Massachusetts proposes substantial electric rate reductions for homeowners with heat pumps
In a move aimed at promoting the adoption of heat pumps and reducing greenhouse gas emissions, the Massachusetts Department of Public Utilities (DPU) is considering a proposal to heavily discount electricity rates for households with heat pumps during winter months.
The proposal, if approved, could cut energy bills for over 80% of residents who switch to heat pumps from fossil-fueled or electric resistance heating, with potential savings amounting to hundreds or thousands of dollars each winter. This timely demonstration of state-led action comes as President Donald Trump's megabill eliminates federal tax credits for homeowners who install heat pumps at the end of this year.
The lower rate will apply to all of a home's electricity usage during the winter heating season. The planned discounts for heat pump users range from 4 cents to 7 cents per kilowatt-hour on the delivery portion of the bill.
Two of the state's investor-owned electric utilities, Unitil and National Grid, have already had their proposed lower electricity rates for homes using heat pumps approved by Massachusetts regulators in June 2024 and February 2025, respectively. Eversource, the third utility, submitted its own proposed rates in April, and they are widely expected to be approved.
Utilities will automatically sign up households that received incentives for heat pump installations through Mass Save, and homeowners can also reach out to their power provider to enroll in the rate.
Addressing affordability issues is crucial to reaching Massachusetts' climate goals, according to Jolette Westbrook, director and senior attorney for regulatory solutions at the Environmental Defense Fund. 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.
The annual adoption rate of heat pumps in Massachusetts will need to double to meet the state's goal of deploying heat pumps in 500,000 homes between 2020 and 2030. Approximately 90,000 homes in Massachusetts installed heat pumps using incentives from energy-efficiency program Mass Save between 2021 and September 2024.
Transitioning residents from fossil-fueled heating to heat pumps is a major strategy for reducing greenhouse gas emissions in states with ambitious climate goals. Amanda Sachs, policy associate with electrification nonprofit Rewiring America, stated that Massachusetts is offering a playbook for other states to follow in offering discounted rates for heat pump users.
However, an analysis released this week by climate think tank Switchbox found that 30% of households making that move would see their total cost for a winter heating season go up more than $1,000. This underscores the importance of carefully considering the individual circumstances of each household when implementing such policies.
In conclusion, the proposed discounts on electricity rates for households with heat pumps could accelerate the adoption of heat pumps in Massachusetts and boost progress toward the state's climate goals. The move serves as an example for other states to follow in driving heat pump adoption in the absence of federal support.
