Here is a look at the various financial assistance available to help you install heat pumps in your home or building.  Find your local Clean Heating and Cooling Communities Campaign (often a “HeatSmart” campaign) to connect with incentives and installers local to your area.

NY Utility Incentives

As of April 1, 2020, NYSERDA has transferred their prior heat pump incentive programs to the investor-owned utilities.  Overall, amounts have generally remained the same.  There is increased funding for heat pump water heaters!  These incentives may only be used for buildings occupied year-round, and must use an accredited contractor.


  • Contractors will do the paperwork for you
  • All fuel types (including fracked gas) may switch to heat pumps
  • All building types – residential, commercial, multifamily, nonprofit, industrial, etc. are included.  The project may be a retrofit or new construction.
  • Calculations are based on heating capacity, rather than cooling capacity, providing better incentives for equipment that heats most efficiently at cold temperatures.

Amounts vary from utility to utility and depend on the size of the system. Check with your local HeatSmart or Clean Heating and Cooling Communities campaign for the relevant info for your area.

Tax Incentives

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 after 12/31/2019 and before 01/01/2021
  • 22% for systems placed in service after 12/31/2020 and before 01/01/2022

Expires:  December 31, 2021

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

NY Property Tax Exemption

Property tax exemption for residential energy efficiency upgrades including heat pumps


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.


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

SUMMER 2020: These loans will be at 0% interest through the rest of 2020, or until the money runs out, for terms of up to 15 years.  

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%

NEW! Geographic-based eligibility for reduced GJGNY interest rates: If you live in one of the census blocks pictured below, you can qualify for reduced interest rates without having to prove your income.  This makes it easier for self-employed individuals or others with hard-to-document incomes to access these reduced interest rates.

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.

Other Resources