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Heat Pump Retrofit Incentive Calculator

Heat pump retrofits qualify for stacked federal, state, utility, and green financing incentives.

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Net cost after incentives

$7,000

Payback years

7.8

Total incentive stack

$11,000

How the math works

Federal credit = min(cost × %, cap). Net = cost − federal − state − utility.

$18k × 30% = $5.4k capped at $2k. $2k + $6k + $3k = $11k incentive. Net $7k / $900 = 7.8 yr payback.

How to Use

  1. Enter HP installation cost.
  2. Enter federal 25C/179D credit %.
  3. Enter state rebate.
  4. Enter utility rebate.
  5. Enter annual energy savings.
  6. Read net cost and payback.

Frequently Asked Questions

Federal incentives for heat pumps?

IRA 25C residential: 30% credit up to $2,000 for air-source heat pumps, $8,000 for geothermal. Commercial 179D: $0.50-5.00/sqft deduction (sliding with energy reduction). 48E (IRA): investment tax credit 30% for commercial heat pumps beginning 2025 (limited). Rental/multifamily: 45L credit $500-5,000/unit for new construction with heat pumps. High-Efficiency Electric Home Rebate (HEEHRA): up to $8,000 per household (low/moderate-income focused).

State/utility programs?

Mass Save (MA): $10,000-15,000 rebate per household. ConnectedSolutions (RI, NE): $1,500-3,000 rebate + demand response. NY State Clean Heat: $1,000-5,000. PG&E (CA): $3,000-6,000. NJ Clean Energy: $3,000-8,000. Washington Clean Energy: $3,500-7,000. Programs change often — verify current at time of installation. Combine with federal = often 40-75% of installation cost covered.

Installation costs?

Ductless mini-split (1-4 zones): $4,000-12,000 installed. Ducted air-source heat pump (whole home): $10,000-25,000. Ground-source (geothermal): $25,000-60,000. VRF (variable refrigerant flow, multi-zone commercial): $15-30/sqft. Mass savings scenario: $18,000 ductless ground + state rebate $10k + fed credit $2k + utility $3k = $3k net. Operating: $600-1,200/year savings vs gas furnace. Payback: 2-5 years net of incentives.

Multifamily scale?

100-unit multifamily building: $8-18k/unit for in-unit heat pump installation. Total $800k-1.8M. Incentive stack: 45L $1,000-5,000/unit ($100-500k), state rebates $3-6k/unit ($300-600k), utility rebates $1-3k/unit, ITC equivalent. Net cost: $2-6k/unit after incentives. Energy savings: $400-900/unit/year. Added: emissions compliance (NYC LL97, Boston BERDO), green financing, tenant appeal. Strong economics in mandate cities.

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