Heat Pumps (Space Heating)
Incentives for installing heat pumps vary significantly depending on the type of equipment you plan to install and your household income. In years past, most incentives came in the form of tax credits or reimbursements, but new legislation has enabled point-of-sale rebates that can be deducted directly from the total project cost by contractors.
Air-Source Heat Pumps
State Incentives
Ductless Heat Pumps
- Efficiency Vermont offers between $350-$450 per condenser, depending on the size of the unit. This incentive is applied upfront by the distributor.
- Green Mountain Power provides income-qualified customers with an additional rebate of up to $2,000. This is a rebate that homeowners need to apply for here.
- Efficiency Vermont also provides up to $600 cash back for integrated controls for ductless heat pumps that meet eligibility requirements.
Ducted Heat Pumps
- Efficiency Vermont offers between $1,000-$2,000 per condenser, depending on the size of the unit.
- Green Mountain Power provides income-qualified customers with an additional rebate of up to $2,000. This is a rebate that homeowners need to apply for here.
Air-to-Water Heat Pumps
- Efficiency Vermont offers up to $6,000 for air-to-water systems ($1,000 per ton, up to 6 tons), plus an additional $500 bonus for income-eligible households. Customers must work with a pre-qualified contractor to be eligible.
Federal Incentives
- 30% up to $2,000 tax credit per year for heat pumps.
- 30% up to $600 tax credit available for electrical panel upgrade if combined with heat pump installation.
- The High Efficiency Electric Home Rebate Act (HEEHRA) covers 100% of project costs up to $8,000 for low-income households (less than 80% AMI) and 50% of project costs for moderate-income households (80-150% of AMI). The State of Vermont is still developing its HEEHRA program. It is expected to open in late 2024 or early 2025. You can get updates on the program here.
Ground-Source Heat Pumps (Geothermal)
State Incentives
- Efficiency Vermont offers $2,100/ton, up to 10 tons, for eligible ground source heat pump installations. An additional $500 is available through Efficiency Vermont for income-eligible customers.
Federal Incentives
- 30% up to $2,000 tax credit per year for heat pumps.
- 30% up to $600 tax credit available for electrical panel upgrade if combined with heat pump installation.
- The High Efficiency Electric Home Rebate Act (HEEHRA) covers 100% of project costs up to $8,000 for low-income households (less than 80% AMI) and 50% of project costs for moderate-income households (80-150% of AMI). The State of Vermont is still developing its HEEHRA program. It is expected to open in late 2024 or early 2025. You can get updates on the program here.
Updated March 2024