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Vermont heat pump systems cost $3,500-$22,000 before EVT rebates. After the EVT rebate ($2,200 for ducted, $475/head for ductless) and potential income bonuses (GMP $2,000, VPPSA $1,000), your net cost drops significantly. With oil at $3.96/gal and propane at $3.77/gal, annual savings of $2,200-$2,500 make the payback period remarkably short.
Before Rebates
$3.5K-$22K
By system type
EVT Rebate (Ducted)
$2,200
Per system
Annual Savings vs Oil
$2,200+
Oil at $3.96/gal
Installed costs vary by system type, number of zones, and whether your home has existing ductwork. All prices reflect Vermont market rates as of early 2026. Cold-climate rated equipment is mandatory for all VT installations.
| System Type | Cost Range | EVT Rebate | Net Cost* |
|---|---|---|---|
Single Zone Ductless Mini-Split One indoor head, one outdoor unit. | $3,500-$7,000 | $475 | $3,025-$6,525 |
Multi-Zone Ductless (2–3 heads) 2–3 indoor heads on one outdoor unit. | $8,000-$14,000 | $1,188 | $6,812.5-$12,812.5 |
Multi-Zone Ductless (4–5 heads) 4–5 indoor heads for whole-home coverage. | $14,000-$22,000 | $2,138 | $11,862.5-$19,862.5 |
Ducted Central Heat Pump Uses existing or new ductwork. | $12,000-$20,000 | $2,200 | $9,800-$17,800 |
Hybrid / Dual-Fuel System Heat pump paired with existing oil/propane boiler or furnace as backup. | $8,000-$15,000 | $2,200 | $5,800-$12,800 |
*Net cost assumes standard EVT rebate only. Income-eligible GMP customers may receive an additional $2,000 condenser bonus + $1,200 EVT income voucher. VPPSA customers: +$1,000.
Heat pump installation costs vary across Vermont based on local installer competition, utility service area, and housing stock.
| City | Utility | Avg Cost | Range | Notes |
|---|---|---|---|---|
Burlington | BED | $10,500 | $4,000-$18,000 | Burlington Electric Department (BED) area. |
Essex | GMP | $11,000 | $4,200-$19,000 | GMP service area. |
Rutland | GMP | $10,000 | $3,800-$17,000 | GMP service area. |
Barre | GMP | $9,500 | $3,500-$16,500 | GMP service area. |
South Burlington | GMP | $11,500 | $4,500-$19,500 | GMP service area. |
Bennington | GMP | $9,800 | $3,700-$17,000 | GMP service area. |
Brattleboro | GMP | $10,200 | $3,800-$17,500 | GMP service area. |
Montpelier | GMP | $10,800 | $4,000-$18,500 | GMP service area. |
Vermont has some of the highest heating costs in the country. With 35% of homes on oil and 20% on propane, the savings from switching to a heat pump are substantial. Wood/pellet heating (15% of homes) is unique to northern New England.
| Fuel Type | Price | Annual Cost | CO2 (tons/yr) | VT Home Share |
|---|---|---|---|---|
| Heating Oil | $3.96/gallon | $3,200 | 6.1 | 35% |
| Propane | $3.77/gallon | $3,400 | 5.5 | 20% |
| Natural Gas | $1.48/CCF | $1,800 | 4.2 | 15% |
| Wood/Pellet | $280/cord | $1,400 | 0.2 | 15% |
| Electric Resistance | $0.22/kWh | $4,200 | 0.1 | 5% |
| Heat Pump (GMP rate) | $0.2146/kWh | ~$1,009 | ~0.1 | Growing |
$2,191/yr
Savings vs Oil
$2,391/yr
Savings vs Propane
$3,191/yr
Savings vs Electric Resistance
Use our calculator to estimate your annual savings from switching to a heat pump based on your current fuel source and electric utility.
35% of VT homes use heating oil for heating (~800 gallons/year)
Note: Vermont imports 100% of its fossil fuels — no in-state oil, gas, or propane production. Every dollar spent on fossil fuel heating leaves the VT economy. Switching to a heat pump keeps energy dollars local.
GMP Time-of-Use rates available: Off-peak $0.1452/kWh, Peak $0.3407/kWh. Running your heat pump during off-peak hours can reduce costs further.
Includes 3% annual fuel escalation, 2.5% electric escalation
Vermont's grid is ~95% carbon-free (hydro, nuclear, wind, solar). Switching from heating oil to a heat pump nearly eliminates your heating carbon footprint.
Based on VT fuel prices as of February 2026 (oil $3.96/gal, propane $3.77/gal). Heat pump assumes seasonal COP ~2.5 for VT cold climate, ~4,700 kWh annual usage for a typical 2,000 sqft home. Electric rate based on GMP at $0.2146/kWh.
There is $0 federal tax credit for heat pump purchases in 2026. EVT rebates + utility income bonuses are your primary incentives. The HEAR program ($29.2M) is pending and not yet available.
Vermont requires cold-climate rated equipment for all installations. This adds $500-$1,500 compared to standard models, but ensures reliable heating at -10F to -15F design temperatures. EVT rebates require this certification.
Older Vermont homes (pre-1970) often have poor insulation and high heating loads. A 2,000 sqft home may need 3-5 tons depending on insulation quality. Manual J load calculations are essential for proper sizing.
Many older VT homes have 100-amp panels that may need upgrading to 200 amps ($1,500-$3,000). Heat pumps require a dedicated 30-50 amp circuit. Homes built after 1990 with 200-amp service typically do not need upgrades.
Homes with existing ductwork can use a ducted system ($12K-$20K) which is often more cost-effective per zone. Without ducts, ductless mini-splits ($3.5K-$22K) are the practical choice. Many Vermont farmhouses lack ductwork.
A typical Vermont heat pump system costs $3,500-$22,000 before rebates depending on system type. Single-zone ductless mini-splits start at $3,500, multi-zone ductless systems run $8,000-$22,000, and ducted central systems cost $12,000-$20,000. After the EVT rebate ($2,200 for ducted, $475/head for ductless), costs decrease significantly.
A ducted heat pump costing $12,000-$20,000 receives a $2,200 EVT rebate, bringing the net cost to $9,800-$17,800 for standard-income households. Income-eligible GMP customers can also receive a $2,000 condenser bonus, reducing net cost to $7,800-$15,800. Additional EVT income vouchers ($1,200) may apply.
Costs vary due to local installer competition, labor rates, travel distances, and utility service areas. Burlington (BED area) averages $10,500 with the lowest electric rates but no income bonus. South Burlington (GMP) averages $11,500 but has access to the $2,000 income bonus. Rural areas may have slightly lower labor costs but fewer installer options.
A typical VT home burning oil at $3.96/gal spends about $3,200/year on heating. A heat pump costs approximately $1,009/year to operate at the GMP rate of $0.2146/kWh, saving roughly $2,191 annually. Over 10 years with fuel price escalation, total savings exceed $25,000.
No. The federal Section 25C Energy Efficient Home Improvement Credit expired on December 31, 2025 under the OBBBA. There is no federal tax credit for residential heat pump purchases in 2026. EVT rebates and utility income bonuses are now the primary incentives in Vermont.
A typical installation includes the indoor and outdoor equipment, refrigerant line sets, electrical wiring, condensate drainage, a smart thermostat, permits, and labor. Vermont installations may also require cold-climate rated equipment (mandatory) and possibly electrical panel upgrades for older homes.
Hybrid systems ($8,000-$15,000) pair a heat pump with your existing oil/propane boiler or furnace as backup. In Vermont with design temps of -10F to -15F, a hybrid can be a practical transition strategy for older homes. The heat pump handles heating down to the balance point temp, then the fossil fuel backup kicks in for the coldest days.
Wood/pellet heating costs about $1,400/year (5 cords at $280/cord) compared to $1,009/year for a heat pump. The savings are modest ($391/year), but heat pumps offer the advantage of air conditioning, no ash/maintenance, automatic operation, and lower emissions. Vermont has 15% of homes on wood/pellet — the highest in New England.
EVT rebates + utility income bonuses.
Models rated to -15F for VT.
Oil at $3.96/gal vs heat pump savings.
Propane at $3.77/gal comparison.
EVT contractor requirements.
Utility rate comparison.
NuWatt Energy helps Vermont homeowners find the right heat pump system at the best price. With EVT rebates and utility income bonuses, your net cost could be thousands less than you expect.