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Understanding the Federal and State Incentives for Geothermal Heat Pumps

Everything you need to know about geothermal heat pump incentives

What Federal, State, and Utility incentives apply to you as a homeowner?

In 2018, Department of Energy passed a Federal Tax Incentive for geothermal ground source heat pumps called the Investment Tax Credit (ITC). In the form of personal tax credits, these incentives save Dandelion customers thousands of dollars.

As a New York State homeowner, you qualify for the New York State Energy Research and Development Authority (NYSERDA) New York State Clean Heat Program. The State of New York and the 6 electric utilities that serve New York State have allocated substantial funding for ground source heat pump installations. Dandelion is an approved Participating Contractor in the program.

As a Connecticut homeowner you can qualify for DEEP (Department of Energy and Environmental Protection) geothermal heat pump incentives. Connecticut homeowners can qualify for $1,000s in geothermal incentives. Details are listed below.

Federal Tax Credit
Investment Tax Credit (ITC)
26% off the price of the system in 2021 & 2022, and 22% off the system price in 2023.
NY State Incentive
New York Rebates depend on your location and utility provider.
Scroll down to see what incentives you are eligible for.
CT State Incentive
Incentives vary depending on your heating fuel source.
Scroll down to see what incentives you
qualify for.
MA State Incentive
Oil or Propane customers are eligible for the Mass Save program
Scroll down to read about the program.
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Why is sooner better than later?

In 2021 and 2022, the federal tax incentives known as the Investment Tax Credit (ITC) will cover 26% of a Dandelion geothermal system. However, the percentage covered by the ITC will decrease to 22% in 2023, and 0% in 2024.

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How do the incentives work?

Select your location below:
New YorkNY
ConnecticutCT
MassachusettsMA

New York State's Clean Heat Program is administered by the homeowner’s utility. Let’s go over some important details to explain how these incentives are allocated.

Each utility has a unique incentive.

That means a homeowner who uses Con Edison will qualify for a different incentive amount than a homeowner who uses National Grid.

The incentive amounts are based on the installed heat pump’s total heating capacity BTUH.

Utility incentives range between $0.15 per BTUH and $0.50 per BTUH, depending on the utility.
That means a homeowner who uses Con Edison will qualify for a different incentive amount than a homeowner who uses National Grid.
Utility incentives range between $0.15 per BTUH and $0.50 per BTUH, depending on the utility.
Many, but not all, heat pumps installed by Dandelion include a desuperheater ─ a component that uses existing heat in the system to warm water.

This incentive is either $100 or $150 per heat pump, no matter its BTUH, depending on the utility.
Let’s dive into each utility’s incentives available to you by your utility after you install a new geothermal heat pump system in your home.
Utility
Geothermal
Heat Pump
5 Ton Heat Pump
47,900 BTUH
Central Hudson
$0.20/BTUH
$9,580
Con Edison
$0.50/BTUH
$23,950
National Grid
$0.15/BTUH
$7,185
NYSEG / RGE
$0.15/BTUH
$7,185
Orange & Rockland
$0.20/BTUH
$9,580
Here's what you're entitled to as a Long Island homeowner.

PSEG Long Island rebate is based on the COP and EER of the unit. Long Island homeowners who install a typical 4 ton system (48,000 BTU) in a 2500 sq ft home get an $8,383 rebate for a new Dandelion Geothermal system. Rebates are capped at 70% of project cost.

The rebate program requires a pre-inspection and post-inspection step at the customer's home. Dandelion has built this into the installation timeline to ensure all rebate requirements are met.

Below is a list of the PSEG rebate based on system size:



System Size
Model #
Rebate
Split System 3T
BT036
$6,150
Split System 4T
BT048
$8,383
Split System 5T
BT060
$10,183
Packaged Unit 4T
YT048
$8,383
Packaged Unit 5T
YT060
$10,717
Packaged Unit 6T
YT072
$11,983
Here's what you're entitled to as a Connecticut homeowner.

Both Eversource and United Illuminating offer geothermal heat pump incentives via the Energize Connecticut program (The following municipal utilities are not part of the Energize Connecticut program; Groton, Bozrah, Norwalk, Wallingford, and Norwich).

The Connecticut incentives are limited to $15,000 per household, or 10 tons worth of geothermal heat pumps. See the table below for an example of what an average sized home that needs a 5 ton geothermal heat pump system would qualify for in Connecticut.



Heating Fuel
Incentive / ton
5 Ton Heat Pump
Fuel Oil
$1,500
$7,500
Propane
$1,500
$7,500
Natural Gas
$750
$3,750
Electric Resistance
$750
$3,750
Here's what you're entitled to as a Massachusetts homeowner.

With Mass Save incentives, MA homeowners who install a typical 4 ton system (48,000 BTU) in a 2500 sq ft home get an $8000 rebate for a new Dandelion Geothermal system. Projects are capped at a total incentive of $15,000. Geothermal systems are also exempt from state sales tax.

There are additional rebates available through the Alternative Energy Portfolio Standard for reducing greenhouse gas emissions that range from $400-$1,200/year for up to 10 years.

However, homeowners cannot take advantage of both. They are only eligible for either the Mass Save rebate or the Alternative Energy Portfolio Standard.

Unfortunately, homeowners who use natural gas to heat their homes are not eligible for a Mass Save rebate at this time.



Primary Fuel Type
Rebate Amount
Maximum Rebate
Oil or Propane
$2,000 per ton
$15,000
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