Massachusetts heat pump rebates through Mass Save will shrink on Jan. 1, 2027, so Boston-area homeowners weighing a switch from oil, propane or gas heat have about two months left to install under 2026 rates. Mass Save currently pays up to $8,500 for a whole-home air-source system, and that cap drops to $7,500 for projects installed on or after Jan. 1. The federal tax credit that once stacked on top has already ended.
2026 Mass Save heat pump rebates
Mass Save, the energy efficiency program run by the state’s gas and electric utilities, lists three main air-source rebate types on its air-source heat pump page:
- Whole-home: $2,650 per ton, up to $8,500, when the heat pump is the only heating and cooling source
- Partial-home: $1,125 per ton, up to $8,500, when the heat pump supplements an existing system
- Basic: $250 per ton, up to $2,500
- Income-based enhanced incentives: up to $16,000, or up to no cost through Mass Save’s Turnkey Services
Tons are figured from the unit’s AHRI-rated cooling capacity divided by 12,000 BTUs. A National Grid 2026 residential rebate sheet also lists $500 bonuses for partial-home projects tied to prior weatherization or full heating-load sizing, and a limit of one whole-home rebate per account.
What changes on Jan. 1, 2027
Mass Save says whole-home projects installed on or after Jan. 1, 2027, will get $2,350 per ton, capped at $7,500. Partial-home projects will drop to $1,000 per ton, also capped at $7,500. For a 2026 install to qualify at current rates, the equipment must be installed between Jan. 1 and Dec. 31, 2026, and the rebate form and paperwork must reach Mass Save by Feb. 28, 2027.
The federal heat pump tax credit has ended
The Internal Revenue Service’s Energy Efficient Home Improvement Credit page says the credit, which covered 30% of qualifying heat pump costs up to $2,000 a year, applies only to improvements made through Dec. 31, 2025. An IRS FAQ on Public Law 119-21, signed July 4, 2025, confirms the section 25C credit is not allowed for property placed in service after that date. A heat pump installed in 2026 therefore qualifies for utility rebates but not that federal credit.
Eligibility rules to check before signing a contract
- Equipment must meet the ENERGY STAR Cold Climate specification and appear on Mass Save’s qualified products list.
- The installer must be a member of the Mass Save Heat Pump Installer Network.
- Customers must be served by a Mass Save sponsor, such as Eversource, National Grid, Unitil or Cape Light Compact for electricity, or Berkshire Gas, Eversource, Liberty, National Grid or Unitil for gas.
- Replacing an existing heat pump with a new one does not qualify for whole-home or partial-home rebates, though it may qualify for the basic rebate.
- Homes heated with municipal gas are generally ineligible for basic rebates unless a Mass Save sponsor supplies their electricity.
Mass Save recommends a no-cost decarbonization consultation or a talk with the installer about rebate expectations before work starts. Income-based enhanced incentives require that the home’s previous fuel be oil, propane or electric resistance.
How Boston homes are heated now
Most Boston homes still burn natural gas. U.S. Census Bureau American Community Survey 2024 1-year data (table B25040) show 162,783 of the city’s 294,977 occupied homes, about 55%, use utility gas as their main heating fuel. Another 99,021, about 34%, use electricity, a group that includes both heat pumps and older electric baseboard. Fuel oil heats 15,747 homes and propane 9,166, the two groups targeted by the income-based incentives.
The Massachusetts Department of Energy Resources’ heat pump overview says cold-climate systems work in sub-zero temperatures and can heat a building “at a fraction of the cost of oil or propane.” Mass Save’s rebate form adds a caveat: unless a home already uses electric resistance heat, a heat pump will increase electricity use, which may or may not be offset by lower fuel bills.
For help with this winter’s bills, see TBR’s Boston heating assistance guide and the Massachusetts winter outlook.
Next steps for Boston homeowners
The partial-home weatherization bonus requires weatherizing through Mass Save first, and the rebate form asks for the site ID from a Mass Save home energy assessment. The Massachusetts Clean Energy Center’s air-source heat pump guide covers sizing, contractor questions and maintenance. DOER can be reached at 617-626-7300, Monday through Friday from 8:45 a.m. to 5 p.m.
Related reading
Sources
- Mass Save: Air Source Heat Pumps (2026 rebates and 2027 changes)
- IRS: Energy Efficient Home Improvement Credit
- IRS: FAQs on modification of sections 25C, 25D and others under P.L. 119-21
- U.S. Census Bureau: ACS 2024 1-year, B25040 House Heating Fuel, Boston city
- Mass.gov DOER: Air and Ground Source Heat Pumps
Additional sources
- National Grid: Mass Save 2026 Residential Rebates (PDF)
- IRS: 2025 Instructions for Form 5695 (PDF)
- ENERGY STAR: Air Source Heat Pumps Tax Credit
- Massachusetts Clean Energy Center: Air-Source Heat Pumps
Photo: An air-source heat pump outdoor unit in the snow, by PeterEastern, Wikimedia Commons, CC BY-SA 4.0.
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