Incentives, Grants, and Financing

Energy efficiency upgrades and new heating and cooling systems are major financial investments in your home or building, but they are good investments, reducing your energy usage and keeping you and your family more comfortable. Grants, rebates, low-interest financing, and other incentives can help for all incomes whether you rent or own your home!

These incentives are for single family homes, or 2-4 family homes in some occasions. View programs for multifamily (5+ units), nonprofits, small commercial, and other large properties

No matter what you heat your home with, improving your home’s performance by accessing better insulation and air sealing to reduce drafts will make your home more comfortable, save you money on heating and cooling, and increase the health and safety of your home. Some incentive programs for heat pumps (for clean heating and cooling) also require you to meet certain levels of insulation in the home first, so improving your energy efficiency now will make your home “heat pump ready” in the future. 

There are incentives for all income levels! Choose your household size (and county for single households) to see qualifying income levels for EmPower+ or Comfort Home. These programs focus on improving energy efficiency, health, and safety of a home, and can sometimes provide funding for heat pumps as well. 

Inflation Reduction Act Rebates 

The Inflation Reduction Act (IRA) of 2022 represents the single largest investment in climate and energy in U.S. history, directing billions of dollars towards homeowners, renters, businesses, municipalities, and nonprofit organizations to lower the cost of clean energy technologies. While many of these incentives were removed in 2025, some still exist. 

IRA incentives are still available to EmPower+ Low Income and EmPower+ Moderate Income programs. A maximum of $14,000 per unit can be used with each eligible measure having a set incentive. Although you can keep applying for EmPower+, you can only use the IRA HEAR incentives per measure once.  

Currently Available Maximum IRA HEAR incentives via EmPower+:

• $8,000:  Heat pumps (air or ground source)
• $4,000:  Breaker box (electric service upgrade)
• $2,500:  Electric Wiring
• $1,600:  Weatherizing (insulation, air-sealing, and ventilation)

via the Appliance Upgrade Program:

• $840: Heat pump clothes dryers (or combination units that wash and dry)

Learn more at NYSERDA’s Inflation Reduction Act Info Page

EmPower+

EmPower+ may provide funding for heat pumps, but houses must meet or surpass minimum insulation requirements, and it may depend on the fuel type being replaced and the expected energy savings. The $8000 Inflation Reduction Act rebate for low to moderate income households is accessed through EmPower+. A participating contractor will help determine if a heat pump is possible with this funding for your home. 

NYS Clean Heat

NYS Clean Heat Rebates are now only available for 1-4 unit residential buildings; other building types are encouraged to reach out to their utility’s commercial program.  Other than heat pump water heaters, heat pump technologies need to be installed by NYS Clean Heat participating program contractors. If you are getting a heat pump using EmPower+ and/or IRA HEAR you cannot combine the NYS Clean Heat utility incentive.

If you want to get really technical, or see incentives for other utility regions, see the NY Clean Heat Program Manual (last updated April 1, 2025) for details. Generally, only installers need to get into this level of information.

Verify that your program contractor will apply for the heat pump rebate and include the rebate in the total project cost for you.  It is a best practice, but some contractors leave it to the customer to pay upfront and get the rebate later. 

Water Heating Rebates

For air source heat pump water heaters you can access the incentive whether it is installed with a NYS Clean Heat Contractor, other contractor, or if you do a self-install. A Clean Heat Contractor will apply for the rebate often for you. You can also apply for the rebate yourself via mail/online, or an instant rebate (*National Grid heat pump rebate link and NYSEG/RG&E rebate link). Instant rebates are currently available for purchases at Home Depot or Lowe’s (we do not endorse any companies).

The Inflation Reduction Act heat pump water heater rebate is accessed through EmPower+.

Municipal Electric IEEP Rebates

Municipal electric cooperatives who participate with IEEP offer a variety of rebates to their customers. Contact your utility about their current offerings. For IEEP the resident will apply for the rebate post-install.  New construction is not applicable and gut rehabs should verify first with IEEP if they can access the incentive. 

Federal Tax Credits & Rebates 

Disclaimer: We are not tax professionals. The information on this website is intended for guidance only. There are particular standards and details that must be met; please consult with a tax professional.

Starter tax credit resources:

• • Energy Star Federal Tax Credits page has an easy break down by technology type or for a quick break-down check out this Energy.gov tax credit table and video
  • ReWire America 25C and 25D Tax Credit Fact Sheet
  • NYSERDA’s Inflation Reduction Act Information Page
  • IRS FAQ Document on Qualifying Energy Efficiency Requirements for Federal Tax Credits has in-depth frequently asked questions about energy efficient home improvements and residential clean energy property credits 

Energy Efficient Home Improvement Tax Credit (25C)

Eligible measures include energy-efficient insulation, windows, doors, and similar energy-saving improvements, certain biomass stoves and boilers, electric panels and related equipment.

• 30% tax credit, does no rollover from year to year
• Annual Limit: 30% up to $1,200 for eligible weatherizing and other detailed electrification upgrades
  • Electric panel or circuit upgrade for new electric equipment – 30% up to $600
  • Insulation materials – 30% up to $1,200
  • Window, including skylights – 30% up to $600 
  • Exterior doors – 30% up to $500 (up to $250 per door)
  • Home electric vehicle charger – 30% up to $1,000
  • Efficient air conditioners, efficient heating equipment, or efficient water heating equipment – 30% up to $600
• Annual Limit:  30% up to $2,000 for eligible heat pump and biomass equipment
  • Air source heat pump
  • Heat pump water heater
  • Biomass heating

Residential Clean Energy Tax Credit (25D) for Geothermal, Solar, and Battery Storage

The Inflation Reduction Act of 2022 has increased the federal Residential Clean Energy Property Credit tax credit for ground source heat pumps, solar panels, and battery storage, etc. to up to 30% of the cost, with no cap, through 2032. 

Existing homes and new construction qualify. Both principal residences and second homes qualify. Rentals do not qualify. Not all households are able to take the full 30%, it is limited by the amount of tax you owe, otherwise known as tax liability. This tax credit can roll over from year to year.

New York State Tax Credits

In 2022, the New York State Legislature passed an updated geothermal and solar state tax credit.

• The credit is equal to 25% of your qualified geothermal or solar energy system equipment expenditures and is limited to $5,000.
• The credits are not refundable. However, any credit amount in excess of the tax due can be carried over for up to five years.

Not all households are able to take the full tax credit, it is limited by the amount of tax you owe, otherwise known as tax liability.

Property Tax Exemption

Property tax exemptions exist for residential energy efficiency upgrades including heat pumps.

Households participating in EmPower+, Comfort Home, using a participating heat pump contractor, or participating solar contractor are eligible to apply for NYSERDA lien-free, financing options. If you are a renter, your landlord can use these options. There are no dealer fees on NYSERDA loans.

If the property is located in a geo-eligible area, your household may qualify for the lower interest loan regardless of income. These loans are available for rental properties too. The interest rate is based on renter’s income.  

Get an estimate of your interest rate on NYSERDA’s Residential Financing Options page.

On-Bill Recovery Loan

The On-Bill Recovery Loan is a NYSERDA loan in which your loan payments are built directly into your utility bill. With this loan, your monthly payments may not exceed your estimated average monthly energy cost savings.  So your energy savings essentially pay for your work. Loan amounts of $1,500-$25,000 with terms of 5, 10, or 15 years. Interest rates are 4.5% for households incomes below 80% area median income (AMI) or in a geo-eligible area to 8% for over 80% AMI. Must be using a major utility like NYSEG, RG&E, National Grid, etc. Customers of municipal electric coops and rural electric coops are not eligible. 

Smart Energy Loan

The Smart Energy Loan is another NYSERDA loan which is more traditional, with a monthly payment to NYSERDA’s loan servicer. Amounts are from $1,500-$25,000 (cap regardless of number of units) with terms of 5, 10, and 15 years. Rates range from 4% for auto-pay to 4.5% for pay by check for households incomes below 80% area median income (AMI) or in a geo-eligible area to 7.5% for auto-pay to 8% for pay by mail for over 80% AMI. Does not matter who your utility is. 

Other Financing Options & Local Banks

Your contractor may be able to offer you other financing options, just be aware of potential liens and dealer fees (NYSERDA loans do not have this) that can inflate the loan amount.  And you may also want to consider a loan through a local bank. Home equity loans can often be useful for energy-related improvements. Some banks even offer special loans for energy projects which you can take advantage of.