Worcester Business Journal

wbjournal.com | June 2, 2025 | Worcester Business Journal 13 ENERGY & SUSTAINABILITY F O C U S systems, which can only switch between being on at full blast and off. If buildings have existing duct work, heat pumps can be plugged directly into that infrastructure. If they don't have ducts, they can still find a different way to utilize pumps, said Kolia. "e good thing about heat pumps is there's duct-less or ducted options," he said. "It can be a retrofit, depending on what you have on site, or it could be a whole new layout just to accommodate the business' needs." Incentives and costs Massachusetts has strong heat pump incentives for homeowners compared to other markets, said Staudt. rough the state's MassSave program, homeowners are eligible for rebates of $3,000 per ton for a whole-home installa- tion or $1,250 per ton for a partial-home installation, with a maximum of $10,000, according to the program's website. For low-income households, an income-based program allows for up to $16,000 in rebates. e standard incentives could bring a whole-home installation cost down from $22,000 to $12,000, while income-based incentives could bring that cost down to $6,000, not including potential federal tax credits. MassSave offers 0% interest financing for heat pump installation costs, up to $25,000. Massachusetts "is one of the best programs in terms of the rebates that are available," Staudt said. "To have a rebate of up to $10,000 is not common in other states." Specifics vary, but incentives are avail- able for multi-family properties. Incentives are strong in Massachu- setts on the commercial business side of things, said Kolia. "Massachusetts incentives are pretty generous when you look at the project cost and then the money reimbursed," he said. "It's larger than Connecticut and a lot of competing states." Commercial incentives vary by heat pump type, ranging from $2,500 per ton for air-source heat pumps to $4,500 per ton for ground-source pumps. Outrunning the tariffs While state-level incentives are strong, federal tax credits for heat 2 3 4 5M Gas furnaces (in millions) Heat pumps (in millions) 2.35M 2.73M 4.12M 3.12M '14 '15 '16 '17 '18 '19 '20 '21 '22 '23 '24 Annual U.S. shipments of gas furnaces and heat pumps National shipments of heat pumps surpassed gas furnaces for the first time in 2022. Source: Air Conditioning, Heating, & Refrigeration Institute, Monthly Shipments Report via RMI.org pumps are being targeted by Republican lawmakers. e Federal 25C Energy Efficient Home Improvement Credit, an incen- tive signed into law in 2005 by President George W. Bush and providing up to $2,000 in credits towards heat pump systems, is targeted for elimination in the budget bill passed by House Repub- licans on May 22, according to clean energy news site Canary Media. The trade wars embarked upon by the President Donald Trump Admin- istration may impact the heat pump industry. China is responsible for 95% of the world's heat pump compres- sors in 2023, according to a February report from the International Energy Agency. About 40% of global heat pump manufacturing happens in China, with a further 15% happen- ing in the European Union, another potential tariff target. While the potential end of federal incentives and rising costs due to tar- iffs may lead to a cooling of the heat pump market, right now it's having the opposite effect, as consumers rush to get their installations done before changes are implemented. "Uncertainty on tax credits has actually driven some demand, because people think 'I want to get this done when I know I have that tax credit available," Staudt said. "With tariffs, right now we have equipment that's available to us right now in the U.S. on the ground. When I'm speaking to homeowners, I'm telling them that if we come back in the fall, we don't know what the equipment is going to cost us." IMAGE | ADOBESTOCK.COM PHOTO | COURTESY OF MASS SAVE W

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