Energy efficiency upgrades and new heating and cooling systems are major financial investments in your home or building, but they are good investments, reducing your energy usage and keeping you and your family more comfortable.
These incentives are for single family homes, or 2-4 family in some occasions. Further incentives and programs for larger multifamily, nonprofit and commercial properties can be found on https://heatsmartcny.org/commercial/
No matter what you heat your home with, improving your home’s performance by better insulation and reducing drafts will make you more comfortable and save you money on heating and cooling. Some incentive programs for heat pumps also require you to meet certain levels of insulation in the house first, so improving your energy efficiency now will make your home ready for heat pumps in the future.
There are incentives for all income levels! Choose your household size (and county for single households) to see qualifying income levels for EmPower, Assisted Home Performance, or Comfort Home. These programs focus on improving energy efficiency, health, and safety of a home, and can sometimes provide funding for heat pumps as well.
Skip to details on each program:
Rebates are available from New York State utilities for installation of heat pump systems and equipment. These are good for all building types (residential, commercial, multifamily, nonprofit, industrial, etc.), all current fuel types, and both new construction and renovation/retrofitting. Rebates are based on the heating load/capacity of a building, so incentives are better for equipment that heats most efficiently at cold temperatures. All paperwork, including the application form, is typically completed by your installer, and all HeatSmart CNY approved installers qualify.
These incentive tables are for National Grid and NYSEG territories. Visit CleanHeatNY for rebates in other areas.
|System Type||Heating Capacity||Rebate|
|Ground Source / Geothermal Heat Pump||< 300,000 BTUH||$1,500 per 10,000 BTUH|
|Cold Climate Air Source Heat Pump||90-120% ("full load") of heating load < 300,000 BTUH||$1,000 per 10,000 BTUH|
|Cold Climate Air Source Heat Pump||90-120% ("full load") of heating load < 300,000 BTUH with integrated controls||$1,200 per 10,000 BTUH (Starting Sept 1, 2022)|
|Cold Climate Air Source Heat Pump||90-120% ("full load") of heating load < 300,000 BTUH with fossil fuel system completely removed ("decommissioned")||$1,400 per 10,000 BTUH (Starting Sept 1, 2022)|
|Cold Climate Air Source Heat Pump||<90% of heating load||$500 per outdoor unit (partial load)|
|Geothermal, air source, or VRF||> 300,000 (large buildings)||Custom incentive: $80 per MMBTU energy savings, or $100,000 per MMBTU for projects that include building envelope improvements|
|Air Source Heat Pump Water Heater||< 120 gallons||$700 per unit|
|Air Source Heat Pump Water Heater||> 120 gallons (commercial)||$80 per MMBTU annual energy savings|
|Ground Source Heat Pump Water Heater||N/A||$900 per unit|
|Ground Source Heat Pump Desuperheater||N/A||$100 per unit|
|BONUS for Cold Climate Air Source: Heat Pump + Water Heater installation||N/A||$250|
NYSEG/RG&E customers can have their own plumbers and/or electricians do the installation if preferred, and apply for the rebate themselves.
The 2022 Inflation Reduction Act provides unprecedented funding to help people improve their homes, energy efficiency, and health while helping to address climate change.
Significant tax rebates and credits are included. We are covering the most applicable programs here.
Disclaimer: We are not tax professionals. The information on this website is intended for guidance only. There are particular standards and details that must be met; please consult with a tax professional.
IRS FAQ Documents:
The Inflation Reduction Act of 2022 has bumped the federal Residential Clean Energy Property Credit tax credit for geothermal heating, solar panels, and battery storage, etc. back up to 30% for the next 10 years, until 2033. This is retroactive to any project installed in 2022 Consult with a tax professional to determine how much this incentive may be for you; not all households are able to take the full 30%, it is limited by the amount of tax you owe.
Existing homes and new construction qualify. Both principal residences and second homes qualify. Rentals do not qualify.
Eligible measures include energy-efficient insulation, windows, doors, and similar energy-saving improvements, certain biomass stoves and boilers, electric panels and related equipment, and home energy audits.
In 2022, the New York State Legislature passed a new geothermal state tax credit of 25% of the project cost, up to $5000.
The New York solar equipment tax credit can reduce your state tax payments by up to $5,000 or 25% off your total solar energy expenses (whichever is lower). Both Federal and New York solar credits can be carried forward.
For eligibility and information specific to your situation, consult your tax preparer.
Property tax exemptions exist for residential energy efficiency upgrades including heat pumps.
With proper financing, households on oil, propane, and resistance electric can realize significant out-of-pocket savings on their annual energy costs from day one. Your HeatSmart CNY installer will help you apply for the loans that apply to your project.
New York State offers two loans for energy efficiency (including heat pumps) and renewable energy projects through their Green Jobs Green New York program:
Geographic-based eligibility for reduced GJGNY interest rates: If you live in one of the census blocks pictured below, you can qualify for reduced interest rates without having to prove your income. This makes it easier for self-employed individuals or others with hard-to-document incomes to access these reduced interest rates. Interest rates as low as 3.49% are available for census areas based on average income; enter your address here to see if you qualifies.
Those with credit scores of 780 or above do not have to meet cost-effectiveness or debt-to-income ratio tests and income documentation is not required (unless applying for under lower income interest rates). Financing is still available for credit scores down to 540.
Many installers offer financing options through EnerBank USA. The GeoSmart loan finances up to $85,000 with terms up to 20 years at 4.99%. They also offer a 12-month 0% interest same-as-cash loan to cover the amount of the expected federal tax credit.
Home HeadQuarters provides up to $20,000 with terms of 7-10 years at 5.24% in Green CNY loans.
EmPower New York provides no-cost energy efficiency solutions to income-eligible New Yorkers. Nearly 160,000 of your neighbors are already saving energy and saving money with EmPower New York — without spending a dime. Whether you own your home or rent, we will connect you with a participating contractor [PDF] to assess if your home would benefit from free energy upgrades such as:
You can choose one of these three ways to apply:
NYSERDA’s Assisted Home Performance program is for households with incomes 60-80% of AMI. It uses the same application as Empower, and provides the same menu of energy efficiency improvements for residences. It provides those who qualify with a discount covering 50% of the cost of eligible energy efficiency improvements up to $5,000 per project for single-family homes. Two- to four-unit residential homes with income-eligible residents may qualify for a discount of up to $10,000. The program is available for both renters and owners. Learn more about benefits for two- to four-unit residential homes.
This program assists income-eligible families (below 60% of state median income, same as Empower), reducing their heating and cooling costs through energy efficiency. Most of these providers have other home improvement funds as well, but also have a waiting list. We recommend applying for both WAP and Empower New York; you may go through both programs. Empower New York will be able to help sooner, and WAP can complete any improvements not covered by Empower.
For homeowners with incomes above 80% AMI, NYSERDA’s Comfort Home program provides incentives of $1000-$4000 for improving a home’s energy efficiency through a qualified contractor. Learn more here.
This rebate is available on a per-case basis through installers. It provides homeowners throughout the Finger Lakes and Central New York areas with up to $2,500 to encourage heat pump and insulation installations. Funding comes from local carbon offset contributions. Help contribute to projects in the CNY area! Offset your carbon emissions and pick the CNY team. Colgate University’s team also contributes to projects in our area!
These programs from the 2022 federal Inflation Reduction Act will be implemented by states and are currently under development. Our best guess is to see them implemented in mid-to-late 2023. Based on the IRA, these are broad outlines of what we may expect:
A point-of-sale program to provide rebates to low- and middle-income families who purchase energy-efficient electric appliances. To qualify for a rebate, your family’s total annual income must be less than 150% of the median income where you live. Families below 80% of AMI will get the full rebate; 80-150% AMI will get 50% rebates.
Rebates for non-appliance upgrades will also be available up to the following amounts:
The HOMES (Home Owner Managing Energy Savings) Rebate Program will get you cash back by shrinking your overall home energy use through weatherization renovations, like adding insulation, or by installing more efficient appliances, like heat pump clothes dryers. The amount you can get back depends on how much energy you’ve saved, how you prove those energy savings (through either modeling, which requires computer software, or measured energy savings), and your household income. Save more energy, get more cash. Plus, low- and moderate-income households qualify for double the rebate amount and are eligible for up to 80 percent of project costs. That’s $8,000 max if you cut energy use by 35 percent and $4,000 max if you cut energy use by 20 percent. (Source: NRDC 2022)
We do our best to keep this page updated with the latest information. This page was last modified on January 23, 2023.