Are you interested in making the transition from a fossil fuel based heating system to a geothermal heat pump but don’t understand the available incentives? We are here to help! Today, we are addressing the National Grid Geothermal Heat Pump Incentives available customers in Western New York!
Geothermal Incentives and Rebates in National Grid Territory
To encourage the adoption of geothermal heat pumps, several financial incentives and rebates are available to homeowners in Western New York within the National Grid electricity territory. Here’s a breakdown of the key programs:
1. National Grid’s Clean Heat Rebate Program
National Grid offers substantial rebates to customers who install geothermal heat pumps through the Clean Heat Program. The rebates can cover a significant portion of the installation costs, making it easier for homeowners to invest in this green technology. The rebate amount varies based on the size and type of the system installed, so it’s essential to consult with a certified installer to understand the specific benefits for your project.
There is currently a temporary increase in the available rebate incentive valid through 9/30/2024 only available to National Grid customers. This increase results in the average incentive going from $7750 to $11,155!
| Rebate Type | Standard Rebate | Rebate Available 8/1/2024-9/30/2024 |
| Geothermal Heat Pump | $1500 per 10,000 BTUs of Full Load Heating Capacity | $2,200 per 10,000 BTUs of Full Load Heating Capacity |
3. Geothermal Federal Tax Credits
Homeowners can also take advantage of the federal tax credit for geothermal heat pump installations. This tax credit covers 30% of the total system cost (including labor and equipment).
| Federal Tax Credit Through 2032 | Federal Tax Credit Through 2033 | Federal Tax Credit Through 2034 |
| 30% of Installation Cost | 26% of Installation Cost | 22% of Installation Cost |
4. 25% New York State Geothermal Tax Credit
In addition to the federal and utility-specific incentives, New York State offers a 25% State Tax Credit on the installation cost of a geothermal heat pump systems put in service after 1/1/2022.
The New York State tax credit cap is $5,000 for all installations.
For more details on the New York State tax credit, you can view the New York State Department of Tax and Finance website here: New York State Tax Form IT-267
5. NYSERDA Low-Interest Geothermal Financing Options
For those concerned about the upfront cost, low-interest financing options are available through programs like NYSERDA’s On-Bill Recovery Loan and Smart Energy Loan. These financing options allow homeowners to pay for their geothermal system over time through their utility bills, making it more manageable to budget for this energy-saving investment.
The added benefit to the NYSERDA GJGNY Program is that they offer home address based interest rates. If you live in an area designated as being within an Area Median Income (AMI) threshold, you may be eligible for a reduced rate. If your credit qualifies, and you live within one of these designated areas, you can become eligible for a reduced interest rate. To determine if you are eligible for these interest rates, you can enter your address on the NYSERDA website here: Residential Interest Rates
| Rate | 3.49%-3.99% | 7.49%-7.99% |
| How to Qualify | – Income Eligibility – Zip Code Eligibility – Credit Check | – Income Eligibility – Credit Check |
| Eligible Technologies | Geothermal Heat Pump | Geothermal Heat Pump |
New York State’s Low-Interest financing is provided by the GJGNY Program. Details on the program can be found here: NYS Geothermal Financing
If you are interested in the NYS Geothermal Financing, give our team a call! We have dedicated staff to support loan applications that can explain the program and walk you through the process!
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 ($2200 per 10,000 BTU of Full Load Heating Capacity) | -$11,1550 |
| Customer Contract Price | $33,845 |
| 30% Federal Tax Credit | -$10,153.50 |
| 25% State Tax Credit ($5,000 cap) | -$5,000 |
| Expected Installation Cost After Incentives | $18,691.50 |
How to Get NY Geothermal Incentives:
- Consult with a Certified Installer: To access these incentives, it’s essential to work with a state-approved geothermal installer who is familiar with the local programs and requirements.
- Apply for Rebates and Credits: Ensure you complete the necessary applications for rebates and tax credits. At ACES Energy, we apply for the rebates directly and credit your contract upon signing so you never need to pay for rebates and then apply for them later on.
- Take Advantage of Financing: Explore financing options to spread the cost of your investment over time.
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