Incentives are available for four main types of heat pumps (ductless, ducted, air-to-water, and ground source). State incentives range from $750 – $21,500, depending on heat pump size, type, and income level. In addition, the Inflation Reduction Act includes incentives for heat pumps of up to $8,000 depending on income and project cost, as well as a 30% tax credit up to $2,000. There is an additional federal tax credit of 30% up to $600 to upgrade your electrical panel if done in combination with a heat pump installation.

Ductless heat pumps

Efficiency Vermont and Green Mountain Power offer combined incentives of up to $1,450 per condenser, depending on income level and condenser size. Additional federal incentives of up to $10,000 will be available through the Inflation Reduction Act.

State Incentives

  • 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’s upfront distributor incentive is $400 per condenser.
  • Green Mountain Power provides up to an additional $600 depending on income. 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.
  • Green Mountain Power offers free Sensibo devices to customers with heat pumps. These devices allow you to control your heat pump with a phone app.

Federal Incentives

Available January 2023

  • 30% up to $2,000 tax credit per year for heat pumps.
  • Additional 30% up to $600 tax credit available for electrical panel upgrade if combined with heat pump installation.

Coming soon! Available by August 2024

Ducted Heat Pumps

Efficiency Vermont and Green Mountain Power offer combined incentives of up to $2,400 per condenser, depending on income level and condenser size. Additional federal incentives of up to $10,000 will be available through the Inflation Reduction Act.

State Incentives

  • Efficiency Vermont offers between $1,000-$2,000 per condenser, depending on the size of the unit.
  • Green Mountain Power’s upfront distributor incentive is $400 per condenser.
  • Green Mountain Power provides up to an additional $600 depending on income. This is a rebate that homeowners need to apply for here.

Federal Incentives

Available January 2023

  • 30% up to $2,000 tax credit per year for heat pumps.
  • Additional 30% up to $600 tax credit available for electrical panel upgrade if combined with heat pump installation.

Coming soon! Available by August 2024

Ground Source Heat Pumps (Geothermal)

Efficiency Vermont offers up to $21,500 in incentives, depending on equipment size and income level. Potential for additional federal incentives of up to $10,000 through the inflation Reduction Act, depending on eligibility of ground source heat pumps.

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

As of November 2022, it is not clear whether ground source heat pumps are eligible for the following incentives.

Available January 2023

  • 30% up to $2,000 tax credit per year for heat pumps
  • Additional 30% up to $600 tax credit available for electrical panel upgrade if combined with another heat pump installation.

Coming soon! Available by August 2024