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NuWatt designs, installs, and manages solar, battery, heat pump, and EV charger systems across 9 states. One company, one warranty, one point of contact.
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No federal tax credits. No problem. Bundling solar panels and a heat pump eliminates both your electric bill and your fuel bill — with state incentives covering $5,000 to $21,500 of the cost depending on where you live.
Quick Answer
Bundling solar panels and a heat pump in 2026 typically costs $32,000-52,000 before state incentives, with bundled savings of $2,000-5,000 versus separate installations. With the federal residential solar ITC (25D) and heat pump credit (25C) both expired, state programs are the primary source of savings. The best value states are Rhode Island (up to $21,500 in incentives), Massachusetts (up to $10,000 HP rebate + SMART solar), and Maine ($1,000-3,000/unit HP rebate + 1:1 net metering). A bundle eliminates both your electricity and fuel costs, with payback periods of 9-15 years depending on your state and fuel displaced.
The logic is simple: solar panels eliminate your electricity bill, and a heat pump eliminates your fossil fuel bill. Together, they create a home that runs on self-generated electricity with near-zero energy costs. Each technology makes the other one better.
$0
Target energy cost
$2K-5K
Bundle labor savings
9-15 yr
Payback period
No Federal Tax Credits in 2026
The residential solar ITC (Section 25D) and the heat pump credit (Section 25C) both expired on December 31, 2025. There is no federal tax credit for homeowner-purchased solar or heat pump installations. This makes state incentives and bundling discounts more important than ever.
Every state has a different incentive stack. Here is what your solar + heat pump bundle looks like in each New England state, including the specific programs, dollar amounts, and payback timelines as of March 2026.
Electric rate: $0.28/kWh
$2,800-3,400
Annual savings
11-13 yr
Payback
SMART $0.03/kWh (20 yr)
Mass Save up to $10,000
ConnectedSolutions $275/kW
Fuel displaced: Gas $2.20/therm
Full Massachusetts guideElectric rate: $0.27/kWh (CMP)
$3,200-3,800
Annual savings
10-12 yr
Payback
NEB 1:1 net metering
Efficiency Maine $1,000-3,000/unit
None
Fuel displaced: Oil $3.82/gal
Full Maine guideElectric rate: $0.29/kWh
$3,000-3,600
Annual savings
9-11 yr
Payback
REF $0.65/W + REG $0.27/kWh
Clean Heat RI 60% (max $11,500)
ConnectedSolutions $225/kW
Fuel displaced: Oil $3.85/gal
Full Rhode Island guideElectric rate: $0.27/kWh
$2,600-3,200
Annual savings
11-13 yr
Payback
Net metering 1:1
Energize CT $250-1,000/ton
None
Fuel displaced: Oil $3.90/gal
Full Connecticut guideElectric rate: $0.27/kWh
$2,400-2,900
Annual savings
13-15 yr
Payback
NEM 2.0 (~85% retail)
No state HP rebate
None
Fuel displaced: Oil $3.80/gal
Full New Hampshire guideMassachusetts offers the most layered incentive structure for bundle projects. You can combine three independent programs:
SMART Solar
$0.03/kWh
20-year performance payments from your utility. An 8 kW system generates ~$240/year.
Mass Save Heat Pump
Up to $10,000
Instant rebate on qualifying cold-climate heat pumps. Income-eligible households get more.
ConnectedSolutions
$275/kW
Add a battery and earn $600-800/year from Eversource demand response.
Note: Unitil territory does not participate in ConnectedSolutions.
Solar + heat pump incentives vary by state, utility, and income. Enter your address to see what you qualify for.
Calculate My Bundle SavingsOver 60% of homes in Maine and New Hampshire heat with oil. At $3.82 per gallon (as of March 2026), a typical home burning 800 gallons per year spends $3,056 annually on heating alone. Here is how the conversion works.
* Assumes solar system is sized to cover total household electricity including heat pump usage. Net metering credits offset the electricity consumed by the heat pump. Actual savings depend on system size, weather, and utility rate structure.
Step 1: 800 gallons x 138,500 BTU/gallon = 110,800,000 BTU of heat demand per year
Step 2: 110,800,000 BTU / 3,412 BTU per kWh = 32,472 kWh of equivalent electric heat
Step 3: 32,472 kWh / 3.0 COP (cold-climate heat pump seasonal average) = 10,824 kWh of electricity needed
Step 4: But the oil boiler is only ~80% efficient. Adjusted: 10,824 x 0.80 / 3.0 = ~3,623 kWh
Step 5: 3,623 kWh x $0.28/kWh = $1,015/year without solar. With solar: $0/year.
Oil price trend: Heating oil in the Northeast averaged $3.20/gal in 2024, $3.55 in 2025, and $3.82 in March 2026. Every $0.50/gal increase adds $400/year to a typical home's heating costs, making the heat pump advantage grow each year.
While the homeowner solar tax credit (25D) is gone, the commercial ITC under Section 48E is still available for projects that begin construction before July 4, 2026. This benefits homeowners indirectly through solar leases and PPAs.
Key distinction: The third-party system owner (the financing company) claims the Section 48E ITC — not the installer, and not the homeowner. This means your lease or PPA rate may be 15-25% lower than it would be without the credit. If you are considering a lease or PPA for the solar portion of your bundle, act before the July 4, 2026 construction deadline.
The right equipment combination depends on your home size, heating fuel, and budget. Here are the most common bundle configurations we install across New England.
Solar
8 kW
Heat Pump
2-zone ductless mini-split
Fuel Replaced
Oil boiler
Annual Savings
$3,000-3,500
Solar
10-12 kW
Heat Pump
3-4 zone ducted + ductless
Fuel Replaced
Oil furnace + AC
Annual Savings
$4,000-4,800
Solar
5-6 kW
Heat Pump
1-2 zone ductless
Fuel Replaced
Propane or electric baseboard
Annual Savings
$2,000-2,500
Solar
12-14 kW
Heat Pump
4-zone whole-home ducted
Fuel Replaced
Gas furnace + gas car
Annual Savings
$5,500-6,500
Start with your current annual electricity usage (check your utility bill for kWh). Then add the heat pump electricity based on your current fuel:
Oil to Heat Pump
Add 3,000-4,500 kWh/yr
+ 2-3 kW solar capacity
Gas to Heat Pump
Add 2,500-4,000 kWh/yr
+ 2-3 kW solar capacity
Propane to Heat Pump
Add 3,500-5,000 kWh/yr
+ 3-4 kW solar capacity
For example, if your home uses 7,000 kWh/year of electricity and you heat with oil (800 gallons), you need a solar system sized for approximately 10,600 kWh — roughly a 9-10 kW system in New England (4.0 peak sun hours).
Cold-Climate Heat Pumps Are Essential
In New England, you need a cold-climate heat pump rated for operation down to -15°F or lower. Standard heat pumps lose significant efficiency below 20°F. Top cold-climate models from Mitsubishi (Hyper-Heat), Fujitsu (XLTH), and Daikin (Aurora) maintain 80%+ capacity at 5°F. Most state rebate programs require cold-climate rated equipment.
You have multiple ways to finance a bundle project. The right choice depends on your state, credit profile, and whether you want to own the solar system or lease it.
| Option | Solar Portion | HP Portion | Pros | Cons |
|---|---|---|---|---|
| Combined solar loan | Included | Included | One payment, often better rate for larger loan | Longer term (20-25 yr), more interest paid |
| Solar loan + HP cash | Loan (5-8% APR) | Cash | Smaller loan balance, HP rebate offsets cash | Need $12K-22K upfront for HP |
| Solar lease + HP loan | Lease/PPA (48E ITC) | Loan or utility program | $0 down for solar, 48E reduces lease rate | You do not own solar, two payment streams |
| CT Smart-E (HP only) | Separate financing | 0.99% APR loan | Lowest HP financing rate in New England | Only available in Connecticut |
Bundling saves $2,000-5,000, but it is not always practical. Here is a decision framework based on your situation.
Phasing tip: If you install the heat pump first, tell your solar installer about the heat pump when you get your solar quote. They need to size the system to cover your new, higher electricity usage. Many homeowners who installed solar before a heat pump find their system is undersized by 20-30%.
A home battery (10-13 kWh) typically costs $10,000-15,000 installed. That is a tough payback without incentives. But in two states, battery programs change the math entirely.
Eversource: $275/kW summer + $50/kW winter
National Grid: $225/kW + $50/kW winter
Annual revenue: $600-800/year
Unitil does not participate. Revenue comes from demand response events (typically 30-60 per summer).
RI Energy: $225/kW summer
Annual revenue: $500-650/year
Plus: $2,000 REF battery adder
Combined with REF solar rebate and ConnectedSolutions revenue, battery payback drops to 10-12 years in RI.
Other states (ME, CT, NH, NJ): No battery incentive programs currently available. A battery still provides backup power during grid outages, but the financial payback is 18-25+ years without incentives. Consider a battery if you experience frequent outages or need medical equipment power backup.
A typical solar + heat pump bundle costs $32,000-52,000 before state incentives. An 8 kW solar system runs $22,000-26,000, and a 2-3 zone heat pump system costs $12,000-22,000. Bundling saves $2,000-5,000 versus doing the projects separately due to shared labor, permitting, and electrical work.
No. The residential solar tax credit (Section 25D) and the heat pump tax credit (Section 25C) both expired on December 31, 2025. There is no federal tax credit available for homeowner-purchased solar or heat pump installations in 2026. State-level incentives are now the primary source of savings.
Yes. Section 48E allows the third-party system owner (the financing company, not the installer) to claim a 30% commercial ITC on solar projects that begin construction before July 4, 2026. This can lower your lease/PPA rate. The homeowner does not claim any tax credit directly.
Switching from oil, gas, or propane to a heat pump typically increases your electricity usage by 30-50%. For a home burning 800 gallons of oil per year, expect roughly 3,600 additional kWh of electricity. At $0.28/kWh, that is about $1,015/year in electricity — far less than the $3,056 you were spending on oil.
Rhode Island has the strongest incentive stack: Clean Heat RI covers 60% of heat pump cost (up to $11,500), the REF program pays $0.65/W for solar (up to $5,000), and the REG program pays $0.27/kWh for 15-20 years. Massachusetts is second with Mass Save HP rebates up to $10,000, SMART solar payments of $0.03/kWh for 20 years, and ConnectedSolutions battery revenue up to $275/kW.
Yes. A heat pump adds 3,000-5,000 kWh/year to your electricity usage. You should size your solar system to cover both your existing usage and the new heat pump load. For most homes switching from oil, this means adding 2-3 kW of extra solar capacity (roughly 5-7 additional panels).
If budget allows, yes. Bundling saves $2,000-5,000 in shared labor, permitting, and electrical panel work. You also get to size the solar system correctly from the start. However, if your heating system is failing urgently, install the heat pump first and plan solar within 12-18 months.
Yes, and it often makes more sense. A single combined loan simplifies payments and may qualify for better terms. In Connecticut, the Smart-E loan offers 0.99% APR for heat pumps. Some installers offer combined project financing through solar-specific lenders. You can also finance each project separately if needed.
Payback varies by state and fuel displaced. In oil-heated homes in Maine, Rhode Island, or Connecticut, bundle payback is typically 9-12 years. In gas-heated homes in Massachusetts or New Jersey, payback is 11-14 years. New Hampshire, with fewer state incentives, sees 13-15 year payback. These calculations assume no federal tax credit.
It depends on your state. In Massachusetts and Rhode Island, ConnectedSolutions pays $225-275/kW for demand response, making batteries financially attractive ($600-800/year revenue). In states without battery incentive programs, the economics are harder to justify unless you need backup power during outages.
Solar + HP Bundle: Worth It?
Cost breakdown and decision framework
MA Solar + Heat Pump
SMART, Mass Save, and ConnectedSolutions
ME Solar + Heat Pump
Efficiency Maine + NEB net metering
RI Solar + Heat Pump
Clean Heat RI + REF + ConnectedSolutions
CT Solar + Heat Pump
Smart-E loan + Energize CT rebates
NH Solar + Heat Pump
NEM 2.0 and honest savings analysis
Heat Pump vs Gas Furnace
Running cost comparison with current rates
Heat Pump Below Zero
Cold-climate performance at -15°F
Whole Home Electrification
Full roadmap: solar, HP, battery, EV
Solar For Heat Pump Calculator
Size your solar to cover HP electricity
Battery Storage Cost 2026
Home battery pricing and payback
Solar Without Tax Credit
Why solar still works with $0 ITC
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Elena helps homeowners plan whole-home electrification projects — solar, heat pumps, batteries, and EV charging. She focuses on financing strategies and long-term energy savings.