Key Mass Save® Updates for 2025

‍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. 

Mass Save 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.

Mass Save rebates at a glance:

How Mass Save Rebates by the Ton Could impact you: 

This change will disproportionately affect smaller households looking to do whole home rebates. If your home is under 1,200 square feet, your heat pump needs will likely be less than 3 tons, which would mean you would receive less than $10K rebate maximum.

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.

‍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.‍

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:

1. 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
2. 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 7 yr HEAT loan bracket and receive 0% interest financing your total household income 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 and would see no changes to their monthly costs. 
• Households earning 135%-300% SMI: For a 2 person household, the income to fit this bracket would be from $86K to $192K. A household in this income bracket would be limited to 5-year terms, 0% interest. The monthly cost increase will be 40%.
• Households earning above 300% SMI: For a 2 person household making above $192K they would be limited to 3-year terms, 0% interest. Their monthly cost increase would be 133%.

These shortened terms will require significantly higher monthly payments, so plan accordingly when budgeting for your upgrades. This might sound confusing, but it doesn’t have to be. Our team does the work of understanding and customizing a proposal that includes Mass Save financing options personalized for you.

What all these 2025 Mass Save Rebate changes means for homeowners

• Homeowners with lighter HEAT loads, will receive lower rebates: 
• 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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