Mass Save Heat Pump Program Updates for 2025

Mass Save continues to lead the charge in electrifying Massachusetts homes with updated incentives, loan programs, and rebate structures for 2025. These changes aim to make heat pump adoption more accessible, especially for low- to moderate-income households and multifamily buildings.

Whether you're a homeowner, property manager, or contractor, understanding these changes is critical as you plan your 2025 projects. Here's what you need to know.

2022–2024 Program Performance Highlights

Over 50,000 heat pumps were installed across Massachusetts from 2022 through Q2 2024, encompassing:

• Full and partial displacement systems
  
• Heat pump water heaters (HPWHs)
  
• Commercial-scale installations
  

HEAT Loan Data (Residential):

• 23,809 heat pump loans were issued totaling over $384 million
  
• 3,086 loans supported domestic hot water upgrades
  

Proposed Changes to Mass Save Programs in 2025

Updated Heat Pump Rebates

Mass Save will continue offering tiered rebates in 2025, with incentives varying based on:

• System type (air source, variable refrigerant flow, or ground source)
  
• Whole-home vs. partial displacement
  
• Fuel type being replaced
  

Residential Rebate Tiers

• Whole-home ASHPs: Up to $10,000 per home
  
• Ground source heat pumps (GSHPs): Higher rebates available
  
• Partial-home installs: Rebates range from $250 per ton to several thousand dollars
  

Commercial Rebate Structure

• ASHPs: $2,500 per ton
  
• Air Source VRF: $3,500 per ton
  
• GSHPs: $4,500 per ton
  

Residential HEAT Loan Enhancements

Qualified homeowners can access up to $25,000 in 0% interest financing for eligible heat pump and energy-efficiency upgrades. Loan terms are income-dependent:

• 81%–135% of State Median Income (SMI): 7-year term
  
• 135%–300% of SMI: 5-year term
  
• Above 300% of SMI: 3-year term

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New and Continuing Incentive Programs

No-Cost Turnkey Installation (≤80% AMI/SMI)

• Entire systems, weatherization, and electric panel upgrades may be covered
  
• Aimed at preparing homes for electrification
  

Multifamily Housing Incentives (5+ Units)

• 0% HEAT Loans available to residentially metered condo units
  
• Additional incentives for insulation and air sealing
  
• Income-qualified units may be eligible for CAP (Community Action Program) support
  

Tax Credit Opportunities

Although not administered by Mass Save, the Inflation Reduction Act (IRA) provides:

• 25C tax credit: Up to $2,000 annually for heat pumps and HPWHs
  
• Can be combined with Mass Save incentives in many cases
  

Key Questions & Clarifications

Q: If a HEAT Loan is approved in 2024 but installation occurs in 2025, which rebate applies?A: Rebates are based on the installation date. Clearly label proposals with a 2025 install date if applicable.

Q: Do all tenants in a 5+ unit building qualify for the $10k rebate individually?
A: If units are individually metered and meet “whole home” conditions, yes.

Q: Can I still get the full 2024 rebate if my project installs in January 2025?
A: No. Projects must be installed by 12/31/2024 to qualify for 2024 rebates.

Q: Is there a cap on the $250/ton rebate for partial ASHP installs?
A: No, there is no cap.

Q: How are low-income tenants handled in multifamily buildings?
A:

• If ≥50% of units are low-income, all units should go through CAP.
  
• If <50% are low-income, then split: market rate and CAP where applicable.
  

Takeaways for Homeowners and Contractors

Mass Save’s 2025 changes continue to support Massachusetts’ clean energy goals by incentivizing whole-home electrification and addressing energy equity through targeted programs.

With flexible rebates, generous loan terms, and federal tax credits available, there has never been a better time to explore a heat pump upgrade—whether for your home, multifamily property, or commercial space.