Massachusetts regulators are considering a plan to make heat pumps an obvious financial choice for most residents.
The state Department of Public Utilities is mulling a proposal to heavily discount electricity rates in the winter months for households with heat pumps, a move that could cut energy bills for more than 80% of residents who switch over to the efficient, electric appliance from fossil-fueled or electric resistance heating. For many of those households, the savings would amount to hundreds or even thousands of dollars each winter.
Massachusetts utilities already plan to lower prices for heat pump users starting this winter, but the proposal under consideration would mandate even deeper discounts in future years. The new rates could accelerate the adoption of heat pumps in Massachusetts and boost progress toward the state’s climate goals, proponents say.
And with President Donald Trump’s megabill eliminating federal tax credits at the end of this year for homeowners who install heat pumps, the approach is a timely demonstration of how states can drive heat pump adoption in the absence of federal support.
“We want to spread awareness of how helpful and commonsense this is,” Amanda Sachs, policy associate with electrification nonprofit Rewiring America, said during a webinar this week on seasonal heat pump rates. “Massachusetts is offering more than a pilot; it’s offering a playbook.”
In Massachusetts and other states with ambitious climate goals, transitioning residents from fossil-fueled heating to heat pumps — which can both warm and cool buildings — is a major strategy for reducing greenhouse gas emissions. However, the cost of buying and operating a heat pump has held back widespread adoption, particularly in areas like New England, where cold winters and high electricity prices collide.
“If we don’t figure out the affordability issues, we diminish the likelihood that we will reach our climate goals in Massachusetts,” said Jolette Westbrook, director and senior attorney for regulatory solutions at the Environmental Defense Fund.
Today, nearly 80% of Massachusetts homes are heated with natural gas, heating oil, or propane, and many of the remaining households use inefficient electric resistance heating. Slightly more than 90,000 homes in the state installed heat pumps using incentives from energy-efficiency program Mass Save between 2021 and September 2024. The actual total, including homes that did not use Mass Save programs, is likely higher. Still, the annual adoption rate will have to double in order for Massachusetts to meet its goal of deploying heat pumps in 500,000 homes between 2020 and 2030.
That, say climate advocates, is where seasonal heat pump rates come in.
Making heat pump operation affordable
Under current default electric rates, roughly three in four Massachusetts homes switching from natural-gas heating to heat pumps would end up with higher energy bills, according to an analysis released this week by climate think tank Switchbox. Indeed, 30% of households making that move would see their total cost for a winter heating season go up more than $1,000, the report finds.
“You hear that heat pumps can’t compete with natural gas, because gas is cheaper. That bit of conventional wisdom is true,” said Switchbox’s executive director, Juan-Pablo Velez.
Massachusetts has already taken steps to start closing that gap with discounted electricity prices for homes using heat pumps. Regulators approved the lower rates proposed by two of the state’s investor-owned electric utilities, Unitil and National Grid, in June 2024 and February 2025, respectively; the third, Eversource, submitted its own proposed rates in April, and they are widely expected to be approved.
The planned discounts range from 4 cents to 7 cents per kilowatt-hour on the delivery portion of the bill — which pays for poles, wires, and other infrastructure — rather than the supply portion that pays for the electricity itself. The lower rate will apply to all of a home’s electricity usage during the winter heating season. Utilities will automatically sign up households that received incentives for heat pump installations through Mass Save, the state’s energy-efficiency program, and homeowners can also reach out to their power provider to enroll in the rate.