Tax Credits and Incentives for Clean Heating, Cooling, and Water Heating

Eligible Clean Energy Technology

  • Heat Pump (Hybrid) Water Heaters- NYS Clean Heat incentives: $700-$1,000, on average
  • Geothermal (Ground Source) Heat Pumps- NYS Clean Heat incentives: $7,000-$9,000, on average
  • Cold-climate Air Source Heat Pumps- NYS Clean Heat incentives for partial home solutions: $100-$400, on average; NYS Clean Heat incentives for whole home solutions: $2,000-$3,000, on average


Customers interested in an air source heat pump can earn up to $10,000 in rebates. For those interested in ground source heat pumps, there is up to $18,000 in rebates available


New York State offers significant incentives for geothermal (ground source) heat pumps, including a 25% state tax credit (up to $10,000 for systems placed in service on/after July 1, 2025) and NYS Clean Heat rebates ($7,000–$9,000+ average). Combined with federal tax credits, these programs can significantly reduce installation costs.

  • NYS Geothermal Tax Credit: 25% of qualified equipment expenditures, capped at $5,000 for systems installed on/before 6/30/2025, and increasing to $10,000 for systems placed in service on or after 7/1/2025. This credit can be carried over for up to five years.
  • NYS Clean Heat Rebates: Available through local utilities (ConEd, National Grid, NYSEG, etc.), these typically provide $7,000–$9,000 for residential ground-source heat pump installations.
  • Residential Clean Energy Tax Credit: A 30% federal tax credit is available for geothermal heat pump systems installed through 2032.

AIR-SOURCE HEAT PUMP INCENTIVES

  • Single Family > 1,000 sq ft:

    $8,000: If removing your oil tank or previous fossil fuel heating source.

    $5,000: If NOT removing your oil tank or previous fossil fuel heating source.

    $3,000: If adding heating load to an existing partial-load cold climate air source heat pump system to reach a full-load system.

  • Apartment or Single Family < 1,000 sq ft:

    • $5,000: If removing your oil tank or previous fossil fuel heating source.
    • $3,000: If NOT removing your oil tank or previous fossil fuel heating source.
    • $1,000: If adding heating load to an existing partial-load cold climate air source heat pump system to reach a full-load system.

GROUND-SOURCE HEAT PUMP INCENTIVES

  • Apartment or single-family home >1,000 sq ft:

    • $18,000 for full-load heating retrofit.
    • $8,000 for new construction project.

  • State tax credit:

    25% off installation expenses (up to $10,000).

Projects replacing existing full-load heat pump systems are not eligible for incentives. Heat Pumps installed only to serve part of the home’s heating needs are not eligible for incentives.

Incentives are limited to 70% of project costs, Existing buildings, including gut renovations, are eligible for incentives for ASHP, AWHP, GSHP, and HPWH. New construction is not eligible to receive incentives for ASHP or AWHP for space heating. New construction is only eligible to receive incentives for GSHP for space heating, GSHP paired with other custom water solutions, heat pump-based solutions for domestic hot water usage, or HPWH incentives.