Heat Pump Water Heaters

Get instant savings by purchasing a clean, heat pump water heater.
A residential heat pump water heater

Please Note: The Sponsors of Mass Save® have announced changes planned to residential heating, cooling and water heating incentives. These changes will impact incentives for eligible installations completed between January 1, 2024 and December 31, 2024. A complete list of 2024 Residential Heating & Cooling Incentives can be found here.

Heat pump water heaters are the most efficient way to heat water in a home—up to three times more efficient than conventional electric water heaters.

They work by extracting heat from the air surrounding the unit to heat water. These advanced systems are best suited for homes with basements or separate utility rooms (these units lose efficiency if installed in closets without proper clearance).

In addition to incentives, you can also take advantage of federal tax credits to further lower the price of purchasing and installing a heat pump water heater.

Rebates are available for residents replacing an existing electric, propane, natural gas, or oil water heater.

Heat Pump Water Heaters Rebates
Equipment Type Efficiency Requirements Rebate Amount Federal Tax Credit
Heat Pump Water Heater ENERGY STAR® certified UEF 3.30 $750 per unit Up to $2,000*
Heat Pump Water Heater (120volt/15amp circuit) ENERGY STAR® certified UEF 2.20 $750 per unit
Split-System Heat Pump Water Heaters ENERGY STAR® certified UEF 2.20 $1,500 per system

*25C Energy Efficient Home Improvement Credit. Disclaimer: This information does not represent tax or legal advice. Please consult your tax advisor for further details.  

 

Cost Example

Below is a cost example of installing a heat pump water heater.

Average Installation Cost* $3,200
Mass Save Rebate $750
Federal Tax Credit** $735
Net Project Cost $1,715

 

* Installed cost based on heat pump water heater vendor and contractor feedback.  

**25C Energy Efficient Home Improvement Credit. Federal tax credit is applied to install cost after the Mass Save rebate is applied. The 25C Tax Credit is equal to 30% of the heat pump water heater install cost after the Mass Save rebate is applied up to a total of $2,000 annually. The 25C Tax Credit also allows an annual credit up to $600 for electrical panel upgrades if they are installed in conjunction with a heat pump or heat pump water heater. For more information on available tax credits, please visit the Inflation Reduction Act FAQ. This information does not represent tax or legal advice. Please consult your tax advisor for further details.   ,

 

There are two ways to receive an instant rebate on qualifying heat pump water heaters.

  1. Work with a Licensed Plumber/Installer
    Your plumber can purchase a qualifying heat pump water system at a Participating Distributor to receive an instant rebate of $750.

    Or

  2. Purchase a System From a Participating Retailer
    The Sponsors of Mass Save are partnering with Home Depot and Lowes to offer residents instant, in-store discounts ($750) on qualifying heat pump water heaters. To receive the discount, visit MassSave.com/Instant to validate your eligibility and receive a code.

    You will need to have your utility account number on hand. Present the code at the register and an instant rebate of $750 will be applied to the purchase price.
  • Offers valid only for residential customers in Massachusetts where Berkshire Gas, Cape Light Compact, Eversource, Liberty Utilities, National Grid, or Unitil is the Program Sponsor1.
  • Equipment must be installed by a licensed plumber between January 1, 2023 and December 31, 2023.
  • Equipment must be ENERGY STAR® certified.
  • Equipment must be new and installed to replace an existing residential electric resistance, propane, natural gas, or oil water heater.
  • Contractors can receive a $750 instant incentive on eligible models through participating distributors.
  • Customers may purchase a heat pump water heater directly from Home Depot or Lowe's to receive a $750 instant rebate.
  • Equipment must be installed in a residential home with 1-4 units.
  • To find ENERGY STAR® certified Heat Pump Water Heater units, talk to a licensed contractor or visit the ENERGY STAR® website for a list of local installers at www.energystar.gov/productfinder/water-heater-installers/.

Please note, equipment must be installed in a residential home with 1-4 units. Program is subject to change without notice, including rebate and incentive levels. Rebate cannot be combined with other Mass Save incentives for the same equipment. Rebate amount not to exceed total purchase price. Sponsor reserves the right to conduct a verification inspection. Sponsor does not warrant the performance of installed equipment.

1. Customers in municipal electric territories are eligible for heat pump water heater incentives if they are a natural gas heating customer of one of the Sponsors of Mass Save.  

If you have any questions about rebates through participating distributors, please call 1-617-440-5468 or email [email protected].

If you have any questions about rebates through participating retailers, please call 1-888-895-0568 or email [email protected].

The Sponsors of Mass Save offer 0% financing HEAT Loans to make energy efficiency upgrades more affordable to Massachusetts residents. Through this loan, you could qualify for a loan up to $50,000 toward qualified home improvements.


Related Rebates & Incentives

An energy efficient kitchen in Massachusetts

Case Study: All-Electric Home in Acton

When setting out to build a new home, Acton homeowners wanted a high level of energy efficiency and a low carbon footprint. With a ducted heat pump, heat pump water heater, solar array, and battery storage, these homeowners have an annual electric savings of 9,595 kWh.

Case Study: Drury Residence

A Greenfield homeowner received $10,000 in incentives after participating in a no-cost energy assessment and replacing his furnace and water heater with clean, efficient heat pump systems.