Heat Pump and Mini-Split Incentives

Heat pumps and mini-splits are a highly efficient electric heating and cooling system that can be installed in part, or all of your home. With HG&E's low electric rates, they also have one of the lowest annual heating costs of any heating system type in Holyoke. 
Scroll down to review the variety incentives available for heat pumps and mini-splits. (It is recommended that you thoroughly review all eligibility requirements for the incentive(s) you would like to qualify for before you install your heat pump/mini-split.)
Visit our heat pump and mini-split educational webpage if you would like information on how they work, how to find an installer, how much it costs to heat with a heat pump vs. other heating fuels

Not sure where to start?

click here for a step-by-step guide!





HG&E Rebates:

If you are interested in this rebate, please review the full list of eligibility requirements, and step-by-step process, both located on the program webpage. Also, please let your installer know the heat pump system will need to meet the following requirements:

  • Be AHRI certified
  • Have a qualifying efficiency ratings for the basic heat pump rebate (Click here if you would like more information on what these efficiency ratings mean)

This program offers a higher heat pump/mini-split rebate as well as a weatherization rebate adder (75% of cost up to $3,000) for installing a qualifying system that is sized to meet 100% of your home's heating requirements. If you are interested in this rebate, please review the information on the program webpage. Also, please send your installer this list of system and installer requirements.

This program offers a groud source heat pump rebate as well as a weatherization rebate adder (75% of cost up to $3,000) for installing a qualifying ground source heat pump system that is sized to meet 100% of your home's heating requirements. 

additional hg&e incentives:

Financial assistance at 0% interest for qualifying projects. Apply before you begin your project to secure the funds!

Receive a $5-$8/month incentive for allowing HG&E to remotely adjust the temperature of heat pump or mini-split system a few times each month (Must have qualifying thermostat or heat pump controller).

Get a free customized assessment of your home to help determine the most cost-effective ways to reduce your energy bills. Let your energy auditor know you are interested in heat pumps and they can also include information in your energy audit report on how much you will save on your heating/cooling costs if you install heat pumps. You can also talk to the energy auditor about how much you'd save if you install a whole-home heat pump system vs installing a smaller system, perhaps in the rooms you use the most. 


non-hg&e incentives:

MassCEC is offering grants of up to $30,000 to homeowners who are committed to decarbonizing their homes. Eligible projects include  installing heat pumps, weatherization, electric hot water heaters and appliances, electric vehicle purchases, etc.  Priority will be given to applicants who intend to install whole-home heat pump systems and who intend to fully decarbonize their home. Second application window opens in fall 2022. 

An average of $4,500 in funds available for full-scale home energy efficiency services including insulation and air sealing for qualifying low-income homeowners and tenants. (If you are planning to install heat pumps/mini-splits, it can be a good idea to consider weatherizing your home first because this can potentially reduce the size of the heating system you need and therefore potentially also reduce the installation costs.)
This program is offered through OneHolyoke CDC and provides low-interest loans of up to $21,000/unit available for multi-family rental properties with low-income tenants for various building improvements such as heating/cooling systems.
Various companies offer low-interest financing options to help with energy efficiency projects such as heat pump installations. For example, People's Bank offers an Energy Efficiency Home Equity Loan with a lower interest rate available for energy efficiency projects. Mitsubishi Diamond Contractors also offer a Mitsubishi Synchrony Financing option. 
The Department of Energy Resources (DOER) provides the owners of qualifying whole-home air source heat pumps with Alternative Energy Certificates (AECs), which can be sold in the energy credit marketplace for a financial incentive. The DOER encourages system owners to work with "Aggregators" who can sell your AECs on your behalf. Please reach out to an aggregator for more information and the eligibility requirements. Here is a link to the list of aggregators located on the program webpage. 

The Inflation Reduction Act, signed into law in August 2022, is anticipated to provide rebates of up to $8,000 and increased tax credits for heat pumps beginning in 2023. However, the application process and eligibility requirements are still unclear and it is recommended that you review this whitehouse.gov webpage for more information, and to sign up for updates. You can also click here for a calculator available on rewiringamerica.org to see how much you can get back in rebates and incentives based on your zip code and household income. 


not sure where to start?

consider following these steps!


1. Learn a bit about heat pump and mini-split technology on our heat pump education webpage

2. Start thinking about what size heat pump system you might want.

Heat pumps come in all sorts of sizes. You can install a smaller heat pump that can provide some heating and cooling, or, you can install a whole-home heat pump, that can provide 100% of your heating needs. Because heat pumps are expensive, sometimes people will install a smaller system in the rooms they use the most, such as the living room, and just use it as much as possible for their heating. 

3. Get a free home energy audit to see what your estimated annual heating & cooling cost savings would be if you install heat pumps. 

To schedule the audit, call 1-888-333-7525. When you talk to the auditor, you can ask what your estimated heating cost savings would be if you install a whole-home system and what they would be if you install a smaller system, perhaps in the rooms you use the most. 

4. Review your audit report to see what your estimated annual heating cost savings would be if you install heat pumps. Your audit report may also list weatherization (insulation and air sealing) recommendations, along with estimated annual cost savings as well. It can be a good idea to consider improving your weatherization before you install heat pumps because it can potentially reduce the size of the heating system you need. (Click here for more information on weatherization rebates and incentives available). 

5. Get quotes for heat pumps/mini-splits that meet either our basic heat pump rebate ($250/ton up to $1,000) requirements and/or our whole home heat pump program requirements.

  • When you talk to installers, try getting quotes from at least 3 installers. Installation costs have the potential to vary by thousands of dollars depending on the company you work with.
  • When talking to installers, you can also considering asking for a quote for a smaller heat pump system perhaps which is installed in the rooms you use the most. Then, you can just use it as much as possible for heating. We do have a basic heat pump rebate ($250/ton up to $1,000) available for smaller systems. You can also apply for the Residential Energy Conservation Program (financial assistance at 0% interest of up to $10,000+) for smaller heat pump systems in addition to whole-home heat pump systems.

6. After you get a quote for a heat pump/mini-split system you would like to move forward with, we recommend you submit an application before you start your project if you are interested in the Whole-Home Heat Pump Program and/or the Residential Energy Conservation Program.

If you are interested in the whole-home heat pump program, please submit the application located on the whole-home heat pump program webpage. 

7. Be sure to review the additional incentives located on this webpage above to capture all the financial incentives available!


Contact: efficiency@hged.com