Upgrading to an energy-efficient heat pump is a big investment, but homeowners in Massachusetts have two powerful incentives to reduce costs:
- Mass Save Rebates – Up to $10,000 for whole-home or partial-home heat pumps.
- Federal Tax Credits – Up to 30% of installation costs (max $2,000 annually) under the Inflation Reduction Act (IRA).
The best part? You can combine both programs to maximize your savings. In this guide, we’ll break down the differences, eligibility requirements, and the best way to take advantage of both incentives.
Related: Learn how to qualify for Mass Save rebates.
What’s the Difference Between Mass Save Rebates and Federal Tax Credits?
| Feature | Mass Save Rebates | Federal Tax Credits |
|---|---|---|
| Max Savings | Up to $10,000 | 30% of costs (max $2,000/year) |
| When You Get It | After installation (within 6-10 weeks) | When you file your tax return |
| Who Qualifies | Massachusetts homeowners | All U.S. homeowners |
| Eligibility | Work with an HPIN-certified contractor | Must install a qualified ENERGY STAR® heat pump |
| Can Be Combined? | Yes | Yes |
Related: Learn how the Mass Save HEAT Loan can help cover costs with 0% financing.
How the Mass Save Rebate Program Works
Mass Save provides rebates to encourage energy-efficient home upgrades, including heat pumps.
Rebate Amounts:
- Whole-Home Heat Pumps: $3,000 per ton, up to $10,000
- Partial-Home Heat Pumps: $1,250 per ton, up to $10,000
Eligibility:
- Must install a Mass Save-approved ENERGY STAR® Cold Climate heat pump.
- Work with an HPIN-certified contractor like Lund Plumbing & Heating.
- Complete a Mass Save Home Energy Assessment before installation.
How to Apply:
- Schedule a home energy assessment to determine eligibility.
- Choose an approved heat pump and work with an HPIN-certified contractor.
- Submit your rebate application after installation.
Related: Find out whether a whole-home or partial-home rebate is right for you.
How the Federal Heat Pump Tax Credit Works
As part of the Inflation Reduction Act (IRA), homeowners installing an ENERGY STAR® heat pump can claim 30% of installation costs, up to a $2,000 annual cap.
Eligibility:
- Must install an ENERGY STAR® heat pump.
- The home must be your primary residence (rentals don’t qualify).
- You must file a federal tax return and owe at least $2,000 in taxes to claim the full benefit.
How to Claim the Credit:
- Install a qualifying ENERGY STAR® heat pump.
- Save all invoices and manufacturer certification statements.
- When filing your taxes, use IRS Form 5695 to claim your credit.
Important: If your total tax liability is less than $2,000, you may not receive the full credit in one year, but you can apply it to future tax years.
Can You Combine Mass Save Rebates with the Federal Tax Credit?
Yes! These incentives are stackable, meaning you can use both to reduce the total cost of your heat pump installation.
Example Savings Breakdown:
| Installation Cost | $15,000 |
|---|---|
| Mass Save Rebate | -$10,000 |
| Federal Tax Credit (30%) | -$1,500 |
| Final Out-of-Pocket Cost | $3,500 |
By combining both programs, a $15,000 heat pump system could cost you as little as $3,500. If you also take advantage of the Mass Save HEAT Loan, you could finance the remaining balance at 0% interest.
Final Thoughts: Maximize Your Heat Pump Savings
By combining Mass Save rebates and the federal tax credit, you can significantly reduce the upfront cost of a heat pump installation while lowering your long-term energy bills.
At Lund Plumbing & Heating, we help homeowners:
- Qualify for both rebates and tax credits.
- Select the best heat pump for their home.
- Handle rebate paperwork and financing applications.
Call us today at (781) 944-2222 or schedule a consultation to start saving.
