In this post, we’ll walk you through the various geothermal incentives available in New York State, including federal and state-level rebates, as well as utility-specific programs that make geothermal systems more accessible.
Clean Heat Rebate Program – For Public Utility Customers (National Grid, NYSEG or RG&E in Western New York)
New York State offers the Clean Heat Rebate Program, designed to incentivize homeowners to switch to high-efficiency heat pump systems like geothermal. The rebate amount varies based on the type of system installed, the size of your home, and your location. This program is available for both residential and commercial properties, making geothermal heating more financially accessible for a variety of consumers.
How It Works:
- The Clean Heat Rebate covers up to 50% of your geothermal installation cost, depending on the system size and your household’s heating and cooling needs.
- The total rebate amount is a flat rate per installation (not per unit)
- This rebate is only available to those without an existing heat pump.
- The rebate is available for new construction homes.
- To get the rebate, you must work with a Clean Heat approved contractor (like ACES Energy!)
- ACES Energy offers the rebate as an upfront credit on your contract, meaning you never have to pay the value of the rebate towards your installation and get a refund afterwards.
| Utility | Rebate Value |
|---|---|
| National Grid | Retrofit: $20,000 New Construction: $14,000 |
| RG&E | Retrofit: $17,000 New Construction: $10,000 |
| NYSEG | Retrofit: $17,000 New Construction: $10,000 |
Municipal Utilities Operating Under the IEEP
Municipal utilities in New York participating in the Independent Energy Efficiency Program (IEEP), offer a variety of energy efficiency programs, including incentives for geothermal heat pumps.
NYS Municipal IEEP Utility Heat Pump Rebate:
- $2,000 per unit (must be Energy Star certified)
- Homeowners should check with their local utility provider to confirm the availability of specific geothermal incentives and application requirements.
- This rebate requires a pre-approved application that ACES can submit.
Tax Credits for Geothermal Systems
In addition to utility rebates, there are significant state tax credits that make installing a geothermal heat pump even more affordable.
1. 25% New York State Tax Credit
New York State offers a 25% tax credit (with a cap of $10,000) for geothermal system installations. For further details on the NYS tax credit, visit this link: NYS Geothermal Energy Systems Credit.
Combining Geothermal Incentives
Geothermal Heat Pump incentives can be stacked to maximize your savings! See the example below on what your installation costs could be if you utilize all available incentives and rebates.
Example Geothermal Project Installation Cost with Available Incentives
| WaterFurnace Geothermal Installation | Pricing |
| Total Geothermal Installation (average 1500-2500 sq/ft home) | $45,000 |
| Clean Heat National Grid Rebate (retrofit $20,000) | -$20,000 |
| Customer Contract Price | $25,000 |
| 25% State Tax Credit ($10,000 cap) | -$5,000 |
| Expected Installation Cost After Incentives | $20,000 |
This pricing model is only an example for those with National Grid. Please contact ACES Energy to set up an appt to receive a quote specific to your home.
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