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.
Last verified: March 22, 2026
Rates and program availability may change after this date.
Maryland
Open
EmPOWER Maryland offers up to $15,000 for electrification projects (75% of cost) through all five major utilities. Midstream rebates of $800–$1,700 per heat pump are available instantly through contractors. Potomac Edison's Switch-to-Electric program adds up to $4,000 on top. Montgomery County's Electrify MC adds $2,500. Federal 25C/25D expired. HEAR/HOMES ($136.8M) not yet launched.
Sources:
The Short Version
✓ EmPOWER Electrification
Up to $15,000 (or 75% of project cost) through the HPwES whole-home pathway. All five major utilities participate. 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/HOMES Still Pending
Maryland was allocated $136.8 million in IRA rebates ($68.6M HOMES + $68.2M HEAR). Neither program has launched as of March 2026. MEA cannot confirm a date. When HEAR opens, it could add up to $8,000 for income-qualified households on top of EmPOWER.
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 & HOMES Programs — Not Yet Launched
⚠ $136.8 Million Allocated, No Launch Date
Maryland was allocated ~$136.8 million in IRA home energy rebates: $68.6M for HOMES (modeled savings) and $68.2M for HEAR (income-qualified electrification). Both received conditional DOE approval, and Maryland Environmental Service issued an RFP for a service provider in July 2025.
As of March 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. 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. 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. Amounts vary slightly by utility but are standardized across EmPOWER:
| 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). 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
All five utilities share the EmPOWER framework above. The differences are in 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).
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.
Pepco territory overlaps with Montgomery County's Electrify MC program — these stack (see Local Programs below).
Potomac Edison (FirstEnergy) — Best Per-Equipment Rebates
Western Maryland: Frederick, Hagerstown, Cumberland.
Potomac Edison runs a dedicated Switch-to-Electric Program that adds a bonus on top of standard midstream rebates:
| 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.
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 Territory Is the Best Deal in Maryland
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 — more than three times what most other Maryland utilities offer through midstream alone. If you're in Frederick, Hagerstown, or Cumberland and still heating with oil or gas, this is one of the strongest per-equipment incentives in the mid-Atlantic.
Local Programs Worth Knowing
✓ Montgomery County — Electrify MC
The standout local program. Cold-climate heat pump: $2,500. Mini-split: $2,000. HPWH: $500. Shared flue bonus (electrifying 2 fossil appliances): $1,000. Oil tank removal: $500. Stacks with Pepco/BGE EmPOWER rebates.
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
- Montgomery County Electrify MC (if applicable): $2,500
- Potomac Edison Switch-to-Electric (if applicable): up to $5,700 per unit instead of midstream
- When HEAR launches: up to $8,000 additional
Realistic maximum: ~$15,000–$17,500 today; potentially ~$25,500 when HEAR launches
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
- 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 but 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 $15,000 |
| 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–$18,000 |
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 Complete | 4.99% APR | $30,000 | Requires energy audit, up to 10 years |
| BeSMART ENERGY STAR | 6.99% APR | $30,000 | Single-measure upgrades, no audit |
| 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 |
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), 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 apply to Electrify MC for an additional $2,500. Howard County has a geothermal tax credit.
Apply for financing if needed
BeSMART loans (4.99–6.99% APR, up to $30,000) or Clean Energy Advantage (0% for 24 months, up to $50,000). Apply before or alongside your project.
What to Watch
HEAR/HOMES Launch
When these programs go live, income-qualified households could get up to $8,000 for a heat pump on top of EmPOWER rebates. No confirmed date yet.
EmPOWER Cycle Budget
Current funding is confirmed through 2026. The Public Service Commission reviews budgets annually. 2027 levels are not guaranteed at current amounts.
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/HOMES funding comes from the Inflation Reduction Act. Federal policy changes could affect the timeline or availability of these programs. EmPOWER is state-funded and unaffected.
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 Home Performance with ENERGY STAR pathway. 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) and offers two pathways: the Home Performance with ENERGY STAR whole-home pathway (up to $15,000 for electrification) 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/HOMES rebate program?
No. Maryland was allocated approximately $136.8 million in IRA rebate funding, but neither HEAR nor HOMES has launched as of March 2026. MEA cannot confirm a launch date. When HEAR opens, it could provide up to $8,000 for heat pumps for income-qualified households.
Which Maryland utility has the best heat pump rebates?
Potomac Edison (western Maryland — Frederick, Hagerstown) currently offers the most generous per-equipment incentives through its Switch-to-Electric program. A cold-climate heat pump can receive $1,700 standard + $4,000 switch-to-electric adder = $5,700 total. Other utilities offer $800–$1,700 through midstream rebates, or up to $15,000 through the whole-home HPwES pathway.
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
- 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)
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)