Heat Pumps (Space Heating)

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 (Not available as of November 2022; will be available by August 2024)

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

• 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).
• Whole Home Energy Reduction Rebates (HOMES) – rebates for the lesser of $8,000 or 80% of project cost if the project reduces energy usage by at least 35%. UNCLEAR WHETHER HEAT PUMPS ARE ELIGIBLE PROJECT COST.

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 (Not available as of November 2022; will be available by August 2024)

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

• 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).
• Whole Home Energy Reduction Rebates (HOMES) – rebates for the lesser of $8,000 or 80% of project cost if the project reduces energy usage by at least 35%. UNCLEAR WHETHER HEAT PUMPS ARE ELIGIBLE PROJECT COST.