Incentives & Financing

Energy efficiency upgrades and new heating and cooling systems are large investments in your home. The energy savings add up monthly to recover the money spent but there are also ways to help with upfront costs. First, there are utility rebates which come from your electric provider at the time of installation. Secondly, there may be federal tax incentives. The savings would come off of what you owe in the following tax year. If you do not pay taxes, this will not apply for you but there may be other ways to help such as NYSERDA income based grants and property tax exemptions.

Property Tax Exemption*

NYS Property tax exemption for residential energy efficiency upgrades including heat pumps means that these improvements to your home will not result in higher taxation on your property.

*A Note on Tax Information

These are general guidelines obtained from state and federal websites. The HeatSmart Capital Region group is not qualified to provide expert tax advice. For eligibility and information specific to your situation, please consult your tax preparer.

Air Source Heat Pumps

Note: Installers are experts at determining how to calculate your rebate based on the size of your system.

Utility Rebates

National Grid, NYSEG

Cold Climate Air Source Heat Pumps, Full Load Heating Rebate – $1,000 / 10,000 BTUH of maximum capacity at 5°F ($500 per unit to contractor)

Eligibility Requirements:

All ASHPs must be NEEP-listed Cold Climate Air Source Heat Pumps

Full Load: Can be central or mini-split heat pump, must be sized to 90-120% of building heat load

Partial Load: Must be mini-split heat pump

Central Hudson

Cold Climate Air Source Heat Pumps, Full Load Heating Rebate – up to $1,000 / 10,000 BTUH of maximum capacity at 5°F ($500 per unit to contractor)

Eligibility Requirements:

All ASHPs must be NEEP-listed Cold Climate Air Source Heat Pumps

Full Load: Can be central or mini-split heat pump, must be sized to 90-120% of building heat load

Partial Load: Must be mini-split heat pump

Federal Tax Incentives

The federal tax incentive will cover 30% of the total cost, up to $2,000.

Ground Source Heat Pumps (Geothermal)

Note: Installers are experts at determining how to calculate your rebate based on the size of your system.

Federal

Federal Residential Renewable Energy Tax Credit

Under the Bipartisan Budget Act of 2018, the renewable energy tax credits for fuel cells, small wind turbines, and geothermal heat pumps now feature a gradual step down in the credit value, the same as those for solar energy systems.

Tax Credit:

26% for systems placed in service throughout 2022
30% for systems placed in service throughout 2023
10% for commercial buildings through 2023

Details: Existing homes and new construction qualify. Both principal residences and second homes qualify. Rentals do not qualify.

NYS Tax Credit and Property Tax Exemption

In the NYS Budget passed in April of 2022, a NYS Income Tax Credit of 25% with a cap of $5,000 was put in place for qualified residential geothermal heat pump systems. Key eligibility criteria include the residence needs to be in NYS and is the taxpayer’s residence at the time the geothermal energy system is placed in service. If you have limited NYS tax liability, the credit can be used over five (5) taxable years. Be sure to check with your tax or financial advisor about your ability to take advantage of the NYS Geothermal Tax Credit.

Property tax exemption for residential energy efficiency upgrades including heat pumps means your home will not face a larger tax bill after these improvements.

Utilities, Including National Grid, NYSEG

Full Load Heating Rebate – $1500 per 10,000 BTUH of heating capacity (certified by AHRI) (-$500 per project to contractor)

Eligibility Requirements:

GSHP must be ENERGY STAR certified and meet ENERGY STAR Tier 3 requirements and be sized to 90-120% of building heat load.

This incentive only covers closed-loop systems. Speak with your installer for more information about incentives for open-loop systems.

Central Hudson

Full Load Heating Rebate – $2000 / 10,000 BTUH of heating capacity (certified by AHRI) (-$500 per project to contractor)

Eligibility Requirements:

GSHP must be ENERGY STAR certified and meet ENERGY STAR Tier 3 requirements and be sized to 90-120% of building heat load.

This incentive only covers closed-loop systems. Speak with your installer for more information about incentives for open-loop systems.

Heat Pump Hot Water Heater

Utilities Including National Grid, NYSEG

Air Source Heat Pump Water Heaters (HPWH) <120 gallons	$700/unit
Commercial air source HPWH >120 gallons	$80/MMBTU annual energy savings
Ground Source HPWHs	$900/unit
Ground Source Heat Pump desuperheater	$100/unit
BONUS for ccASHP + HPWH installation	$250

Central Hudson

Air Source Heat Pump Water Heaters (HPWH) <120 gallons	$1000/unit
Commercial air source HPWH >120 gallons	$80/MMBTU annual energy savings
Ground Source HPWHs	$1000/unit
Ground Source Heat Pump desuperheater	$150/unit
BONUS for ccASHP + HPWH installation	$250

Property Tax Exemption

Property tax exemption for residential energy efficiency upgrades including heat pumps

Federal Tax Incentives

The federal tax incentive will cover 30% of the total cost, up to $2,000.

State Energy Efficiency Incentives

New York State / NYSERDA

If you rent your home, your landlord will have to apply to these programs with you.

NYSERDA Energy Audit

Types of Energy Audits & Assessments

There are three different types of energy audits that may be available to you based on your county, the number of people in your household, and your household income. Check the NYSERDA website to determine your eligibility.

Please Note: for market rate customers who qualify for a free assessment, many contractors will provide a full audit for an additional fee, 30% of which can be refunded later by a federal tax credit. Talk to your contractor about availability and pricing of these services.

Check out this chart to find a contractor in your area to schedule your free home energy audit.

The table below is provided by TRUE Building Performance. Visit their website for example audit reports.

Comfort Home Performance Program

As part of the Comfort Home pilot program through NYSERDA, seal and insulate packages are offered by vetted Comfort Home contractors who can help you improve the efficiency of your home. Depending on the type of improvements being made, incentives from $1,600 to $4,000 may be available. See the program page on NYSERDA’s website for more details.

NYSERDA Assistance Programs for Low or Moderate Income (LMI) Residents

EmPower+ New York

EmPower+ will cover 100% of the costs for energy efficiency upgrades like air sealing and insulation, up to $10000, for households that are at 60% or less of the state median income. If you qualify for HEAP, you qualify for this!

EmPower+ also has a moderate income tier that can provide up to $5000 for energy efficiency upgrades, for households that are at 80% or less of the area median income.

Confused about which programs you qualify for? Use this tool to see which programs are right for YOU and your family.

Federal Energy Efficiency Incentives

Federal Clean Energy Tax Credits

The U.S. Department of Energy’s website lists incentives for consumers, including those from the Inflation Reduction Act (IRA), as shown in the table below.

The US DOE also now has an interactive Energy Savings Hub that makes it easy to find out more about IRA incentives.

Updates to the incentives and tax credits are ongoing and can be found on the IRS’s website here.

Financing

With proper financing, households on oil, propane, and resistance electric can realize significant out-of-pocket savings on their annual energy costs from day one. It is always cheaper overall to pay up front, but not everyone has the luxury of doing so. Here are options to consider:

Loans

Green Jobs Green New York: On-Bill Recovery and Smart Energy Loans

New York State offers two loans for energy efficiency (including heat pumps) and renewable energy projects through their Green Jobs Green New York program. On Bill Recovery includes the cost of the upgrades right on your energy bill and requires a cost-effectiveness test to be passed. On-Bill Recovery can be passed on to the next homeowner if it is not paid off by the time you sell your home. Smart Energy loans have their own billing. Lower interest rates are accessed through enrolling in autopay. Get more details and check qualification for interest rates. Talk to your installers about these, they will help you apply. All loans must be paid back within 15 years.

**Interest Rates Available Through NYS for residential energy efficiency and renewable energy**
Area Median Income	On-Bill Recovery or Smart Energy auto-pay	Smart Energy direct billing (in the mail)
Up to 120%	3.49%	3.99%
Over 120%	6.99%	7.49%

Good credit? Those with credit scores of 780 or above do not have to meet cost-effectiveness or debt-to-income ratio tests and income documentation is not required (unless applying for under 120% AMI interest rates). This is a new change to the program as of 2019.

Low credit score? This financing is available for credit scores down to 540.

What’s the area median income? Compare your gross income (before tax deductions) against these charts to determine which AMI bracket you fall into.

Also remember to ask your installer about what loans they may offer.

Other Resources

Database of State Incentives for Renewables & Efficiency^®
Live in a rural area? Check out the USDA Single Family Housing Repair Loans and Grants
Buying a new home with an FHA grant? HUD offers an Energy Efficient Mortgage Program (EEM) to help families save money on their utility bills by enabling them to finance energy efficient improvements with their FHA mortgage. Check here for more information, or ask your FHA lender.
For FAQs about energy efficient home improvements and residential clean energy property credits, see this fact sheet from the IRS.