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We’ll see significant changes across a wide variety of Mass Save incentive amounts in 2025, the best course of action is take advantage of the program rebates as soon as possible.
At a glance:
- Starting in 2025, heat pump rebates will be disbursed at $3,000 per ton, potentially reducing rebate amounts for smaller homes under 1,200 square feet.
- Heat Loan terms will be reduced to 5 years for middle-income households and 3 years for higher earners, leading to much higher monthly payments.
- Heat pump rebates will continue to decrease on an annual basis after 2025, meaning this year is the best time to maximize your savings.
Big changes are coming to Mass Save rebates in 2025, changes that will impact how much you could save on your heat pump upgrade. If you’re interested in making the switch to a heat pump, you’ll need to act fast in order to take advantage of the 2024 rates. Let’s walk you through the key changes to Mass Save in 2025.
Rebates move to a per-ton basis
Starting in 2025, rebates will be calculated based on a per-ton basis rather than flat rates. The standard for whole-home Air Source Heat Pumps (ASHP) will now offer $3,000 per ton, up to a cap of $10,000 per home. The change from flat-rate rebates can significantly impact homeowners with smaller properties, particularly those under 1,200 square feet who may receive less than the $10,000 rebate compared to larger homes.
Heat loan terms will be much shorter
The popular 0% interest Mass Save HEAT Loan program will see a reduction in loan repayment terms for most income brackets. While households earning 81%-135% of the state median income (SMI) will continue to qualify for 7-year loans, those earning more will only be eligible for shorter terms of 5 or 3 years. This will lead to significantly higher monthly payments.
- A 5-year term will increase monthly payments by approximately 40% compared to a 7-year term. A $99/month payment will now be $139/month
- A 3 Year term will increase monthly payments by 133% compared to a 7 year term. A $99/month payment will now be $231/month
- This change will likely affect affordability for many households seeking financing for their upgrades.
Rebates will continue to decrease annually after 2025
After 2025, the incentive amounts for heat pumps will continue to decline annually, making it critical for homeowners to act soon to maximize savings. For example, the rebate for whole-home Air-Source heat pumps will decrease to $2,700 per ton in 2026 and $2,500 per ton in 2027.
Mass Save rebates at a glance:
A closer look at HEAT loan terms:
Heat loan terms prior to 2025 did not take income into consideration. Now HEAT interest terms will depend on your household % of State Median Income or SMI.
How to calculate your State Median Income Bracket:
The SMI is scaled based on household size. Here's how it looks for fiscal year 2024-2025:
- Determine 60% of SMI (a common baseline used in programs):
- Household of 1: $49,196
- Household of 2: $64,333
- Household of 3: $79,470
- Household of 4: $94,608
- Calculate the top of the SMI bracket to your household amount:
- Multiply each SMI baseline value by 1.35 to estimate the threshold.
- In order to qualify for the first HEAT loan bracket and receive 0% interest financing your household would need to be at or below the following
- Household of 1: $66,414
- Household of 2: $86,849
- Household of 3: $107,284
- Household of 4: $127,720
- Households earning 81%-135% SMI: For a 2 person household the income maximum to fit this bracket would be $86K. A 2 person households making less than $86K per year would continue to qualify for 7-year 0% interest terms.
- Households earning 135%-300% SMI: For a 2 person household the income maximum to fit this bracket would be $86K. A 2 person households making less than $86K per year would continue to qualify for 7-year 0% interest terms. Limited to 5-year terms, 0% interest.
- Households earning above 300% SMI: Limited to 3-year terms.
These shortened terms will require higher monthly payments, so plan accordingly when budgeting for your upgrades.
What these rebate changes mean for homeowners
- For smaller households: If your home is under 1,200 square feet, your heat pump needs may be less than one ton per room. This could potentially reduce the rebate amount you qualify for compared to the previous flat-rate structure.
- Loans will be less affordable: The reduction in HEAT Loan terms means that upfront affordability will become a bigger factor for most households, especially those outside the 81%-135% SMI bracket.
- Act now if you’re ready: With rebate amounts set to decrease in 2026 and beyond, 2025 is the best year to capitalize on the highest incentives.
Why switch to a heat pump?
Heat pumps are an energy-efficient alternative to traditional heating systems like oil, propane, or electric resistance. By upgrading to a heat pump, homeowners can significantly reduce their carbon footprint while benefiting from improved energy efficiency, safety, and comfort.
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Book your free consultation today
The 2025 updates to Mass Save rebates bring both challenges and opportunities. Whether you're looking to replace an outdated system or make your home more sustainable, now is the time to explore your options and make the switch. To take advantage of your rebate, book your free virtual estimate with Tetra today.
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