Maryland Heat Pump Rebates & Incentives (2026)
Federal tax credits are gone, but Maryland's EmPOWER program expanded significantly in May 2025. Depending on your utility territory and whether you qualify for income-based programs, you may be able to offset anywhere from a few thousand dollars to $15,000+ on a heat pump project. This guide covers all major Maryland heat pump incentives available in 2026, including EmPOWER, Potomac Edison Switch-to-Electric, and Montgomery County Electrify MC. Here's what's actually available.
Updated and sources last checked September 17, 2026
Rates and program availability may change after this date.
Maryland
Open
EmPOWER Maryland is the main incentive: whole-home electrification up to $15,000 (75% of cost) at BGE, Pepco, Delmarva and SMECO, and $10,000 at Potomac Edison. Midstream per-equipment rebates run $800–$1,700, though no utility publishes its own amounts. BGE, Pepco and Potomac Edison each pay extra for fossil-to-electric conversions; only Potomac Edison publishes the figures (up to $4,000 per heat pump). Montgomery County's Electrify MC adds up to $2,500, but only through Elysian Energy. Federal 25C/25D expired Dec 2025. Maryland's IRA rebates (HEAR and HERO, formerly HOMES) have DOE conditional approval only, with no launch date.
Sources:
The Short Version
✓ EmPOWER Electrification
Up to $15,000 (or 75% of project cost) through the whole-home pathway — HPwES at BGE, Pepco and Delmarva, HEIP at SMECO. Potomac Edison's whole-home rebate caps at $10,000. Oil and propane conversions now qualify.
✓ Midstream + Switch-to-Electric
Instant rebates of $800–$1,700 per unit through contractors, no audit needed. Potomac Edison adds up to $4,000 through Switch-to-Electric for a combined $5,700 per heat pump.
✓ Total Potential Savings
$1,700 (midstream, any income) to ~$17,500 (HPwES + Montgomery County). Income-qualified households may pay nothing through LIEEP. Full electrification packages can reach ~$18,000+ in total incentives.
✗ Federal Tax Credits Expired
Both 25C ($2,000 heat pump) and 25D (30% geothermal) expired Dec 31, 2025. No replacement exists.
⚠ $136.8M HEAR/HERO Still Pending
Maryland was allocated $136.8 million in IRA rebates ($68.6M HERO, formerly HOMES + $68.2M HEAR). Neither program has launched as of September 2026. MEA cannot confirm a date. When HEAR opens, it could add up to $8,000 for income-qualified households on top of EmPOWER — requires existing electric equipment or new construction.
Federal Tax Credits Are Gone
The One Big Beautiful Bill Act (signed July 4, 2025) accelerated expiration of both Section 25C ($2,000/year for heat pumps) and Section 25D (30% of geothermal costs). Equipment must have been installed by December 31, 2025 to qualify — purchase date doesn't matter. The only exception: if you completed installation in 2025 but couldn't use the full 25D credit on your 2025 return, you can carry unused amounts forward to 2026. Full details →
HEAR & HERO Programs — Not Yet Launched
Under DOE Program Notice 26-2 (effective May 29, 2026), replacing a gas, propane, or oil heating system no longer qualifies for HEAR, and a program that hasn't launched must align with this before it opens. Eligibility now turns on new construction or on the home's existing heating equipment already being electric — replacing electric resistance heat with a heat pump is the clearest qualifying case. Programs differ on whether replacing an existing heat pump counts, so confirm with yours before committing. The notice also requires a home to use rebates for insulation and air sealing before a heating or cooling upgrade, unless it already meets a state-specified level. Fuel-switching projects can still route to HERO, which sets no fuel condition.
⚠ $136.8 Million Allocated, No Launch Date
Maryland was allocated ~$136.8 million in IRA home energy rebates: $68.6M for HERO (modeled savings, formerly HOMES) and $68.2M for HEAR (income-qualified electrification). Those allocation figures come from DOE, not from MEA, whose own program page publishes no dollar amounts. Both pathways received conditional DOE approval, and Maryland Environmental Service issued an RFP for a service provider in July 2025.
As of September 2026, neither program is accepting applications. When HEAR launches, income-qualified households (below 80% AMI) could receive up to $8,000 for heat pumps and $1,750 for heat pump water heaters — requires existing electric equipment or new construction. These are separate from EmPOWER rebates and are expected to stack.
EmPOWER Maryland — The Main Program
EmPOWER is Maryland's state-mandated energy efficiency program, funded by utility ratepayer surcharges. Every major utility participates: BGE, Pepco, Potomac Edison, Delmarva Power, and SMECO. There are two ways to access rebates:
Path 1: Home Performance with ENERGY STAR (HPwES) — Whole-Home
This is the high-value path. A $100 energy audit (subsidized — normally ~$400) leads to modeled savings recommendations. As of May 2025, electrification projects (converting from fossil fuel to heat pump) qualify for up to $15,000 or 75% of total project cost, whichever is less — except at Potomac Edison, where the whole-home cap is $10,000. Non-electrification improvements cap at $10,000 or 75%. Oil and propane systems now qualify — a significant expansion from prior cycles.
Path 2: Midstream HVAC Rebates — Per-Equipment, No Audit
Instant rebates applied at the point of sale through participating contractors. No energy audit required. Available to all homeowners. The amounts below are standardized across EmPOWER, but none of the five utilities publishes them: their rebate pages list only minimum efficiency tiers and tell you to ask a participating contractor. Confirm the current amount with your contractor before signing.
| Equipment | Midstream Rebate |
|---|---|
| Cold-climate heat pump (ducted) | $1,700 |
| Standard air-source heat pump (ducted) | Up to $1,300 |
| Ductless mini-split | $800 |
| Heat pump water heater | $900–$1,600 |
| Geothermal heat pump | $7,000–$7,100 |
| Smart thermostat | $100 |
⚠ Common Mistake: HPwES and Midstream Don't Stack
HPwES and midstream are generally either/or for the same equipment. You pick one path, not both. HPwES offers higher total caps but requires the $100 audit and comprehensive project scope. Midstream is instant and simpler but caps at the per-unit amounts above. Decide which path fits your project before signing a contract.
✓ Best Candidates for Maryland Rebates
Homeowners converting from gas, oil, or propane to a heat pump (electrification bonus unlocks the $15,000 HPwES cap, or $10,000 at Potomac Edison). Potomac Edison customers switching from fossil fuel (highest per-equipment rebates in the state). Montgomery County residents (Electrify MC stacks with EmPOWER). Eastern Shore homeowners on propane or fuel oil (largest operating cost savings from switching).
Utility-by-Utility Differences
The five electric utilities below share the EmPOWER framework above; Washington Gas Light also participates on the gas side. The differences are in whole-home caps, bonus programs and electrification adders.
BGE (Baltimore Gas & Electric)
Largest utility in Maryland. Baltimore metro + surrounding counties.
HPwES: Up to $15,000 electrification / $10,000 non-electrification. Midstream: Standard table above. HPWH: Up to $1,600 via appliance rebate program (instant at Lowe's/Home Depot or mail-in), plus 75% of home-preparation costs up to $1,500. Electrification: additional rebates for replacing a gas, oil or propane system with electric; BGE publishes no amounts.
Income-qualified: Limited Income Program — pay $250–$750 co-pay for up to $5,000–$10,000 in upgrades including HVAC replacement.
Pepco (Potomac Electric Power)
Montgomery County, Prince George's County, DC suburbs.
HPwES: Up to $15,000 electrification. Includes 0% interest financing for 24 months option. Midstream: Same as BGE. HPWH: Up to $1,600. Electrification: participating contractors receive additional rebates for converting heating and cooling from gas, oil or propane to electric; Pepco publishes no amounts.
Pepco territory overlaps with Montgomery County's Electrify MC program — these stack (see Local Programs below).
Potomac Edison (FirstEnergy) — Published Switch-to-Electric Amounts
Western Maryland: Frederick, Hagerstown, Cumberland.
Home Performance: 75% of eligible costs up to $10,000 per home — a lower whole-home cap than the $15,000 at BGE, Pepco, Delmarva and SMECO. Potomac Edison has not published whether Switch-to-Electric incentives can be claimed on the same project.
Potomac Edison runs a Switch-to-Electric Program that adds a bonus on top of standard midstream rebates. BGE and Pepco also pay extra for replacing a gas, oil or propane system with electric, but neither publishes its amounts, so Potomac Edison's are the only ones we can state:
| Equipment | Standard | Switch Adder | Combined |
|---|---|---|---|
| Cold-climate HP | $1,700 | +$4,000 | $5,700 |
| Standard ASHP | ~$1,500 | +$3,500 | ~$5,000 |
| Ductless mini-split | ~$800 | +$3,000 | ~$3,800 |
| HPWH | $1,500 | +$2,500 | $4,000 |
| Electrical make-ready | — | $3,000 | $3,000 |
Switch-to-Electric requires decommissioning your fossil fuel system. Programs valid through December 31, 2026.
SMECO (Southern Maryland Electric Cooperative)
Charles, St. Mary's, Calvert, parts of Prince George's counties.
HEIP: Up to $15,000 for fuel-switching projects, including up to $2,000 in Make-Ready electrical incentives within that cap. Home energy analysis required, provided at no cost. Hybrid systems retaining fossil backup qualify. HPWH: $1,600 instant rebate. ASHP midstream: Participates in EmPOWER midstream (~$1,300–$1,700 range, applied through contractors). Bonus: FlexHome Pilot — $800 enrollment bonus + up to $96/year in bill credits for HPWH owners who join demand response.
Delmarva Power
Eastern Shore of Maryland.
HPwES: Up to $15,000 electrification / $10,000 non-electrification. HPWH: Up to $1,600. Standard EmPOWER midstream structure. Eastern Shore has higher propane and fuel oil use — electrification rebates are particularly relevant here.
✗ Choptank Electric Cooperative — Limited
Parts of Eastern Shore. Does not participate in EmPOWER HVAC midstream. No dedicated air-source heat pump rebate. Offers HPWH rebate and income-eligible weatherization (Chop-A-Watt, up to $7,000). If you're on Choptank, your options are limited until HEAR launches.
Potomac Edison Is the Only Utility That Publishes Its Switch-to-Electric Amounts
Western Maryland homeowners on Potomac Edison can receive up to $5,700 for a single cold-climate heat pump through the Switch-to-Electric program. BGE and Pepco pay their own fossil-to-electric adders but publish no amounts, so a like-for-like comparison is not possible from published sources. Potomac Edison's whole-home cap is lower — $10,000 against $15,000 elsewhere — so the audit pathway is worth less here. If you're in Frederick, Hagerstown, or Cumberland and still heating with oil or gas, ask every utility-participating contractor what the conversion adder is worth.
Local Programs Worth Knowing
✓ Montgomery County — Electrify MC
A County pilot, and the standout local program. Cold-climate heat pump: $2,500. Mini-split: $2,000. Ducted heat pump: $1,000. Geothermal: $2,000. HPWH: $500. Shared flue bonus (electrifying 2 fossil appliances that share a masonry chimney): $1,000. Oil tank removal: $500. Stacks with Pepco/BGE EmPOWER rebates, and the incentive is applied at point of sale.
You must use Elysian Energy, the County's competitively chosen contractor, to receive these incentives — work done by your own contractor does not qualify. Fossil-fuel heating cannot be retained, and since July 16, 2024 the equipment must replace a fossil-fuelled equivalent.
Also offers HEECAP Homes Grants ($1.5M fund for LMI electrification) and an energy efficiency property tax credit up to $250/year.
Howard County
No ASHP rebate. Geothermal property tax credit: up to $5,000 (50% of eligible costs). Partners with Solar United Neighbors on a Switch Together Heat Pump Co-op for group-purchase discounts.
Other Counties
Prince George's County has a Clean Energy Program, but the electric incentive component was paused as of early 2025. Anne Arundel and Baltimore counties offer geothermal property tax credits. Most Maryland homeowners outside Montgomery County will rely primarily on their utility's EmPOWER program.
Realistic Incentive Stacking
Maryland's EmPOWER programs are available at all income levels — the main variable is your utility territory and which pathway you choose (HPwES vs. midstream). Income matters primarily for LIEEP, WAP, and the future HEAR program. Here's what a homeowner replacing a gas furnace with a cold-climate heat pump system (typical project cost: $14,000–$20,000) could realistically receive:
Above 150% AMI — Midstream Path (Any Utility)
- EmPOWER midstream cold-climate HP: $1,700
- EmPOWER midstream HPWH: $1,600
- Montgomery County Electrify MC (if applicable): $2,500 + $500
- Federal 25C/25D: $0 (expired)
- HEAR: not launched
Realistic maximum: ~$3,300 (most territories) to ~$6,300 (Montgomery County)
80–150% AMI — HPwES Whole-Home Path
- EmPOWER HPwES electrification: up to $15,000 ($10,000 at Potomac Edison)
- Montgomery County Electrify MC (if applicable): $2,500
- Potomac Edison Switch-to-Electric: up to $5,700 per unit on the midstream path. Whether it can also be claimed alongside Home Performance is unpublished.
- When HEAR launches: up to $8,000 additional — requires existing electric equipment or new construction
Realistic maximum: ~$15,000–$17,500 today in BGE, Pepco, Delmarva and SMECO territory; potentially ~$25,500 when HEAR launches. Potomac Edison caps the whole-home pathway at $10,000, and neither the utility nor the state has published whether Switch-to-Electric can be claimed on the same project.
Below 80% AMI — Best Case
- EmPOWER LIEEP: up to $5,000–$10,000 in free upgrades (including HVAC)
- Maryland WAP: additional free weatherization
- When HEAR launches: up to $8,000 HP + $1,750 HPWH — requires existing electric equipment or new construction
- Montgomery County HEECAP grants (if applicable): additional
Realistic maximum: could pay $0 out of pocket
What You'll Actually Pay
$0 (income-qualified through LIEEP/WAP) to ~$14,000–$17,000 out of pocket (above 150% AMI, midstream path on a $16,000–$20,000 project). The HPwES pathway significantly reduces out-of-pocket to ~$3,000–$5,000 for most projects, or ~$4,000–$10,000 at Potomac Edison, where the whole-home cap is $10,000. Either way it requires a $100 audit and comprehensive scope. No state tax credit exists for air-source heat pumps. No state-level low-interest loan exclusively for heat pumps (BeSMART loans cover broader home improvements).
Stacking by Territory
Because your utility determines which programs you can access, here's a side-by-side for the three most distinct territories:
| Layer | BGE Territory | Pepco + MoCo | Potomac Edison |
|---|---|---|---|
| Federal 25C/25D | $0 | $0 | $0 |
| EmPOWER HPwES | Up to $15,000 | Up to $15,000 | Up to $10,000 |
| OR midstream (no audit) | $1,700 | $1,700 | $5,700 |
| Local programs | — | $2,500 | — |
| HEAR (when launched) | Pending | Pending | Pending |
| Realistic today | ~$1,700–$15,000 | ~$4,200–$17,500 | ~$5,700–$10,000 |
Range depends on whether you choose HPwES (higher cap, audit required) or midstream (instant, no audit). HPwES and midstream are generally either/or for the same equipment. Income-qualified homeowners may pay nothing through LIEEP/WAP programs.
Financing Options
With federal credits gone, low-interest loans bridge the gap:
| Program | Rate | Max Amount | Notes |
|---|---|---|---|
| BeSMART Home Loan | 6.99% APR | $5,000–$30,000 | Up to 10 years. Credit score 640+, DTI under 50%. Cannot finance work already purchased or completed. |
| Clean Energy Advantage | 0% for 24 mo | $50,000 | Must combine with utility rebates |
| EmPOWER HPwES financing | 0% for 24 mo | Varies | Through Pepco and some utilities |
Clean Energy Advantage and EmPOWER HPwES financing terms were last checked in June 2026 and have not been re-verified.
Weatherization & Low-Income Programs
Maryland has several programs specifically for income-qualified households that can cover heat pump installations at little or no cost:
Maryland Weatherization Assistance Program (WAP)
Administered by DHCD. Provides free energy efficiency upgrades — including HVAC replacement — to households at or below 200% of federal poverty guidelines. Contact your local Community Action Agency to apply.
EmPOWER Limited Income Programs (LIEEP)
Each utility runs an income-eligible program under EmPOWER. BGE's Limited Income Program covers up to $5,000–$10,000 in upgrades (including HVAC) with a co-pay of $250–$750. Other utilities have similar programs. These are separate from WAP and can provide more comprehensive upgrades.
Choptank Chop-A-Watt
Eastern Shore income-eligible program through Choptank Electric. Up to $7,000 in weatherization improvements. One of the few options for Choptank customers who don't have access to EmPOWER HVAC midstream rebates.
Climate: Do You Need a Cold-Climate Heat Pump?
Maryland is mostly IECC Climate Zone 4A (Mixed-Humid) — heat pumps work well statewide. Western Maryland (Garrett County) is Zone 5A.
| City | Design Temp | ccASHP? |
|---|---|---|
| Baltimore | 13–15°F | Optional |
| Annapolis | 16–17°F | Optional |
| Frederick | 10–12°F | Advisable |
| Hagerstown | 8–10°F | Advisable |
| Oakland (Garrett) | 0–2°F | Strongly recommended |
Most Maryland homes heat with natural gas (~49%) or electricity (~41%). The Eastern Shore has notably higher propane and fuel oil use (15–25%) due to limited gas infrastructure — those households see the largest savings from switching to a heat pump.
Considering pairing a heat pump with battery storage? Read our home battery guide for a full breakdown of costs, incentives, and whether it makes sense in 2026.
How to Apply
Check your utility
Your utility determines which specific programs you can access. Find yours on your electric bill or utility website.
Choose your path: HPwES or midstream
For maximum rebate (up to $15,000, or $10,000 at Potomac Edison), schedule a $100 HPwES energy audit through your utility. For a quick rebate ($800–$1,700), go midstream through a participating contractor — no audit needed.
Get quotes from participating contractors
HPwES requires a BPI-certified contractor. Midstream rebates are applied through the contractor network. Each utility maintains a contractor list.
Check for local programs
Montgomery County residents should contact Electrify MC for up to an additional $2,500 — but the work must be done by Elysian Energy, the County's chosen contractor, to qualify. Howard County has a geothermal tax credit.
Apply for financing if needed
BeSMART loans (6.99% APR, $5,000–$30,000) or Clean Energy Advantage (0% for 24 months, up to $50,000). Apply before or alongside your project.
What to Watch
HEAR/HERO Launch
When HEAR goes live, income-qualified households could get up to $8,000 for a heat pump on top of EmPOWER rebates — requires existing electric equipment or new construction. HERO sets no fuel condition. No confirmed launch date for either.
EmPOWER Cuts Begin in 2027
Maryland's Utility RELIEF Act, passed in April 2026, cuts EmPOWER's energy-savings targets by roughly a third for 2027–2029 (returning to current levels by 2036) to reduce the ratepayer surcharge. Heat pump rebates are expected to shrink starting in 2027, so 2026 is the year to act on current amounts. Separately, gas-utility efficiency programs end by the close of 2026, though the electric-side heat pump rebates above are unaffected for now.
New Residential Energy Equity Program
The same law funds a new $72.65 million Residential Energy Equity Program through the Maryland Energy Administration to help low- and moderate-income households install heat pumps, beginning in fiscal year 2027. MEA now lists a Residential Energy Equity Grant Program open to non-profits and local government entities; whether that is this program, or a separate one, has not been made clear. Watch MEA.
Midstream Rebate Adjustments
BGE updated its midstream incentive amounts around September 2025. Specific dollar amounts can shift mid-cycle. Confirm current amounts with your contractor.
IRA Funding Runway
Maryland's $136.8M in HEAR/HERO funding comes from the Inflation Reduction Act. DOE issued further Program Notices on June 1, 2026, and MEA says it is still evaluating what they mean for Maryland's programs, so the rules may change again before launch. EmPOWER is state-funded and not subject to these federal IRA changes (though see the 2027 state cuts noted above).
Frequently Asked Questions
What heat pump rebates are available in Maryland in 2026?
Maryland’s main incentive is EmPOWER Maryland, which offers up to $15,000 (or 75% of project cost) for electrification projects through the whole-home pathway — HPwES at BGE, Pepco and Delmarva, HEIP at SMECO, and a $10,000 cap at Potomac Edison. Each utility also offers midstream rebates of $800–$1,700 per heat pump without requiring an audit. Potomac Edison’s Switch-to-Electric program adds up to $4,000 on top. Montgomery County’s Electrify MC adds $2,500 for cold-climate heat pumps. The federal 25C tax credit expired December 31, 2025.
What is EmPOWER Maryland?
EmPOWER Maryland is a state-mandated energy efficiency program funded by utility ratepayer surcharges. It operates through each utility (BGE, Pepco, Potomac Edison, Delmarva Power, SMECO) — though Potomac Edison’s whole-home rebate caps at $10,000 rather than $15,000 — and offers two pathways: the whole-home pathway (up to $15,000 for electrification, run as HPwES at most utilities and as HEIP at SMECO) and midstream HVAC rebates ($800–$1,700 instant through contractors). A $100 energy audit is required for the HPwES pathway.
Has Maryland launched the HEAR/HERO rebate program?
No. Maryland was allocated approximately $136.8 million in IRA rebate funding, but neither HEAR nor HERO (the efficiency pathway, formerly HOMES) has launched as of September 2026. MEA cannot confirm a launch date. When HEAR opens, it could provide up to $8,000 for heat pumps for income-qualified households — requires existing electric equipment or new construction.
Which Maryland utility has the best heat pump rebates?
Potomac Edison is the only Maryland utility that publishes its switch-to-electric amounts: a cold-climate heat pump can receive $1,700 standard plus a $4,000 adder, $5,700 total. BGE and Pepco also pay extra for converting from gas, oil or propane to electric but do not publish the amounts, so ask a participating contractor. Every utility offers $800–$1,700 through midstream rebates, or up to $15,000 through the whole-home pathway — $10,000 at Potomac Edison.
Can I stack EmPOWER with Montgomery County rebates?
Yes. EmPOWER utility rebates and Montgomery County’s Electrify MC incentives stack — they are funded by different sources. A Montgomery County homeowner with Pepco could combine up to $15,000 EmPOWER + $2,500 Electrify MC + $500 HPWH = roughly $18,000 in a best-case scenario.
Do I need a cold-climate heat pump in Maryland?
For most of Maryland (Baltimore, Annapolis, DC suburbs), a standard heat pump works well — design temperatures are 13–17°F. For western Maryland (Frederick, Hagerstown, Cumberland), cold-climate models are advisable since design temperatures drop to 8–12°F. All EmPOWER utilities offer higher rebates for cold-climate models ($1,700 vs. $1,300).
Sources
- BGE Smart Energy — Heating & Cooling
- Pepco — HVAC Efficiency Program
- Potomac Edison — Switch to Electric
- Potomac Edison — Home Performance
- Delmarva Power — HVAC Efficiency
- SMECO — Heat Pump Water Heaters
- MEA — IRA Rebates Status
- MEA — Financial Resources & Incentives
- Montgomery County — Electrify MC
- DHCD — BeSMART Home Loans
- IRS — 25C/25D Expiration (OBBBA FAQ)
- BGE — Switch to Electric
- Pepco — Make The Switch to Electric
Disclaimer: This page covers the main statewide, utility, and IRA heat pump incentives available to Maryland homeowners in 2026. It does not calculate savings, guarantee eligibility, or represent any incentive program. EmPOWER rebate amounts vary by utility and can change mid-cycle; Montgomery County and local programs have separate eligibility requirements. We verify status regularly but programs can change without notice. Always confirm current amounts and eligibility with your utility, the Maryland Energy Administration, and your contractor before making decisions.
See how this state compares → Heat Pump Rebates by State (2026)