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Incentives and Financing

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.

Explore Your Options

Income-Based Incentives

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. Other incentives may apply. HeatSmart CNY is here to help you through the process—contact us or call 833-315-HEAT for assistance.

HeatSmart CNY Affordability Grant

HeatSmart CNY is offering grants of $7,500 per home for geothermal or $5,000 per home for cold climate air source heat pumps, and $750 for heat pump water heaters to households with incomes less than 80% of area median income. These are available only through the HeatSmart CNY campaign! You can access these grants through our partner installers. After you enroll and your income is verified, your installer will apply the grant to your project.

Finger Lakes Climate Fund

This rebate is available on a per-case basis through our 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.

Rebates for Installations and Upgrades

Utility Rebates for Heat Pumps

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 Heat Smart CNY approved installers qualify.

Building Heating Rebates

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 < 300,000 BTUH $1,000 per 10,000 BTUH (full load) OR $500 per outdoor unit (partial load)
Geothermal, air source, or VRF > 300,000 (large buildings) Custom incentive: $80 per MMBTU energy savings

Water Heating Rebates

System Type Capacity Rebate
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.

Tax Incentives

Federal Residential Renewable Energy Tax Credit for Geothermal

Under the Consolidated Appropriations Act of 2021, the renewable energy tax credits for fuel cells, small wind turbines, and geothermal heat pumps now feature a gradual step down in the credit value, the same as those for solar energy systems. This tax credit has been extended at the current level of 26% for projects that begin construction through the end of 2022. The credit declines to 22% in 2023.

Existing homes and new construction qualify.  Both principal residences and second homes qualify. Rentals do not qualify.

Nonbusiness (Residential) Energy Property Credit

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.

The federal Nonbusiness Energy Property Credit includes:

  • $300 for Air Source Heat Pumps and Heat Pump Water Heaters
  • 10% of costs of insulation.

This credit is limited to a total combined credit limit of $500 for all tax years after 2005.

Property Tax Exemption

Property tax exemptions 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. 

Green Jobs Green New York Loans

New York State offers two loans for energy efficiency (including heat pumps) and renewable energy projects through their Green Jobs Green New York program:

  • On-Bill Recovery includes the cost of the upgrades right on your energy bill and requires a cost-effectiveness test to be passed. This can be passed on to the next homeowner if it is not paid off by the time you sell your home. Your monthly payments will not exceed your estimated average monthly energy cost savings.
  • Smart Energy loans is a traditional loan that is paid back through monthly payments. Lower interest rates are accessed through enrolling in autopay.

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.

EnerBank USA

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 Green CNY Loan

Home HeadQuarters provides up to $20,000 with terms of 7-10 years at 5.24% in Green CNY loans.

Other Resources

We do our best to keep this page updated with the latest information. This page was last modified on September 3, 2021.