Looking for an easy-to-understand guide on Massachusetts energy rebates and federal tax credits for home efficiency upgrades?
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Use the links below to jump to the programs you’re most interested in.
If this is your first time here, we’d like to introduce ourselves before we get started: We’re NuWatt Energy, and we help you make your homes more comfortable and energy-efficient year-round.
Thankfully, there are plenty of Massachusetts energy rebates, and even new federal incentives, to help you conserve energy at home—all while making your home feel better, no matter what the weather brings. (Here's looking at you, winter!)
Okay, first things first: How do home energy rebates work?
And how can using a rebate to make home upgrades affect your average cost of utilities?
Getting a rebate for an energy-efficient home upgrade, like replacing your 20-year-old HVAC system with a heat pump, saves you money on your home appliance or service purchase. Then the upgrades themselves go to work by reducing your overall energy usage.
And often these home improvements can cut your usage significantly, especially when you invest in upgrading your home’s energy storage, getting professional EV ports installed, or replacing older appliances with energy-efficient ones.
Selecting the ideal air source heat pump system requires a holistic approach considering factors beyond mere efficiency. Factors such as your home's size, layout, and regional climate must be considered to ensure optimal performance and comfort. Partnering with our experienced professionals ensures that you make an informed decision that aligns with your unique needs, maximizing the long-term benefits of your investment.
What are the best federal tax credits and rebates available?
If you own your home and want to reduce your carbon footprint, the government offers the largest tax incentives for qualifying HVAC equipment by opting for heat pumps. Starting in 2023, you are eligible for a federal tax credit covering 30% up to $2,000 of the heat pump cost and installation. This tax credit is capped at $2,000 per year.
It is recommended to spread out home improvements over several years to take advantage of annual aggregate limits. For example, optimizing attic insulation before getting a new air source heat pump is wise to avoid paying for excessive heating and cooling. Upgrading insulation and heat pump together in the same year can qualify you for a tax credit of up to $1,200 for insulation and up to $2,000 for the heat pump. You can combine a heat pump installation with window or door replacements to maximize your tax credits. Replacing your water heater the following year can benefit from an additional 30% tax credit of up to $2,000. You may also qualify for up to $600 in tax credits if you need an electric panel upgrade to accommodate the new water heater.
Energy efficiency requirements apply to split and packaged systems.
However, it's important to note that this credit only applies if the heat pump is installed to service an existing primary residence and not for new constructions or rentals. Annual aggregate and credit limits apply to claims for home equipment and improvement. You can claim up to $3,200 in efficiency tax credit in one year, the total annual limit.
Why Massachusetts' home energy rebates are so helpful
When you’re ready to make your home more efficient, energy rebates can help save you money on qualifying home upgrades.
The Massachusetts Department of Energy Resources (DOER) created the Mass Save program. The Department exists to develop and implement policies and programs to ensure the adequacy, security, diversity, and cost-effectiveness of the Commonwealth's energy supply to create a clean, affordable, equitable, and resilient energy future for all residents, businesses, communities, and institutions.
What's even more enticing is the array of rebates and tax credits offered by Massachusetts to incentivize the adoption of these eco-friendly systems. This tax credit is effective for products purchased and installed between January 1, 2023, and December 31, 2032.
Homeowners can apply for MA energy rebates directly through their utility company. You’ll fill out an application directly with your utility, and they’ll send you the rebate money once processed.
There are a few ways to find rebates for MA electric companies and gas utility providers:
- See lists of Massachusetts energy rebates below in this article
- Discover Energy Star rebates using the Energy Star Rebate finder tool
- Get in contact with your utility company directly
Many utility companies in Massachusetts are incentivized—and even required—to reduce the energy their customers use. So, they offer rebates to encourage you to upgrade your house to reduce your energy usage. It’s a win for everyone!
At NuWatt Energy, we can help you get important upgrades that make your home more comfortable, healthy, and efficient. (And you can use your local energy rebates, too.) Learn how.
When you’re ready to make your home more efficient, energy rebates can help save you money on qualifying home upgrades.
Massachusetts Sales Tax Exemption
According to the Mass.gov Guide on Sales and Use Tax under the topic Sales and Use Tax Exempt Items-Home & Household Items: “Equipment directly related to solar, wind-powered or heat-pump systems (if the system is used as a primary or auxiliary power system for heating or supplying a taxpayer’s principal residence in Massachusetts)” is exempt from Massachusetts sales tax. In our experience, most Massachusetts HVAC installers do not charge sales tax, which is consistent with this exemption.[2]
Mass Save® program rebates
Many Massachusetts homeowners don’t like utility upgrades and home energy assessments because they expect these to be quite expensive. The last thing that could cross their minds is the word “free,” but the Mass Save® program changes everything.
What's even more enticing is the array of rebates and tax credits offered by Massachusetts to incentivize the adoption of these eco-friendly systems. This tax credit is effective for products purchased and installed between January 1, 2023, and December 31, 2032.
Here’s a quick list of Mass Save rebates (we’ll look at some of them in-depth below!):
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Air Source Heat Pumps
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Ground Source Heat Pumps
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Heat Pump Water Heaters
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Integrated Controls
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Gas Heating & Water Heaters
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Oil Heating & Water Heaters
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Propane Heating & Water Heaters
- Smart & Programmable Thermostats
- Home Insulation
- ENERGY STAR® Certified Windows
- Clothes dryers
- Clothes washers
- Dehumidifiers
- Induction Stove
- Lawn Equipment
- Pool Pumps
- Dehumidifier Recycling
- Refrigerator & freezer recycling
- Room air cleaners
- Room air conditioners
- Shower fixtures
- Advanced power strips
The Mass Save® Advantage Rebates
Customers of Berkshire Gas, Cape Light Compact, Eversource, Liberty Utilities, National Grid, and Unitil can benefit from rebates on qualifying air source heat pumps through Mass Save®, administered by MassCEC. The installation of the equipment must take place between January 1, 2023, and December 31, 2023.
Residents in Massachusetts can rely on the Mass Save® program to lower utility costs and improve energy efficiency. At NuWatt, we offer free home energy assessments, energy-saving advice, and connect you to incentives through partnerships with utility companies and energy providers.
- Whole-home rebates are available to customers who install heat pumps as the sole heating and cooling source. See the Whole-Home Heat Pump Verification Form for details. Homes must be sufficiently weatherized before heat pump installation, and appropriate heat pump verification forms for Mass Save must be completed and signed.
- Partial-home rebates are offered based on equipment size (tonnage) to customers who plan to keep an existing boiler or furnace to supplement a new heat pump system. An integrated control from the Mass Save Integrated Control Qualified Product List must be installed in homes with a pre-existing propane, oil, or natural gas heating type.
ConnectedSolutions Program incentives
Mass Save offers incentives for ENERGY STAR certified clothes dryers, pool pumps, dehumidifiers, and room air conditioners. Through Mass Save, homeowners, renters, or small business owners can earn incentives from ConnectedSolutions by using their connected devices to help reduce electric use during periods of high energy demand. During high energy demand periods, more households use energy. Adopting energy-efficient technologies like heat pumps can reduce bills by 20% annually and cut carbon emissions by up to 50%. A family can prevent up to 5.6 metric tons of carbon dioxide emissions annually by using a heat pump, equivalent to driving 13,000 miles [3].
Earn a $50 enrollment incentive and a $20 annual incentive for every thermostat connected to a central air conditioner.
If you’re an Eversource Electric, National Grid Electric, Unitil Electric, or Cape Light Compact customer, this section is for you! If you enroll your thermostat in ConnectedSolutions, your thermostat will receive a notice to precool your home before a peak demand event and then increase your thermostat setting by no more than four degrees during peak demand.
All peak events during the summer between June 1 and September 30 will occur on non-holiday weekdays between 2:00 - 7:00 p.m. You have full control over your thermostat and can opt out of an event at any time by adjusting it.
(Need help upgrading your home's energy efficiency? Schedule a free call with a Nuwatt expert for advice.)
Get a high-performance heat pump installed with no hidden costs if your house qualifies
Building or renovating smart home rebates
Mass Save® provides rebates for ENERGY STAR certified homes. If your home meets certain requirements for new construction, your builder can provide certification. ENERGY STAR homes use up to 30% less energy than typical new homes and even less when compared to most resale homes.
The Residential New Construction program is the only option for those seeking incentives for new construction projects. It's important to note that individual equipment rebates are not available through the Mass Save Heating & Cooling programs. To qualify for incentives, your home must meet the minimum energy savings requirements and be compared to the average new home in Massachusetts in terms of electric savings, fuel savings (natural gas, propane, or oil), and overall performance.
ake advantage of incentives for incorporating energy-efficient upgrades into your home renovation or addition projects.
National Grid Offer for Nantucket Residents
Whether you’re a Nantucket homeowner, renter, or landlord, National Grid offers services and incentives that will help you make your home more energy-efficient.
You could receive no-cost energy-saving products delivered to your door, 75% or more off approved insulation, no-cost air sealing for year-round comfort, and additional rebates toward qualifying energy-efficient equipment.
Income-based help with home utility costs
Check out the following resources for income-based help with your energy bill costs in Massachusetts.
As of August 2022, Mass Save launched Enhanced Heating & Cooling Equipment Rebates, increasing the rebate available to $16,000 if you live in a one to four-unit home, your household income meets certain eligibility requirements, and you’re replacing an existing oil, propane, or electric resistance system with heat pumps.
To learn more about eligibility criteria, select from the below:
You may still be eligible for a no-cost Home Energy Assessment and products like advanced power strips and more.
Heat pump installation in MA
If you’re ready to upgrade your HVAC through energy rebates, electric air-source heat pumps are the way to go.
Heat pumps consist of an outdoor unit connected to one or more indoor units by a line set, which carries heat between the two. Instead of burning fossil fuels, these highly efficient systems are powered by electricity to move - rather than create - heat to keep your home at a comfortable temperature year-round. Today's cold climate heat pumps can be up to 400% efficient, and many provide efficient heating at outdoor temperatures as low as -15°F.
A heat pump runs on electricity to cool your home in summer and heat your home in the winter. It’s a two-for-one HVAC appliance, whisper quiet, runs on clean energy, and can be installed without existing ductwork if needed. Learn more about how a heat pump works.
And you can get heat pump installation in Massachusetts and surrounding areas with no hidden costs with NuWatt Energy. (Remember, you can still use your local and federal rebates!)
Take advantage of Massachusetts energy rebates: NuWatt Energy makes your home upgrades hassle-free
Ready to increase your home’s energy efficiency and comfort? NuWatt Energy is the better way to get home energy improvements—and we’ll help you figure out which MA energy rebates you can apply to your home upgrades.
If you happen to live in a qualifying area in Massachusetts, you have the chance to get a heat pump set up with a payment plan that works for you. Plus, you can choose to add energy storage and solar systems that are professionally installed and backed by a guarantee of energy-savings.
We stand by our work. We’re the first company to offer home solar and energy efficiency upgrades this way. Learn more.
