Understanding the Federal and State Incentives for Geothermal Heat Pumps

Everything you need to know about geothermal heat pump incentives

What Federal, State, and Utility incentives apply to you as a homeowner?

In 2018, Department of Energy passed a Federal Tax Incentive for geothermal ground source heat pumps called the Investment Tax Credit (ITC). In the form of personal tax credits, these incentives save Dandelion customers thousands of dollars.

As a New York State homeowner, you qualify for the New York State Energy Research and Development Authority (NYSERDA) New York State Clean Heat Program. The State of New York and the 6 electric utilities that serve New York State have allocated substantial funding for ground source heat pump installations. Dandelion is an approved Participating Contractor in the program.

As a Connecticut homeowner you can qualify for DEEP (Department of Energy and Environmental Protection) geothermal heat pump incentives. Connecticut homeowners can qualify for $1,000s in geothermal incentives. Details are listed below.

Federal Tax Credit

Investment Tax Credit (ITC)

26% off the price of the system in 2021 & 2022, and 22% off the system price in 2023.

NY State Incentive

Under the New York State Clean Heat program each utility offers a unique set of incentives.

Scroll down to see what incentives your
utility offers.

CT State Incentive

Incentives vary depending on your heating fuel source.

Scroll down to see what incentives you
qualify for.

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Why is sooner better than later?

In 2021 and 2022, the federal tax incentives known as the Investment Tax Credit (ITC) will cover 26% of a Dandelion geothermal system. However, the percentage covered by the ITC will decrease to 22% in 2023, and 0% in 2024.

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How do the incentives work?

Select your location below:

New York

Connecticut

New York State's Clean Heat Program is administered by the homeowner’s utility. Let’s go over some important details to explain how these incentives are allocated.

Each utility has a unique incentive.

That means a homeowner who uses Con Edison will qualify for a different incentive amount than a homeowner who uses National Grid.

The incentive amounts are based on the installed heat pump’s total heating capacity BTUH.

Utility incentives range between $0.15 per BTUH and $0.285 per BTUH, depending on the utility.

A geothermal heat pump containing a desuperheater qualifies for an additional incentive.

Many, but not all, heat pumps installed by Dandelion include a desuperheater ─ a component that uses existing heat in the system to warm water.

This incentive is either $100 or $150 per heat pump, no matter its BTUH, depending on the utility.

That means a homeowner who uses Con Edison will qualify for a different incentive amount than a homeowner who uses National Grid.

Utility incentives range between $0.15 per BTUH and $0.285 per BTUH, depending on the utility.

Let’s dive into each utility’s incentives available to you by your utility after you install a new geothermal heat pump system in your home.

Utility

Geothermal
Heat Pump

Desuperheater

5 Ton Heat Pump
47,900 BTUH

5 Ton Heat Pump
With Desuperheater

Central Hudson

$0.20/BTUH

$150

$9,580

$9,730

Con Edison

$0.285/BTUH

$150

$13,802

$13,952

National Grid

$0.15/BTUH

$100

$7,185

$7,285

NYSEG / RGE

$0.15/BTUH

$100

$7,185

$7,285

Orange & Rockland

$0.20/BTUH

$150

$9,580

$9,730

Here's what you're entitled to as a Connecticut homeowner.

Both Eversource and United Illuminating offer geothermal heat pump incentives via the Energize Connecticut program (The following municipal utilities are not part of the Energize Connecticut program; Groton, Bozrah, Norwalk, Wallingford, and Norwich).

The Connecticut incentives are limited to $10,000 per household, or a 6.67 ton geothermal heat pump. See the table below for an example of what an average sized home that needs a 5 ton geothermal heat pump system would qualify for in Connecticut.

Heating Fuel

Incentive / ton

5 Ton Heat Pump

Fuel Oil

$1,500

$7,500

Propane

$1,500

$7,500

Natural Gas

$750

$3,750

Electric Resistance

$750

$3,750

Other

$750

$3,750

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The credit does not apply to equipment used primarily for pool or hot tub heating. It also does not apply to installation in rental homes. Dandelion Energy and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors.