NY Heat Pump Incentives in 2026: What Rochester Homeowners Can Claim
Between RG&E / NYSEG Clean Heat rebates, the federal 30% ITC, and the NY State Geothermal Tax Credit, upstate NY homeowners can stack three incentives on a single install.
2026 is the best year to install a heat pump or geothermal system in New York. Federal, state, and utility-administered incentives stack — meaning you can capture all three on a single install. Here’s what Rochester-area homeowners can claim, with the actual published figures.
Federal 30% Investment Tax Credit (ITC)
The Inflation Reduction Act (IRA) provides a 30% federal tax credit for heat pump and geothermal installations through 2032. No dollar cap on residential geothermal.
Important: per IRS guidance, utility rebates (like the RG&E / NYSEG Clean Heat rebate below) reduce the cost basis used to calculate the federal credit. If you receive a $17,000 utility rebate on a $50,000 install, the federal credit is 30% of the $33,000 net cost — not 30% of the $50,000 gross. See the worked example further down.
Consult your tax advisor on eligibility and how to claim the credit (Form 5695) on your federal return.
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 | DAC | ||
|---|---|---|---|---|
| Single family | Apt / SF < 1,000 sq. ft. | Single family | Apt / SF < 1,000 sq. ft. | |
| 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 separate state-level tax credit for ground-source heat pump installations: 25% of installation cost, capped at $5,000. This credit is geothermal only— air-source heat pumps don’t qualify. It stacks on top of the federal ITC and the utility rebate.
Example: $50,000 geothermal retrofit, non-DAC single family
System cost: $50,000
RG&E / NYSEG Clean Heat (Cat 3 GSHP retrofit): –$17,000
Per IRS guidance, utility rebates reduce the cost basis used to calculate the federal tax credit. Net cost after the utility rebate: $33,000.
Federal ITC (30% of $33,000 net cost): –$9,900
NY State Geothermal Tax Credit (25%, capped at $5k): –$5,000
Net out-of-pocket: ~$18,100
Total offset: ~64% 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.
585-368-8685How to Claim
- Federal ITC: claim on your tax return via IRS Form 5695.
- 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.
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
- • Federal ITC (IRS Form 5695): energy.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.