Resources, Rebates, and Tax Credits to Help You Go Green at Home
Last updated November 2022
Our discussion on how to save energy at home briefly hits on more than 30 changes you can can make in and around your home, from cheap-yet-effective steps to upgrades that require upfront spending, but quickly pay for themselves from lower utility bills to systems and renovations that minimize what you pull off the grid, but come at steep prices.
Rebates and Tax Incentives to Help Pay for Green Improvements
More efficient heating and air-conditioning equipment often costs more, but their higher price tags can be reduced by incentives available from governments and utility companies.
Below are the programs that we could identify as of November 2022. Check Energy Star’s website for up-to-date info. Also check with your utility company and the Database of State Incentives for Renewables & Efficiency (DSIRE).
Before starting a project, confirm you qualify. Some programs require homeowners to work with utilities’ “approved” contractors or to file paperwork before installations occur to get rebates.
We didn’t include low-interest loan programs, which are most often available for new home construction. We also didn’t look for community grants for multi-home projects or incentives for commercial buildings. There are also numerous programs available to landlords of apartment buildings.
Federal Tax Credits and Rebates
Starting in 2023, there are two programs.
The “Energy Efficient Home Improvement Credit” revives expired tax credits for homeowners who make green improvements to their primary residences. The credit is equal to 30 percent of the cost of eligible improvements made between 2023 and 2032, with the following maximum allowable credits:
- Air-source heat pumps and heat-pump water heaters—$2,000 for most systems
- Biomass stoves and boilers—$2,000
- Central ACs—$300 for most systems
- Gas and oil furnaces—$150 for units with 95+ AFUE
- Energy audits—$150
- Air-sealing improvements—$600
- Exterior doors—$250 per door, $500 limit for multiple doors
- Windows and skylights—$600
Except for heat pumps and biomass stoves and boilers, for the projects listed above there’s a maximum tax credit of $1,200 each year. If your credit is higher than $1,200, or if you pay less than $1,200 in income taxes for that year, you can roll over excess credit amounts to future tax years. If you buy a qualifying heat pump, biomass stove, or boiler, the annual tax credit cap for that year gets raised to $2,000.
There are also 30 percent federal tax credits for residential solar energy projects (including storage batteries) and ground-source heat pumps, with no caps on total credit amounts. In 2033, these credits drop to 26 percent and then to 22 percent in 2034; after that, they’ll disappear unless new legislation gets passed.
There are also local incentives for solar-energy projects. The programs available to homeowners in Massachusetts are particularly generous. Click here for our advice on buying solar energy systems.
Starting in 2023, there are also federal rebates available from the new “High-Efficiency Electric Home Rebate” program. These aren’t tax credits; they’re point-of-sale rebates that homeowners will receive as discounts as they make approved improvements.
These rebates are tied to household income. To get the full rebate amount, your household income must be less than 80 percent of the Area Median Income (AMI); if your household income is 80 percent to 150 percent of the AMI you can get 50 percent of each rebate amount; households with AMIs higher than 150 percent do not qualify for the program.
According to Fannie Mae, the AMI for the Boston area for 2022 is $133,300. That means those with household incomes of less than $106,640 will qualify for the full following rebate amounts, listed below; those with incomes between $106,640 and $199,950 can qualify for 50 percent of these amounts:
- $8,000—heat pumps when installed to replace existing gas-, oil-, or propane-burning furnaces or baseboard heat as the home’s sole heating source
- $1,750—heat pump water heaters
- $840—heat pump clothes dryers
- $840—replace gas stove with electric model
- $1,600—insulation, air sealing, and ventilation improvements
- $4,000—electrical panel upgrade if needed to power above improvements
- $2,500—electrical wire upgrades if needed to power above improvements
- $2,000—air sealing, insulation and other retrofitting projects that reduce home’s energy usage by 20 percent or more; $4,000 if they save 35 percent or more
For households that make more than one improvement, there is a maximum $14,000 rebate.
Confused by all this? We were, too! Rewiring America built a brilliant calculator that can help estimate what you’ll likely qualify for.
Mass Save Programs
As of fall 2022, Mass Save was offering several generous rebate programs, listed below. It is possible Mass Save will cut or curtail some or all of these incentives as it incorporates the new federal rebate programs for 2023. Check with Mass Save for up-to-date info on incentives.
- Gas furnaces—$200 rebate for units with 95 AFUE or better and equipped with electrically commutated motors; $950 rebate for combined condensing furnaces with on-demand water heater with 97 AFUE or better
- Gas boilers—$1,600 rebate for combined condensing furnaces with on-demand water heater with 95 AFUE or better
- Oil furnaces—$650 rebate for units with 86 AFUE or better and equipped with electrically commutated motors
- Air-source central heat pumps—$10,000 rebate for units with SEER 16 and HSPF 9.5 or better when installing system as sole source of heating for home; $1,250-per-ton rebate (up to $10,000) for adding an efficient heat pump as a partial-home heating source; $500 to $1,500 rebate for adding integrated controls to hybrid heating systems
- Mini-split heat pumps—Up to $10,000 rebate for installing energy efficient systems as sole source of heating for home
- Air-to-water heat pump systems—$10,000 for installing energy efficient models
- Room ACs—$40 rebate for Energy Star-certified models
- Programmable thermostats—$25 to $100 rebate per unit, depending on model; free installation
- Ground-source (geothermal) heat pumps—$15,000 rebate for Energy Star-certified units when installing system as sole source of heating for home; $2,000-per-ton rebate (up to $15,000) for adding a ground-source heat pump as a partial-home heating source; $500 to $1,500 rebate for adding integrated controls to hybrid heating systems
- Heat-pump water heaters—$750 rebate for eligible projects
- Gas storage water heaters—$100 for Energy Star-certified models
- Tankless water heaters—$700 for Energy Star-certified models
- Air sealing and insulation improvements—Discounts of 75 to 100 percent, depending on project and energy savings attained
- Clothes dryers—$50 rebate for Energy Star-certified models
- Clothes washers—$150 rebate for eligible projects
- Dehumidifiers—$30 rebate for Energy Star-certified models
- Induction stoves—$500 rebate for Energy Star-certified models
Home Energy Saver pro
Tool from the U.S. Department of Energy that estimates cost vs. benefit of making various energy-saving improvements; we found using the “Detailed input” option helped generate the most accurate assessments
Certifies energy-efficient appliances and HVAC equipment
Nonprofit that advocates for energy efficiency, especially through electrification projects.
Database of State Incentives for Renewables & Efficiency
Rebates and tax incentives available from utilities and governments
Efficient Windows Collaborative
Help with window selection and estimating cost savings
National Renewable Energy Laboratory
Research and publications on renewables; offers a calculator that estimates energy production and cost of solar installations
Ratings of appliances, lightbulbs, window A/C units, etc.
Residential Energy Services Network
Certification for energy auditors
Passive House Institute U.S.
Certification and training for net-zero energy-use builders, contractors, and manufacturers
Zero Energy Project
Advice and lists of products and suppliers for home buyers, builders, and designers interested in net-zero energy-use homes
EPA WaterSense Rebate Finder
Database of available rebates for installing water-saving devices
Tons of practical green tips, plus database on recycling centers and where to dispose of hazardous household waste
Fantastic for finding nearby farmers markets, CSAs, and other sources of locally grown food
National Resources Defense Council
Environmental research and watchdog group
Thousands of DIY videos from experts (but also definitely-not-experts)