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Heat pump water heaters use 60-70% less electricity than standard electric water heaters. Mass Save offers a $750 rebate for all homeowners, and income-eligible households can get one installed for free. Plus, the remaining cost qualifies for 0% HEAT Loan financing.
Last updated February 2026 | Federal 25C tax credit EXPIRED Dec 31, 2025
A heat pump water heater (HPWH) extracts heat from the surrounding air and transfers it to your water tank -- the same principle as a heat pump for your home, but applied to hot water. Instead of generating heat directly with an electric element, it moves existing heat, which is dramatically more efficient.
The result: 60-70% less electricity to heat the same amount of water. Most units also include a backup electric element for high-demand periods. As a bonus, they produce cool, dehumidified air -- a welcome side effect in a Massachusetts basement during summer.
60-70% less electricity
vs standard electric water heater
Dehumidifies your basement
Pulls moisture from air as it heats water
Same hot water output
Backup element for peak demand
UEF 3.0-3.75
Compared to ~0.95 for standard electric
All models below meet Mass Save requirements (UEF 2.0+) and are eligible for the $750 rebate.
| Brand / Model | UEF | Capacity | Price Range | Best For |
|---|---|---|---|---|
Rheem ProTerra Hybrid | 3.75 | 50, 65, 80 gal | $1,600–$2,400 | Best overall choice — highest UEF, best smart features |
A.O. Smith Voltex Hybrid | 3.5 | 50, 66, 80 gal | $1,500–$2,200 | Most widely available — strong contractor familiarity |
Bradford White AeroTherm | 3.45 | 50, 80 gal | $1,400–$2,100 | Budget-conscious choice with solid reliability |
Stiebel Eltron Accelera 300 E | 3.39 | 80 gal | $2,800–$3,500 | Premium quality — quietest option, ideal for conditioned spaces |
Install: $800–$1,500 | Refrigerant: R-134a
Install: $800–$1,500 | Refrigerant: R-134a
Install: $800–$1,500 | Refrigerant: R-134a
Install: $800–$1,500 | Refrigerant: R-134a
Households at or below 60% of State Median Income (or enrolled in a utility discount rate) can receive a heat pump water heater at no cost through Mass Save. Equipment, installation, and any necessary electrical work are fully covered. Contact Mass Save at 866-527-7283 to check eligibility.
In many cases, NuWatt applies the $750 Mass Save rebate directly to your invoice — you pay the net cost and we handle the rebate submission.
How much you save depends on what you are replacing. The biggest savings come from replacing electric resistance water heaters.
HPWH uses 60-70% less electricity than standard electric water heater
Savings depend on gas vs electric rate. At MA rates ($0.28/kWh, $1.85/therm), modest savings.
Eliminates oil-fired water heating. No more fuel deliveries for hot water.
Heat pump water heaters require slightly more space and infrastructure than standard water heaters. Here is what your home needs.
Same as an electric dryer. Most homes have capacity, but panel space must be verified.
Standard basement, garage, or utility room works. Cannot be in a small closet.
HPWH produces condensation — needs a floor drain or condensate pump.
HPWH extracts heat from surrounding air. Produces cool, dehumidified air — great in summer, minor heating penalty in winter.
Most models 45-55 dB (comparable to a dishwasher). Stiebel Eltron quietest at 37 dB.
Standard 3/4" connections. Same as existing water heater in most cases.
After the $750 Mass Save rebate, you can finance the remaining balance at 0% interest through the HEAT Loan. Here is what that looks like for a typical installation.
7yr (below 135% SMI)
$17/mo
5yr (135-300% SMI)
$24/mo
3yr (above 300% SMI)
$40/mo
At 0% interest, you repay exactly what you borrow. No origination fees, no hidden costs. HPWH qualifies under the HEAT Loan program alongside heat pumps, insulation, and other efficiency improvements. Payments reflect $1,450 financed.
NuWatt submits both the HPWH rebate and HEAT Loan application together. One appointment, one set of paperwork.
To qualify for the $750 Mass Save rebate, your heat pump water heater must meet these requirements.
Must be on Mass Save Qualified Product List
Uniform Energy Factor (UEF) ≥ 2.0
Must replace an existing water heater (not new construction)
Installation by a licensed plumber
Home Energy Assessment recommended (but NOT always required for HPWH-only installs — check with your utility)
The Section 25C energy efficiency tax credit expired December 31, 2025. There is no federal tax credit for heat pump water heaters in 2026. The Mass Save $750 rebate is your primary incentive. Income-eligible households may qualify for enhanced Mass Save coverage.
It depends on your utility. Eversource and National Grid generally recommend but don't always require an assessment for standalone HPWH installations. Call 866-527-7283 to confirm for your specific utility.
A HPWH extracts heat from surrounding air to heat water. In summer, this provides free dehumidification and cooling — a bonus. In winter, it may lower basement temperature by 2-5°F. In a typical MA basement, this is usually not a problem, but in a conditioned space, you'll use slightly more heating energy.
Most models run 45-55 decibels — similar to a dishwasher or quiet conversation. The Stiebel Eltron Accelera is the quietest at 37 dB. Locate it away from bedrooms if noise is a concern.
Yes. Get the $750 Mass Save rebate, then finance the remaining cost ($650-$3,750) with a 0% HEAT Loan. Monthly payments on a $2,000 remaining balance: $24/mo (7yr), $33/mo (5yr), or $56/mo (3yr).
The Section 25C energy efficiency tax credit expired December 31, 2025. There is NO federal tax credit for heat pump water heaters in 2026. The Mass Save $750 rebate is your primary incentive.
General rule: 50 gallons for 1-2 people, 65 gallons for 2-3 people, 80 gallons for 3+ people. HPWHs recover more slowly than gas, so sizing up is recommended. When in doubt, go 80 gallons.
A heat pump water heater cuts your water heating costs by 60-70%. With the $750 Mass Save rebate and 0% HEAT Loan, the upgrade pays for itself in 3-5 years. Income-eligible households pay nothing.
All installations include Mass Save rebate processing. Licensed plumber. QPL-verified equipment.