New York state rebates for heat pumps, energy efficiency, and more

If you’re a New York state homeowner or renter who is looking to upgrade their home heating and cooling system, make their house more comfortable and energy efficient, or move toward cleaner electric appliances, you’re in luck. There are plenty of rebates offered by New York state, and these can be combined with the 30% tax credit from the Inflation Reduction Act for even larger savings.

This is all great, but one tricky thing for consumers is figuring out exactly which rebate program covers the upgrades they want to make. For example, some rebates are limited to low- and moderate-income households, and the size of the rebate for heat pump rebates depends on whether it’s replacing a fossil fuel (ie. propane or natural gas) furnace.

Each NY rebate program has a different name, which only adds to the confusion. The goal of this article is to let you know about every clean energy rebate available to homeowners and renters in New York state, and help you better understand how to qualify.

Why is New York offering rebates?

All of the rebates listed below benefit homeowners by lowering the cost of making homes more comfortable and energy efficient, which helps to lower energy bills. These upgrades can also make homes safer (by eliminating pollution) and more environmentally-friendly by reducing or eliminating the use of fossil fuels.

Encouraging homeowners to switch to electricity for heating is one way by which New York aims to meet its statewide environmental targets, which includes limiting greenhouse gas emissions to 60% of 1990 levels by 2030 and 15% of 1990 levels by 2050¹. Even though natural gas is still used for a significant portion of electricity generation, the amount of renewables used to generate electricity in New York is increasing every year. By 2040, it’s predicted that more than 60% of New York’s electricity will come from wind and solar, with the majority of the remainder coming from carbon-free nuclear and hydro.

A big reason why some of these rebates are available is the federal Inflation Reduction Act, which created the Homes Rebates Program. This program provides money to states to create rebate programs for home energy efficiency and electrification. States must apply for this money, and New York is among the first. In particular, New York is using this money to expand its existing EmPower+ program to offer substantial upfront rebates for heat pumps, insulation, and other projects.

What is NYSERDA?

Throughout this article I’ll mention NYSERDA, which is the New York State Energy Research and Development Authority. NYSERDA is a public benefit corporation, which means that it’s part government agency, part corporation. It’s mission is to promote renewable energy and energy efficiency in the state of New York. They’re the entity that operates the incentive programs described below.

It’s overseen by a 13-member board appointed by the Governor, but is otherwise operated like a not-for-profit corporation.

What can you get a rebate for?

Here’s a list of services and appliances for which you can get a rebate for in New York state:

• Home energy assessment to evaluate your home’s insulation and energy consumption
• Heat pumps for heating and cooling your home
• Home insulation and air sealing
• ENERGY STAR windows
• Heat pump hot water heaters
• Electric panel and wiring upgrades
• Minor upgrades such as high efficiency lighting, CO and smoke detectors, shower heads, door sweeps, and weatherstripping

This list doesn’t doesn’t include every rebate that might be available in New York, including those from your utility company or municipality, so be sure to check around.

Detailed summary of NY state rebates

The rebates available from New York state are summarized in the tables below. They’re listed by the household income needed to qualify, and also additional rebates for ConEd customers in Westchester county.

The first thing to do is identify whether your household income falls within the low- or moderate-income range. If it does, you’ll be eligible for more significant rebates. If your income is too high for those, you can still receive rebates on insulation, air sealing, heat pumps for heating and cooling your home, and heat pump water heaters. To check if your income qualifies, scroll down to the section on the EmPower+ program.

Start with a free home energy assessment

No matter what project you have in mind, it’s always a good idea to start with a home energy assessment. It’s free via NYSERDA, and it can help you find the least expensive ways to lower your energy bills and make your home more comfortable. A home energy assessment can also identify important safety issues, such as gas leaks and missing smoke and CO detectors.

The home energy assessment will be performed by a qualified contractor, who will check the insulation level in your home, test for air leaks, check for safety issues, and generally identify where you might be wasting energy. The contractor will use tools such as an infrared camera to see how much heat loss (or heat gain in the case of summer) is occurring through your walls and attic, or a blower door to pressurize your home to find air leaks.

The assessment will also identify safety issues, such as poor ventilation that may cause mold, missing carbon monoxide and smoke detectors, and gas leaks². My own home energy assessment found a small leak in the gas line supplying my hot water tank. It wasn’t big enough that I could smell the gas, but it was a leak that needed to be fixed nonetheless.

Home energy assessments are available to both homeowners and renters. If you’re a renter, there are some upgrades that only the landlord can authorize, but NYSERDA makes it clear that renters are within their rights to have a contractor perform an energy audit. NYSERDA states: “EmPower+ provides energy services to anyone who owns or rents a home and meets all of the eligibility requirements. There are limited energy efficiency improvements a renter can receive without landlord/building owner consent.”

If you’re a renter, you should first apply to NYSERDA’s EmPower+ program, which is the entry point for several of the rebates listed below. EmPower+ is for low- and moderate-income households. If you think your income might be too high to qualify, you should check anyway, because the income thresholds are adjusted for cost of living by area and the number of people in each household.

For homeowners, there’s no application process. Simply visit the Residential Energy Assessment page, pick a participating contractor, and send them a message from the NYSERDA website. The contractor will reach out to schedule the in-home assessment. They’ll take care of the paperwork, and you don’t have to pay anything.

To get started, visit this page on the NYSERDA website: https://www.nyserda.ny.gov/All-Programs/Residential-Energy-Assessment-Programs

EmPower+ provides major rebates for low- and moderate-income households

The largest rebates available are part of the EmPower+ program operated by NYSERDA. This program gives upfront rebates on home electrification upgrades.

As summarized in the table above, EmPower+ rebates can take a big chunk out of the price of a heat pump installation. If you don’t know what a heat pump is, you should read my article Heat Pumps for Homes: A Primer. The short answer is that a heat pump is used to both heat and cool a home, replacing the roles of both an air conditioner and a furnace. A heat pump runs entirely on electricity, making it safer to operate than a gas furnace which carries some safety risks, such as carbon monoxide leaks.

As mentioned earlier, the EmPower+ program receives funding from the federal Home Rebates Program, specifically the High-efficiency Electric Home Rebate (HEAR) part of the program. If you read my article on it, you might notice that the federal program specifies several electric appliances that are supposed to qualify, including electric ranges, heat pump clothes dryers, and heat pump water heaters.

However, EmPower+ currently only give rebates for heat pumps, insulation, and wiring upgrades. I reached out to NYSERDA for more information, and they said that they are currently working with the US Department of Energy on this program and will be announcing more rebates in the future as the program continues to be rolled out. I’ll be updating this page as this happens.

How to check your income eligibility for EmPower+

The EmPower+ rebates are available only to low- and moderate-income households. If you think that you might be ineligible because your income is high, be sure to check first because the income thresholds are based on the local median income and the number of people living in your household. This means that if you live in a higher income city with a large family, you might be able to qualify for rebates even if your income seems high.

To find out if you are eligible for EmPower+, visit this site: https://www.nyserda.ny.gov/All-Programs/EmPower-New-York-Program/Eligibility-Guidelines

Here’s how EmPower+ defines the income categories:

• Low income: 60% or less of the state median income (SMI)
• Moderate income: between 60% and 80% of the state or area median income (AMI)

Notice that low-income is defined using the state median income, but the moderate-income definition can use the local area’s median income if it’s higher. This means that if you live in an higher income area such as New York City, the moderate-income category will reflect that higher threshold.

How does the EmPower+ program work?

The EmPower+ program is intended to help make homes operate more cleanly and efficiently, and that starts with a whole-house energy assessment by a qualified contractor. After that assessment is done, the contractor will present recommendations on home upgrades that will have the most cost-effective impact.

Often that will involve insulation and air sealing, but it may also include a heat pump and any wiring upgrades that are needed to support the heat pump installation. As mentioned earlier, heat pumps for space heating and cooling and heat pump hot water heaters are the main focus of EmPower+, but the program may expand to cover other electric appliances in the future.

The process starts by creating an EmPower+ account, and then filling out the short application form online. You can also send in a paper form if you prefer. You’ll need to provide your utility company account numbers, which would include your electric, natural gas, or delivered fuel (such as propane).

What is the size of the energy rebates that you can receive in New York?

The total rebates you can receive are substantial: a maximum of $24,000 for low-income and $19,000 for moderate-income households.

The tables earlier in this article listed the rebates available in specific categories, such as up to $8,000 for heat pump and $4,000 if your electric panel needs to be upgraded. Homeowners can take multiple rebates, with a limit that is determined by income category.

Low-income households can receive a maximum of $24,000 in rebates, which can cover 100% of eligible costs. In other words, it’s actually possible for low-income households to receive major energy upgrades to their home for free.

If you qualify for the moderate-income category, you can receive up to $19,000 in total rebates, with 50% of eligible costs covered. This means that if the cost of your project is $10,000 before rebates are applied, you can receive up to $5,000 in rebates and you’ll have to pay the remaining $5,000.

However, in that situation, whatever amount you end up paying can be eligible for the 30% IRA federal tax credit, which mean that you can end up paying only 35% of the original cost.

If you read my article on the federal Home Rebates Program, you might notice that the federal guidelines specify a maximum rebate of $14,000 per project. So why is the EmPower+ program higher if it’s based on the federal HEAR program?

It’s because EmPower+ was an existing NYSERDA program, and the HEAR rebates were merged into this program. Because of that, existing EmPower+ program funding is still available, which raises the total amount of rebates that a household can receive.

How do you receive the EmPower+ rebates?

For the homeowner, the process of receiving the rebates is easy. Once your EmPower+ application is approved, you can work with an approved NYSERDA contractor on your project. The rebates that you qualify for are applied directly to your invoice. This means that you don’t have to carry the cost of the project and wait to receive your incentive later. The rebates are discounted right off the cost of the project.

Again, if you fall into the low-income category, this can mean that you don’t have to pay anything for your home upgrades. That’s a huge win.

EmPower+ requirements for getting a heat pump rebate

Heat pumps are all-in-one appliances that can heat your home in the winter and cool it in the summer. This means that, with a heat pump, you can ditch both your air conditioner and furnace.

Reducing fossil fuel use is the goal of this federally funded program, so there are a couple requirements to qualify for the $8,000 EmPower+ heat pump rebate. (Note that this only applies to EmPower+ and not the separate Comfort Home Program.)

The first is that the heat pump must replace an existing fossil fuel or electric resistance furnace. This doesn’t mean that the old furnace must be removed: it can either be removed or retained as backup heat for extremely cold days when the heat pump works less efficiently. (This is the setup I have in my own home.)

Here are the key requirements:

• The heat pump system must replace an existing fossil fuel heating system that is at least 5 years old.
• The existing heating system can be powered by oil, propane, coal, electrical resistance, kerosene, or wood.
• If you have a natural gas furnace, you can use this rebate only if the old furnace has an efficiency (AFUE) of 80% or worse and the contractor can show that the heat pump will reduce the utility bill by at least 10%.
• The heat pump system must be sized to meet 100% of the home’s average heating needs. The system can include supplemental heating, such as strip heating, with up to 5 kW of output OR use an existing wood stove or electric baseboard heater to achieve 100%.
• The home must be insulated to the levels described in the table below.

Here are the insulation requirements for EmPower+:

This will bring the home up to a good standard of insulation. However, New York has many older homes that might not be upgradable to this standard. In those cases, the home won’t qualify for this rebate.

The efficiency guideline for homes with an existing natural gas furnace means that if the furnace is newer and more efficient, the household won’t qualify for this rebate at this time – which makes sense for maximizing the savings for households. However, NYSERDA has stated that this policy will be reviewed in the future, so watch this article for any future updates.

For all the technical requirements needed to qualify for the heat pump rebate, you can read the program manual for EmPower+³.

Can renters take advantage of EmPower+?

According to NYSERDA, renters are able to take advantage of some aspects of the EmPower+ program:

EmPower+ can provide some limited electric reduction services to your apartment where possible, but landlords are encouraged to participate in order to provide you with a more comprehensive project. EmPower+ provides energy services to anyone who owns or rents a home and meets all of the eligibility requirements. There are limited energy efficiency improvements a renter can receive without landlord/building owner consent.

If you’re a renter, it’s obviously best to reach out to your landlord, especially if you have concerns about the health and safety of your home (such as missing CO and smoke detectors). They may also be unaware of these rebates, which can help them upgrade their rental property for a reduced cost or even free.

However, NYSERDA does state that renters are within their rights to have some upgrades done without notifying their landlord.

Big rebates on insulation, air sealing, and efficient windows with Comfort Home

If you took advantage of New York’s free Residential Energy Assessment, you will have a list of priority upgrades you can make to your home. If you have an older home like many people in New York state do, insulation and air sealing will probably be at the top of the list.

That’s when NYSERDA’s Comfort Home program is a great benefit: it provides rebates on air sealing, insulation, and ENERGY STAR windows. Comfort Home is designed to package these upgrades together to make it more economical for both homeowners and the contractor. There are three package options:

• “Good” package: Seal and insulate attic and rim joist – $1,600 in rebates
• “Better” package: Seal and insulate attic and rim joist, insulate walls and floors – $3,000 in rebates
• “Best” package: Seal and insulate attic and rim joist, insulate walls and floors, retrofit windows to ENERGY STAR: $4,000 in rebates

It’s worth taking a minute to explain what a rim joist is, which is an often overlooked source of air leaks, especially in older homes. The rim joist is where the framing of your home meets the foundation. If the interface between the rim joist and the foundation hasn’t been well sealed, a lot of air can leak through.

This is something I noticed in my own home, which was built in 1910. Especially on cold days, I could feel air rushing in through large unsealed gaps all around the joist. I didn’t need an expert analysis to tell me that this was a big source of energy loss.

Stopping these leaks, especially with closed cell foam that provides high insulating value, can be a high return on investment.

Other upgrades that are often a high return on investment is blowing cellulose insulation into an attic or into walls that are underinsulated. Insulating an unconditioned attic is an especially good return on investment because it’s a relatively easy upgrade in terms of labor required.

Switching to ENERGY STAR double- or triple-glazed windows can also be good upgrade, but new windows will usually have a lower return on investment than insulation and air sealing, and may not pay for itself in lower utility bills even with the Comfort Home rebates. However, if you have damaged older windows that leak badly or you also want new windows for aesthetic reasons, this rebate can provide the incentive you need to make the upgrade.

Unlike the EmPower+ program, households at any income level can take advantage of Comfort Home. To apply, you can fill out a 2-minute survey on the NYSERDA website at the link below:

https://www.nyserda.ny.gov/All-Programs/Comfort-Home-Program

Heat pump rebates from the NYS Clean Heat program

For households with an income that is too high to qualify for EmPower+, the NYS Clean Heat program can help any household save money on the installation of a heat pump.

Clean Heat provides rebates for several types of heat pumps for the home, including mini-split (ductless) and ducted heat pumps for heating and cooling, air-to-water (hydronic) heat pumps for homes with radiant heating, ground-source (geothermal) heat pumps, and heat pump hot water heaters.

The size of rebate varies according to your utility company and the capacity of the heat pump, which is typically specified in tons. (12,000 British thermal units is equal to one ton.) Check with your contractor for the latest rates, but the table above gives you an idea of how much money you can save.

Clean Heat rebates are applied directly to your invoice, so you don’t need to wait to receive them. One important detail is that the rebate can be used to reduce your invoice by a maximum of 50%. It covers the equipment and labor, but not taxes. This means that if your rebate is more than half of your invoice price, not including taxes, you’ll only get a discount of 50%. (Which is still great!)

NYS Clean Heat offers rebates for several types of heat pumps, so the table of rebates can be confusing if you’re not familiar with the technology. For most homeowners in North America, an air source heat pump is the best and most common choice. These come in mini-split (also known as ductless) configurations as well as ducted for homes with forced air systems. You can read my article on ductless vs ducted heat pumps to learn more.

Air-source heat pumps are also available in cold climate models that are certified to work more efficiently in extremely cold weather, such as Nordic countries where they are very popular.

While ground-source (also known as geothermal) heat pumps have higher efficiency, they are more expensive to install, and the increased efficiency of cold climate air-source heat pumps negates some of this advantage at lower cost.

The Clean Heat rebate for a cold climate air-source heat pump ranges from $600 to $960 per ton. The average home will need between a 2 and 5 ton heat pump for all its heating and cooling needs. This means that your rebate could be between $1,200 and $4,800, depending on the size of the heat pump and your utility company.

According to HomeAdvisor, the average installed cost of a heat pump system ranges from $3,500 to $8,800 for heat pumps in the 2 to 5 ton range. With the Clean Heat rebate, you could end up paying half the retail price. On top of that, you can get a 30% federal tax credit with the Energy Efficient Home Improvement Credit.

However, you can receive an even larger rebate if you are replacing an existing fossil fuel-powered furnace with a cold climate heat pump. The heat pump must be sized to meet 100% of your average heating requirements, which means that the heat pump should be providing all of your heating needs except on the coldest days of the years. There are two categories for the furnace replacement scenario:

• Your existing furnace is retained to operate as a supplemental heat source on extremely cold days. In this scenario, the thermostat will automatically switch over to the furnace when the outdoor temperature is too cold for the heat pump to operate efficiently. For this category, the rebate is $840-$1,200 per ton.
• The existing furnace is decommissioned. This means that the furnace is removed and any gas lines to the furnace are capped. The rebate for this category is $1,200-$1,680 per ton.

Completely decommissioning a furnace gives you a much larger rebate: it means that for a 3 ton heat pump, your rebate could be as much as $5,040, compared to $2,880 for a non-replacement scenario.

If you have an old furnace, as many New York homes do, this rebate is a great opportunity to switch to a cleaner and safer heating source.

If you’re interested in reading the qualification requirements in depth, you can read the NYS Clean Heat program manual⁴.

NYS Clean Heat program heat pump (hybrid) hot water heaters

Another notable NYS Clean Heat rebate is for heat pump water heaters. It’s an upfront rebate worth between $700 and $1,000, depending on your utility company.

A heat pump hot water heater looks a lot like a standard gas or electric hot water heater, except that the top of the unit has a small heat pump. It takes heat from the surrounding air to create hot water for showers and another domestic hot water needs.

These are also known as hybrid hot water heaters, and are slowly growing in popularity. They’re a great way to eliminate another source of pollution and fossil fuel use in your home, but they do have some disadvantages. You can read my article on hybrid hot water heaters to learn more.

Hybrid hot water heaters are quite a bit more expensive than conventional units: they range from about $1,500 to $3,000, not including installation. However, the NYS Clean Heat rebate takes a big chunk out of that price, which makes this emerging technology a lot more appealing.

ConEdison customers in Westchester county can get additional rebates

NYSERDA has partnered with Consolidated Edison (ConEd) ConEd customers to encourage residents in Westchester county to make their homes more energy efficient. Through this program, homeowners can get rebates on heat pumps and energy efficiency upgrades.

ConEd gas and electricity customers are eligible. Depending on the number of people in a household and income level, the ConEd incentive can be as much as $4,000 and cover up to 70% of the project cost. To learn more, visit this ConEd page: https://www.coned.com/en/save-money/rebates-incentives-tax-credits/rebates-incentives-tax-credits-for-residential-customers/savings-to-weatherize-your-home

Bottom line: NY rebates make energy efficiency a lot more affordable

If you’re a homeowner in New York state who wants to upgrade their home to be more comfortable, energy efficient, cleaner and safer, there are a wide range of rebates available for every household income level. Some are even free.

These rebates are taken off the invoice price, helping to make them more accessible because there’s no waiting for a rebate check.

And not only that, but you can also use the Energy Efficient Home Improvement Credit to get a 30% federal tax credit on top of that. This means that you can make significant upgrades that improve the environmental friendliness and value of your home for less money than you might think.

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