The Guide to Federal, State, and Utility 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?

Geothermal, or ground source heat pumps, are the most energy-efficient way to heat and cool your home and greatly reduce your energy bills and reliance on fossil fuels.

With $1000s in rebates available from the federal government, states, and utilities, it's never been easier—or more affordable—to switch to the most efficient and eco-friendly technology available.

Below you'll find detailed information on geothermal incentives available across the Northeast.

Federal Tax Credit

Investment Tax Credit (ITC)

30% off the system price from now till 2032.

NY State Incentive

NY homeowners are eligible for a 25% State tax credit up to $5,000 plus $1000s in additional incentives from their utility provider.

Scroll down to see what incentives you are eligible for.

CT State Incentive

With EnergizeCT incentives, CT homeowners qualify for up to $15,000 in incentives.

Scroll down to see what incentives you
qualify for.

MA State Incentive

With MassSave incentives, MA homeowners with propane, fuel oil, or natural gas qualify for up to $15,000 in incentives

Scroll down to read about the program.

Learn More

Why geothermal is more affordable now than ever?

In 2022, the federal tax incentives known as the Investment Tax Credit (ITC) rose to 30% of a Dandelion geothermal system. However, the percentage covered by the ITC will decrease to 26% in 2033, and 22% in 2034.

Learn More

How do the incentives work?

Select your location below:

New YorkNY

ConnecticutCT

MassachusettsMA

New York State offers a 25% tax credit on geothermal installation expenses, up to $5,000.

Additionally, homeowners are eligible for New York State's Clean Heat Program, which 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

$20,000 per project

$20,000

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 EnergizeCT program (The following municipal utilities are not part of the EnergizeCT program; Groton, Bozrah, Norwalk, Wallingford, and Norwich). Geothermal systems are also exempt from Connecticut sales tax.

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

$1,500

$7,500

Electric Resistance

$1,500

$7,500

Here's what you're entitled to as a Massachusetts homeowner.

With MassSave incentives, MA homeowners qualify for a $15,000 rebate for a new Dandelion Geothermal system. 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.

Primary Fuel Type

Rebate Amount

Maximum Rebate

Oil, propane, and natural gas

$2,000 per ton

$15,000

Here's what you're entitled to as a Vermont homeowner.

Green Mountain Power offers an incentive of $1,800 per ton that is based on the system’s heating output, and Efficiency Vermont is offering an additional $300, for a combined $2,100 per ton.

Primary Fuel Type

Rebate Amount

Maximum Rebate

Oil, propane, electric and natural gas

$2,100 per ton

$21,000

Here's what you're entitled to as a New Jersey homeowner.

Rockland Electric (RECO) Homeowners are eligible for $0.20/BTUH rebate. On average, a 2,500 square foot home that installs a 5 Ton 47,900 BTUH Heat Pump will receive $9,580 Rebate. Homeowners can also claim a $500 rebate through the state’s COOLAdvantage program.

Utility

Geothermal Heat Pump

5 Ton Heat Pup 47,900 BTUH

Rockland Electric (RECO)

$0.20/BTUH

$9,580

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The credit does not apply to equipment used primarily for pool or hot tub heating. It also does not apply to installation in rental homes. Dandelion Energy and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors.