This page contains information on incentives for heat pumps—air-source and ground-source (aka “geothermal”)—, for wood and pellet stoves, as well as information on financing options.

HEAT PUMPS

Air-source heat pumps:

  • NYSEG offers a rebate (through the NYS Clean Heat program) of $2-13,000 depending on size of home, weatherization level of home, and whether you remove your fossil fuel equipment, with a higher incentive for residents of NYS-designated Disadvantaged Communities.

  • The municipal electric Independent Energy Efficiency Program (IEEP) provides $1,200 for a whole-home system and $800 for a partial system.

  • Grant funding from NYSERDA’s EmPower+ program can sometimes be used towards heat pump installations. This program is for income-eligible households.

  • Income-eligible households in some counties may qualify for an additional grant through the Finger Lakes Climate Fund, including significant incentives for income-eligible renters.

  • Lansing area residents may also qualify for additional incentives through a NYSEG-funded program (administered by Earth Sensitive Solutions). CCE Tompkins has a webpage about this program.

  • NYS Resilient Retrofits (administered in the Southern Tier by Home Headquarters) offers a 50/50 loan/grant of up to $50,000 for flood resilience measures, which can include installing air source heat pumps.

Ground-source heat pumps, also known as geothermal, remove heat from underground, and are more efficient than air source heat pumps. 

  • NYSEG offers a rebate (through the NYS Clean Heat program) of $7,500-21,000 depending on size of home, weatherization level of home, and whether it’s new or existing construction, with higher incentive for residents in Disadvantaged Communities.

  • State tax credit of 25% up to $10,000 (raised from $5,000 as of July 2025)

  • Grant funding from NYSERDA’s EmPower+ program can sometimes be used towards heat pump installations. This program is for income-eligible households.

  • Lansing area residents may also qualify for additional incentives through a NYSEG-funded program (administered by Earth Sensitive Solutions). CCE Tompkins has a webpage about this program.

  • NYS Resilient Retrofits (administered in the Southern Tier by Home Headquarters) offers a 50/50 loan/grant of up to $50,000 for flood resilience measures, which can include installing ground source heat pumps when paired with another flood resilience improvement.

Pellet stoves

Income-eligible households can access incentives for pellet stoves that replace existing wood or pellet stoves through NYSERDA’s EmPower+ program. We are not aware of any current incentives for installing new wood stoves.

Furnaces and Boilers

For income-eligible households needing to replace a furnace or boiler that has stopped working, see funding options listed on our No-Heat webpage. For those above the income limits, or who are electing to replace a functioning furnace or boiler, the only funding option we are aware of for new furnaces or boilers is financing (see information below). Or, explore at the top of this page the incentives available for switching to heat pumps.

FINANCING

In addition to the rebates mentioned above, there are a number of financing options to help pay for energy-related improvements. Contractors and our Community Energy Advisors can provide additional information on these options, but we provide an overview below.

On-Bill Recovery Loan

The On-Bill Recovery Loan is a NYSERDA loan in which your loan payments are built right into your utility bill. With this loan, your monthly payments may not exceed your estimated average monthly energy cost savings. So your energy savings essentially pay for your work. Loan amounts of $1,500-$25,000 with terms of 5, 10, or 15 years. Rates are 3.49% to 3.99% for low-income households, 4.99% for households with moderate income, and 6.99% or 7.49% for everyone else.

Smart Energy Loan

The Smart Energy Loan is another NYSERDA loan is more traditional, with a monthly payment to NYSERDA's loan servicer. Amounts are from $1,500-$25,000 with terms of 5, 10, and 15 years. Rates range from 3.49% for lower income households who pay by auto payment to 7.49% for upper income households who pay by check.

Other Financing Options & Local Banks

Your contractor may be able to offer you other financing options. And you may also want to consider a loan through a local bank. Home equity loans can often be useful for energy-related improvements. Some banks even offer special loans for energy projects which you can take advantage of.