Heating Incentives & Financing

This page contains information on incentives for heat pumps—air-source and ground-source (aka “geothermal”)—, for wood and pellet stoves, as well as information on financing options.

NYS Clean Heat Rebates

Rebates are paid to participating contractors who then lower the upfront cost to the customer.

Air-Source Heat Pumps:

  • NYSEG customers can receive up to $1,200 per ton of heating capacity for systems that heat a whole home.

  • Central Hudson customers can receive up to $1,000 per ton of heating capacity for systems that heat a whole home.

  • Orange & Rockland Utility residential customers can receive up to $1,400 per ton of heating capacity for systems that heat a whole home.

  • Consolidated Edison residential customers can receive up to $8,000 per building for systems that heat a whole home.

  • Additional incentives from the Inflation Reduction Act are being worked out by NYSERDA, and will not likely be known until the early 2024. In the meantime, check out this IRA calculator from Rewiring America.

Ground-Source Heat Pumps:

  • NYSEG customers can receive up to $1,500 per ton of heating capacity for systems that heat a whole home.

  • Central Hudson customers can receive up to $25,000 per building ($35,000 if located in a disadvantaged community) for systems that heat a whole home.

  • Orange & Rockland Utility residential customers can receive up to $2,00 per ton of heating capacity for systems that heat a whole home.

  • Consolidated Edison residential customers can receive up to $12,500 for systems that heat a whole home.

Our team of Energy Advisors can help you in your contractor search, compare quotes, access financing, and more! Contact a member of our team for no-cost assistance.

Heat Pump Tax Credits

Tax credits are assessed after installation and, in some cases, can be spread out over several years.

  • Federal 30% tax credit for air-source heat pumps, ground-source heat pumps, and heat pump water heaters. Learn more here.

  • NY State tax credit of 25% up to $5,000 for ground-source heat pumps.

We encourage anyone who is seeking tax incentives to contact a certified tax professional to discuss your individual tax situation. Energy Advisors do not give tax advice.

WOOD & WOOD PELLETS

As of 2023, there is a 30% federal tax credit for wood and pellet stoves with a thermal efficiency rating of 75% or higher.

Income-eligible households may be able to get up to $2,500 off the cost of a qualifying stove through these energy efficiency programs:

  • EmPower + Tier I (60% of the state median income) eligible households can get $2,000 towards the purchase of a new pellet stove + $500 if they recycle an existing wood, pellet or coal stove or insert.

  • Empower+ Tier II with Energy Star (80% of area median income) eligible households can get 50% of the cost of the purchase of a new pellet stove up to $2,000 + $500 if they recycle an existing wood, pellet or coal stove or insert.

To access these additional income-eligible incentives, you have to work through a NYSERDA-participating energy efficiency contractor.

FINANCING

In addition to the rebates mentioned above, there are a number of financing options to help pay for energy-related improvements. Contractors and our Community Energy Advisors can provide additional information on these options, but we provide an overview below.

ON-BILL RECOVERY LOAN

This is a NYSERDA loan in which your loan payments are built right into your utility bill. With this loan, your monthly payments may not exceed your estimated average monthly energy cost savings. So your energy savings essentially pay for your work. Loan amounts of $1,500-$25,000 with terms of 5, 10, or 15 years. Rates are 3.49% for low-income households, 4.99% for households with moderate income, and 5.99% or 6.99% for everyone else. Learn more here.

SMART ENERGY LOAN

This other NYSERDA loan is more traditional, with a monthly payment to NYSERDA's loan servicer. Amounts are from $1,500-$25,000 with terms of 5, 10, and 15 years. Rates range from 3.49% for lower income households who pay by auto payment to 7.49% for upper income households who pay by check. More info here.

OTHER FINANCING OPTIONS & LOCAL BANKS

Your contractor may be able to offer you other financing options. And you may also want to consider a loan through a local bank. Home equity loans can often be useful for energy-related improvements. Some banks even offer special loans for energy projects which you can take advantage of.