Geothermal Incentives By State – NY, MA, CT, MD, NJ, & PA
Geothermal, or ground source heat pumps, are a super efficient way to heat and cool your home without fossil fuels. Not only is it good for the environment, it can also save you money by eliminating your heating bill altogether.
To help save you even more money, the federal government, some states, and many utilities offer generous incentives to make going geothermal an even easier decision.
As of right now, Dandelion is only installing geothermal systems in New York State. But what do those incentives look like for other states in the northeast?
Federal Geothermal Incentives
As of 2021, the Geothermal Federal Tax Credit allows you to deduct 26% of the cost of installing a geothermal heating and cooling system from your federal taxes. There’s no limit on it’s value. That incentive is set to go down to 22% in 2023 before being sunset altogether in 2024.
State Geothermal Incentives
Geothermal heat pumps need to be properly sized for the space they heat and cool. Heating and cooling capacity is measured in tons. Most residential heat pumps range in size from 1 to 5 tons, and if you have a larger home, you may need more than one heat pump. The larger the heat pump, the greater the cost. That’s why most states offer incentives based on the tonnage of a geothermal system.
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. For example, a 4 Ton Dandelion Air (DA) heat pump has 41,000 BTUH. A 4 Ton heat pump is typically appropriate for a 2,000 square foot home. Utility incentives range between $0.15 per BTUH and $0.285 per BTUH. A homeowner who installs a 4 Ton DA heat pump can receive between $6,150 and $11,685, depending on the utility.
- A geothermal heat pump containing a desuperheater qualifies for an additional incentive. 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.
The MassCEC rebate program offers $2,000/ton, up to $10,000 per home for homeowners switching to geothermal. On top of that, the Mass Save Heat Loan offers zero-percent financing for seven years (up to $25,000).
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.
Geothermal systems are also exempt from Massachusetts sales tax.
Connecticut’s geothermal heat pump incentives are administered by Energize Connecticut, which is backed by Eversource and United Illuminating. The incentives for Connecticut homeowners range from $750 / ton – $1,500 / ton depending on your current heating set-up. For more information visit our Tax Incentives page here.
The Maryland Energy Administration offers a grant of $3,000 for a ground source heat pump system. That’s augmented by a $1,500 rebate provided by utility companies like BGE, SMECO, PEPCO and First Energy.
Residential geothermal systems are also exempt from Maryland sales tax.
New Jersey homeowners can claim a $500 rebate through the state’s COOLAdvantage program.
FirstEnergy customers in Pennsylvania can claim a $600 rebate.
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