Heat pump installation has been booming in Massachusetts over the past few years, but 2025 may be the busiest year yet – for good reason.
Why? A confluence of factors:
- Federal tax credits that expire at the end of 2025
- Lower seasonal heat pump electric rates for winter 2025-2026
- Updated rebates from Mass Save®
…and that’s on top of existing state rebates and financing.
So yes, the heat pump market is, well, hot.
Still, exploring your own options for heat pumps can feel overwhelming. The market is flooded with heat pump installers and different heat pump options – it can be challenging to know which path best fits your home and your finances.
We’ll explain the current heat pump financing and incentives, as well as how to get started if you want to make your own installation happen this year.
Installation Frenzy
If you’re interested in switching to a heat pump, you’re in good company.
In 2021, Mass Save recorded 8,603 home heat pump installations.
In 2022, that number jumped to 18,362. The next year: 28,084.
And for 2024, 40,000 homes made the switch.
Preliminary numbers for 2025 aren’t available yet, but the market is still booming. Mass Save’s Heat Pump Installer Network is growing as more EPA-certified companies join the ranks, making it easier to find a trained, insured installer.
All of this translates to huge decreases in fossil fuels emitted from heating sources in Massachusetts, a big step toward the commonwealth’s climate goals.
Why Get a Heat Pump in 2025?
So, why choose this moment to switch from gas or oil to a heat pump? Here’s a list.
Federal Incentives Expiring
You can still take advantage of the federal Energy Efficient Home Improvement Tax Credit. The credit includes up to $2,000 a year for installing a heat pump, as well as up to $1,200 for certain other types of energy-efficiency improvements to your home.
However, the heat pump must be installed by Dec. 31, 2025 in order to qualify. That’s a very good reason to hurry up and make the switch if your existing furnace or air conditioning systems are aging.
Better Winter Heat Pump Rates
The state Department of Public Utilities approved lower seasonal heat pump rates for this winter, meaning electric utilities customers can save an average of $540 over the season. Discounted winter rates will run from Nov. 1, 2025 to April 30, 2026, and apply to customers of Eversource, National Grid, and Unitil.
The lower rates are intended to eliminate concerns about the price of heating with a heat pump versus a gas furnace. (Heat pumps almost always cost less to use than oil heating, but may not always beat gas rates).
To ensure you’re enrolled in the lower rate, check with your utility.
New and Ongoing Incentives
While the federal tax credit is going away and new winter electric rates are on the horizon, a few things haven’t changed.
Namely, you can get up to $16,000 in rebates when you install whole-home heat pump systems in the state of Massachusetts. You can also get useful financing: Mass Save’s HEAT Loan makes 0 percent financing available for terms of up to seven years.
And now, another batch of incentives is here.
Mass Save's Updated Rebates
Weatherization, barrier remediation, and electrification – including heat pumps and heat pump water heaters – are now eligible for updated Mass Save rebates in certain instances.
- Enhanced incentives for certain communities: If you live in 21 Massachusetts towns or cities that are Designated Equity Communities (DEC), either as a homeowner or renter, you may be eligible for up to 100 percent off weatherization, barrier remediation, and electrification. See if your town is included.
- Income verification: Even outside the designated communities, certain customers may be eligible for up to 100 percent off based on income verification and home heating fuel.
Connect with the Neeeco team to see what rebates you may qualify for!
Exploring Your Heat Pump Options
To get started, first make sure you have an up-to-date Mass Save Home Energy Assessment; this will ensure you can take advantage of the program’s available rebates and financing.
Every home is unique, and retrofitting them with heat pumps requires expert guidance. Get a number of quotes from different installers to understand your options. Check if your community has a heat pump coach who can provide guidance as well.
If you’ve been thinking of making the switch, now may be the best time to do it – but make sure you act quickly, or you may miss out on time-sensitive savings.
*Some restrictions apply and offers are subject to change or cancellation. Visit MassSave.com/IncomeVerify for full details.
Call (781) 776-5711 or contact our team to schedule your no-cost Mass Save Home Energy Assessment today!