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.
HEAT PUMPS
Air-source heat pumps:
NYSEG offers a $800/10,000 BTU rebate for systems that heat a whole home. As well as an optional $1,200/10,000 BTU with the old system decommissioned. And an optional $1,000/10,000 BTU with integrated controls.
The municipal electric Independent Energy Efficiency Program (IEEP) provides $1,200 for a whole-home system and $800 for a partial system.
In addition, grant funding from NYSERDA’s EmPower+ program can sometimes be used towards heat pump installations. This program is for income-eligible households, and provides up to $10,000 for low income households or a matching grant up to $5,000 for moderate income households.
As of January 2023, there is a 30% federal tax credit for air-source heat pumps and heat pump water heaters for up to $2,000. Learn more here.
There will be additional incentives from the Inflation Reduction Act. Details are being worked out by NYSERDA, and will not be known until later in 2024. In the meantime, check out this IRA calculator from Rewiring America.
Income-eligible households in some counties may qualify for an additional grant through the Finger Lakes Climate Fund, including significant incentives for income-eligible renters.
Lansing area residents may also qualify for additional incentives through a NYSEG-funded program (administered by Earth Sensitive Solutions)
As of 2023, income-eligible tenants in the city of Ithaca may qualify for additional incentives through a pilot run by Sustainable Finger Lakes. Read more about this program in this news article. Tenants may contact Milena@sustainablefingerlakes.org and Landlords may contact Gay@sustainablefingerlakes.org.
Ground-source heat pumps, also known as geothermal, remove heat from underground, and are more efficient than air source heat pumps.
There are three (!) significant incentives for geothermal heat pumps which can cover over half the cost of the installation:
NYSEG rebate of $1,500/10,000 BTU for geothermal technologies.
Federal tax credit of 30% (raised up from 26% in 2022 with the Inflation Reduction Act)
State tax credit of 25% up to $5,000 (beginning in January 2022; here is the bill; a more legible document will follow once we find one!)
Click on Image for a downloadable PDF of NYSEG and RG&E heat pump incentives.
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.
There are also some incentives for replacement wood or pellet stoves for income-eligible households through NYSERDA’s EmPower+ program.
Furnaces and Boilers
As of April 2024, NYSEG natural gas customers can access rebates through NYSEG for purchases or tune-ups of furnaces and boilers.
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
The On-Bill Recovery Loan 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% to 3.99% for low-income households, 4.99% for households with moderate income, and 6.99% or 7.49% for everyone else.
Smart Energy Loan
The Smart Energy Loan is another 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.
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.