropped from $3,000/ton (cap $10,000) in 2025 to $2,650/ton (cap $8,500) in 2026. Industry sources project further reductions to approximately $2,500/ton in 2027. Earlier action means higher savings.
Ground-Source & Water Heating
| Equipment | Rebate | Notes |
|---|---|---|
| Ground-source HP (whole-home) | $13,500 flat | Down from $15,000 in 2025 |
| Ground-source HP (partial) | $2,000/ton (cap $13,500) | Cape Light Compact cap is $15,000 |
| Heat pump water heater | $750 instant | Point-of-sale via participating retailers — no mail-in claim |
Federal Tax Credits Are Gone — Mass Save Is the Entire Game Now
The federal incentive landscape changed dramatically on July 4, 2025 when the One Big Beautiful Bill Act (OBBBA) was signed into law. The IRS states that both residential energy tax credits are terminated for property placed in service after December 31, 2025:
Section 25C — Energy Efficient Home Improvement Credit: Previously provided 30% up to $2,000/year for heat pumps and heat pump water heaters. Filed on IRS Form 5695, Part II. Terminated. No extension or replacement legislation has been proposed.
Section 25D — Residential Clean Energy Credit: Previously provided 30% with no dollar cap for geothermal installations. Unused credits could be carried forward. Terminated. Taxpayers who completed qualifying geothermal installations before the deadline may still carry forward unused credit amounts.
Many websites still incorrectly claim these credits are available through 2032. The IRS confirmed the expiration in FAQ document IR-2025-86.
Income-Qualified: The Real Opportunity
Mass Save's enhanced incentive programs dramatically increase rebate values for lower-income households. A family of four earning $132,764 or less may qualify. Households enrolled in SNAP, MassHealth, LIHEAP, or fuel assistance may auto-qualify without income documentation.
| Equipment | Standard | Income-Qualified |
|---|---|---|
| Air-source HP (whole/partial) | Up to $8,500 | Up to $16,000 |
| Air-source HP (lowest income, turnkey) | N/A | Up to no cost |
| Ground-source HP | $13,500 | Up to $25,000 |
| Weatherization | 75% off | No-cost (100%) |
| Electrical panel upgrades | Not covered | Up to 100% covered |
For the lowest-income households, Mass Save offers a fully managed turnkey program: no-cost weatherization, no-cost air-source heat pump installation, electrical panel upgrades covered at 100%, and end-to-end project management.
Check eligibility: Mass Save Enhanced Incentives
Hidden Perks Most People Miss
Seasonal Heat Pump Electric Rate (~$540/Winter)
Since November 2025, Eversource, National Grid, and Unitil offer reduced distribution and transmission charges for heat pump households from November 1 through April 30. The DPU estimates average savings of approximately $540 per winter. Over 100,000 customers were auto-enrolled — those who installed heat pumps through Mass Save since January 2019. A Switchbox/Acadia Center analysis found that under these rates, 64% of Massachusetts households would save money by switching to a heat pump.
0% HEAT Loan — Up to $25,000
The HEAT Loan covers costs remaining after rebates at 0% APR. Terms are income-tiered: 7 years for households at or below 135% of state median income, 5 years for 135–300% SMI, and 3 years above 300% SMI. Additional financing includes the Massachusetts Community Climate Bank's Energy Saver Home Loan (0.5–2% interest, up to $100,000, 20-year terms, for households up to 135% AMI).
Source: Mass Save — Financing
Sales Tax Exemption (6.25%)
Heat pump equipment is exempt from the 6.25% Massachusetts sales tax under MGL 64H.6(dd). This is applied at the point of purchase and stacks with all other incentives.
Alternative Energy Credits (AECs)
Earned through the DOER's Alternative Energy Portfolio Standard and pre-minted for 10 years upfront. Current market value is modest — approximately $300–$500 for an air-source heat pump and $900–$1,200 for a ground-source system. The application is complex; DOER recommends working through an AEC aggregator.
What You Can Stack (and What You Can't)
✅ Can Combine
- Mass Save rebate + HEAT Loan (0% financing)
- Mass Save rebate + Alternative Energy Credits
- Mass Save rebate + sales tax exemption (6.25%)
- Mass Save rebate + Energy Saver Home Loan
- Mass Save rebate + seasonal electric rate
- Mass Save rebate + HEAR (when launched, income-eligible only)
❌ Cannot Combine
- Multiple Mass Save rebate types on the same equipment
- Federal tax credits (25C/25D — no longer available)
- HEAR + HOMES on the same measure
HEAR Rebates: Authorized But Not Yet Live
⚠️ Status as of March 17, 2026
Massachusetts was allocated $145.9 million in IRA funding ($73.2M for HOMES, $72.8M for HEAR). DOER is integrating HEAR directly into Mass Save's existing income-eligible programs — there will be no separate application process. However, the program has not yet fully launched for individual homeowner applications. HEAR could provide up to $8,000 per household for heat pumps for households at or below 80% of area median income.
The HOMES allocation is split between a Municipal Light Plant program (~$25M for 50 communities not covered by Mass Save) and an Affordable Housing Decarbonization Grant Program (~$45M for deed-restricted affordable rental housing).
How to Apply for Mass Save Heat Pump Rebates
- 1Confirm eligibility — use the online pre-verification tool at masssave.com.
- 2Schedule a no-cost Home Energy Assessment — call 866-527-7283. Whole-home rebates require the home to be sufficiently weatherized (built after 2000, or past weatherization completed, or less than $1,000 in remaining weatherization needs).
- 3Find a qualifying contractor — through the Heat Pump Installer Network (HPIN).
- 4Purchase and install eligible equipment between January 1 and December 31, 2026.
- 5Submit the rebate form online or by mail with required documentation by February 28, 2027.
What to Watch (2026–2027)
HEAR launch: When DOER finalizes DOE approval and fully launches HEAR through Mass Save, income-eligible households will gain access to an additional $8,000 in federal point-of-sale rebates.
Rebates trending down: Whole-home dropped from $3,000/ton in 2025 to $2,650/ton in 2026, with ~$2,500/ton projected for 2027. The window for maximum incentive value continues to narrow.
Budget pressure: The DPU cut the 2025–2027 Mass Save plan by $500 million (from $5B to $4.5B), with the entire reduction coming from the residential program.
Clean Heat Standard delayed: Originally set for 2026, now postponed to no earlier than 2028. Would have required heating fuel suppliers to earn clean heat credits.
Seasonal rate impact: The first full winter of discounted electric rates (2025–2026) will provide real-world data on heat pump operating cost savings in Massachusetts.
Utilities: Same Base Rebates, Some Differences
All four major utility program administrators deliver Mass Save rebates at identical standard amounts. There are no utility-specific add-on rebates beyond the Mass Save framework. Key differences:
Eversource — largest territory. Offers up-front barrier mitigation incentives up to $7,000 for issues like knob-and-tube wiring removal or vermiculite abatement.
National Grid — second-largest utility. Standard Mass Save rebates, no unique add-on programs.
Cape Light Compact (Cape Cod and Martha's Vineyard) — slightly more generous income-qualified offerings: 80% of installed cost for moderate-income and 100% for income-eligible customers. Ground-source partial-home cap is $15,000 vs. $13,500 elsewhere.
Unitil — north-central Massachusetts. Standard Mass Save rebates, no unique programs.
Frequently Asked Questions
Are there federal heat pump tax credits in Massachusetts in 2026?
No. The IRS states that the Section 25C Energy Efficient Home Improvement Credit and the Section 25D Residential Clean Energy Credit apply only to qualifying property placed in service through December 31, 2025. The One Big Beautiful Bill Act (OBBBA) terminated both credits years ahead of schedule. Massachusetts homeowners installing heat pumps in 2026 should not plan on any federal tax credits.
How much can I get from Mass Save for a heat pump in 2026?
Mass Save offers up to $8,500 for a whole-home air-source heat pump installation ($2,650 per ton), up to $13,500 for a ground-source (geothermal) system, and $750 for a heat pump water heater. Income-qualified households can receive up to $16,000–$25,000, and the lowest-income households may qualify for no-cost installation.
What is the Mass Save HEAT Loan?
The HEAT Loan provides 0% APR financing up to $25,000 to cover costs remaining after rebates. Repayment terms are income-tiered: 7 years at or below 135% state median income, 5 years for 135–300% SMI, and 3 years above 300% SMI. The loan is available through participating lenders and can be combined with Mass Save rebates.
Are HEAR rebates available in Massachusetts?
Not yet for individual homeowners. Massachusetts was allocated $145.9 million in IRA HEAR/HOMES funding. The Department of Energy Resources (DOER) is integrating HEAR into Mass Save's existing income-eligible programs, but the program has not launched for standard homeowner applications as of March 2026. Check masssave.com for updates.
Can I combine Mass Save rebates with other incentives?
Yes. Mass Save rebates can be combined with the HEAT Loan (0% financing), Alternative Energy Credits (AECs), and the Massachusetts sales tax exemption on heat pump equipment. You cannot combine multiple Mass Save rebate types on the same piece of equipment. Federal tax credits are no longer available to stack.
What is the seasonal heat pump electric rate in Massachusetts?
Since November 2025, Eversource, National Grid, and Unitil offer reduced distribution and transmission charges for heat pump households from November 1 through April 30 each year. The DPU estimates average savings of approximately $540 per winter. Customers who installed heat pumps through Mass Save since January 2019 were auto-enrolled.
Do I need to remove my old heating system to get the full rebate?
For the highest whole-home rebate ($2,650/ton), yes — you must remove or disconnect your fossil fuel heating system and the home must be sufficiently weatherized. The partial-home tier ($1,125/ton) allows you to keep a fossil fuel backup system with integrated controls. The basic tier ($250/ton) applies to simpler installations like replacing an existing heat pump.
Sources
- Mass Save — Air Source Heat Pumps
- Mass Save — Ground Source Heat Pumps
- Mass Save — Heat Pump Water Heaters
- Mass Save — Enhanced Income-Based Rebates
- Mass Save — HEAT Loan (0% Financing)
- Cape Light Compact — Heat Pumps
- Mass.gov — Seasonal Heat Pump Electric Rates
- MassCEC — Ground-Source Heat Pumps
- Mass.gov — DOER Federal Funding (HEAR/HOMES)
- IRS — OBBBA Energy Credit FAQs (25C/25D Termination)
Sources last verified: March 17, 2026. Incentive amounts and eligibility may change. Always confirm current details directly with Mass Save or your utility before making purchasing decisions.