NY Heat Pump Incentives in 2026: What Rochester Homeowners Can Claim
The federal credits expired at the end of 2025 — but New York's did not. NYS Clean Heat rebates through NYSERDA ($1,000–$18,000 depending on equipment, household type, and DAC status) and the NY State Geothermal Tax Credit, now capped at $10,000, still stack on a single install.
The incentive picture changed at the end of 2025. The two federal credits that carried a lot of heat pump and geothermal projects are gone. What survived is entirely state-level — and for geothermal specifically, New York actually doubled its credit. Here's what Rochester-area homeowners can still claim, with the actual published figures.
First: the federal credits have expired
If you have read about a "30% federal tax credit" for geothermal, that information is now out of date. Both federal residential energy credits were terminated early by federal legislation signed in July 2025:
- Section 25D (the 30% credit, geothermal): not allowed for expenditures made after December 31, 2025.
- Section 25C (up to $2,000/year, air-source heat pumps): does not apply to property placed in service after December 31, 2025.
One practical consequence is good news: because there is no federal credit left to calculate, the old rule about utility rebates reducing your federal cost basis no longer affects anything. The NYS Clean Heat rebate simply comes off your invoice.
Everything below is the New York money that is still on the table. Consult your tax advisor about your own situation.
RG&E / NYSEG Clean Heat Rebates
NY's Clean Heat program is administered by your local utility. In the Rochester area that's RG&E or NYSEG. Rebate amounts depend on equipment, household type (single-family vs. apartment / single-family home under 1,000 sq. ft.), and whether your address sits inside a Disadvantaged Community (DAC).
National Grid customers: this table does NOT apply to you. The figures below are RG&E and NYSEG's published amounts for Rochester / Monroe / Ontario County. National Grid runs a separate NYS Clean Heat incentive schedule with different amounts. If your electric service is from National Grid (Syracuse area, Capital Region, etc.), call us at 585-368-8685 and we'll walk through your specific schedule.
| Equipment category | Non-DAC SF | Non-DAC Apt/SF<1,000sf | DAC SF | DAC Apt/SF<1,000sf |
|---|---|---|---|---|
| Cat 2 — ccASHP: residential full-load heating | $6,000 | $3,000 | $7,000 | $4,000 |
| Cat 2b — ccASHP with decommissioning | $10,000 | $5,000 | $11,000 | $6,000 |
| Cat 3 — GSHP retrofit | $17,000 | $7,000 | $18,000 | $8,000 |
| Cat 3 — GSHP new construction | $10,000 | $5,000 | $11,000 | $6,000 |
| Cat 4 — partial to full-load | $3,000 | $1,000 | $3,000 | $1,000 |
Water-heating add-ons: heat-pump domestic water heater $1,250; GSHP desuperheater $100. Source: RG&E and NYSEG published NYS Clean Heat incentive schedules. Amounts can change between program years — we verify your DAC status and current figures during the free quote.
NY State Geothermal Tax Credit
New York offers a state-level tax credit for ground-source heat pump installations: 25% of installation cost, and the cap doubled from $5,000 to $10,000 for systems placed in service on or after July 1, 2025. This credit is geothermal only — air-source heat pumps don't qualify. It stacks on top of the utility rebate, and it is now the largest tax-side incentive available on a geothermal install in New York.
Example: $50,000 geothermal retrofit, non-DAC single family
System cost: $50,000
RG&E / NYSEG Clean Heat (Cat 3 GSHP retrofit): –$17,000. The rebate comes off your invoice at install. Cost after the utility rebate: $33,000.
Federal ITC: –$0 (expired for systems placed in service after December 31, 2025)
NY State Geothermal Tax Credit (25%, capped at $10k): –$10,000. 25% of the $50,000 system cost is $12,500, so this install reaches the $10,000 cap. If your tax preparer computes the credit on cost net of the utility rebate instead, it would be 25% of $33,000 = $8,250. We quote the conservative figure.
Net out-of-pocket: ~$23,000. Total offset: ~54% of the install cost.
Numbers above are illustrative for a non-DAC single-family GSHP retrofit. Real figures vary by system size, address, DAC status, and tax situation. The NY State Geothermal Tax Credit interaction with utility rebates can shift depending on how a tax preparer classifies "qualified expenditures" — consult your tax advisor. We give you a personalized breakdown during the free quote, and we'll always quote conservative numbers so the actual outcome can't come in worse than promised.
Confirm your rebate amount — give us a call. Rebate amounts on this page reflect RG&E / NYSEG's published schedule, but the figure you actually qualify for depends on your address (DAC status), equipment choice, and whether you decommission a fossil-fuel system. Call us before you make assumptions about the final number. 585-368-8685
How to Claim
- Federal ITC: nothing to claim — the credit expired for systems placed in service after December 31, 2025.
- RG&E / NYSEG rebate: the rebate is processed by your installer before the equipment is ordered. We file with the utility on your behalf so the discount comes off your final invoice.
- NY State Geothermal Tax Credit: claim on your state return (Form IT-267 for geothermal residential).
We're not tax advisors, but we'll point you to the right resources and handle the utility-rebate paperwork.
More detail on the systems these incentives apply to: geothermal installs, cold-climate heat pumps, or our frequently asked questions.
Sources
- • RG&E Clean Heat program: rge.com/cleanheat
- • NYSEG Clean Heat program: nyseg.com/cleanheat
- • NY Clean Heat statewide: cleanheat.ny.gov
- • NYSERDA (state program oversight): nyserda.ny.gov
- • NY State Geothermal Tax Credit (25%, $10,000 cap): tax.ny.gov
- • Federal credit expiration (IRS guidance on the 2025 law): irs.gov
Want to know exactly which rebates apply to your house?
The DAC eligibility map + Clean Heat rebate tiers change quarterly. Send your info and we will look up your address before the visit so the numbers are real, not estimated.