Get up to 100% cash back for heat pump water heaters, a low-cost & ultra-efficient way to meet your home’s hot water needs


Eligible households can get up to $5,000 back on equipment and installation costs with an offer that uses heat pump technology to provide hot water to kitchens, bathrooms, and laundry rooms 

WINOOSKI, VT—Vermont households can save thousands of dollars on new heat pump water heaters, an ultra-efficient all-electric system that uses heat pump technology to meet a home’s hot water needs for cooking, bathing, laundry, and more. The new Efficiency Vermont offer covers up to 100% of costs for income-eligible households to buy and install new heat pump water heaters. 

Low-income households can receive 100% of the equipment and installation costs of a new heat pump water heater, up to $5,000. Moderate-income households can get 90% cash back, up to $4,500.  

"Water heating is usually a home’s second-highest energy cost. These water heaters use just a fraction of the energy of traditional models, which means installing a heat pump water heater saves money—and with Vermont’s low-carbon electricity, they’re also climate-friendly,” said Peter Walke, managing director of Efficiency Vermont. “This offer makes the incredible efficiency of heat pump water heaters available to more Vermonters—a critical part of ensuring everyone can share the benefits of clean technology and a healthier planet.” 

Heat pump water heaters provide hot water for a home’s kitchen, bathroom, and for clothes washing. The benefits of heat pump water heaters include: 

  • The same hot water, less energy: Electric heat pump water heaters are up to three times more efficient than standard electric resistance units. That means you’ll get the same amount of hot water for just a fraction of the energy—and a fraction of the cost. 
  • An efficient and affordable solution: When it comes to replacing a water heater, electric heat pump water heaters typically offer the best balance of up-front cost, ease of installation, and savings over time. 
  • Proven heat pump technology: Heat pumps use electricity and a refrigerant to move heat from one place to another, rather than burning fuel to generate heat. This means heat pump water heaters can use small amounts of energy to create big results—in this case, enough hot water for your entire home.  
  • Added benefits of heat pumps: Heat pump water heaters bring the added benefit of dehumidifying nearby spaces. They also cool their surroundings, making them ideal for basement installations.  
  • An option no matter how you heat your home: It’s possible to switch to a heat pump water heater whether your home currently heats with fossil fuels, wood, or electricity, and regardless of how your home currently generates hot water. 

The heat pump water heater offer is possible through $5 million from the American Rescue Plan Act (ARPA). The offer was launched early in September 2023 to support Efficiency Vermont’s flood recovery rebates for low- and moderate-income households. Now partnerships with Burlington Electric Department (BED) and Vermont Gas Systems (VGS) will make this offer available to low- and moderate-income households statewide.  

“Since our teams started installing heat pump water heaters in 2022, we’ve seen demand grow,” said VGS President and CEO Neale Lunderville. “These appliances are super-efficient, help dehumidify spaces, and result in reduced carbon emissions. With the rollout of enhanced water heating incentives, there’s never been a better time to make the switch to a heat pump water heater.” VGS notes that customers who opt for a heat pump water heater will save money if they’re currently using a standard tank-style water heater. 

“BED is excited to support this program and help income-qualified customers in Burlington switch from less efficient water heaters to new heat pump water heaters that can save money and reduce greenhouse gas emissions,” stated Darren Springer, General Manager of Burlington Electric Department. “We appreciate partnering with the other Vermont efficiency utilities on implementation of this program.” 

Heat pump water heaters are suitable for most homes, but have unique requirements to consider. They are larger than conventional water heaters and, due to the way heat pump technology works, they require adequate space for airflow and clearance around the unit. Because of their noise and their cooling effect on the surrounding air, they’re best suited to basements or similar spaces not within a home’s living spaces. An Efficiency Excellence Network (EEN) contractor can help identify whether heat pump water heaters are suitable for a given home.  

Households whose income makes them ineligible for this offer can still access a $600 rebate on heat pump water heaters, with additional savings from partner utilities including Washington Electric Co-op, municipalities served by VPPSA, and Burlington Electric. Efficiency Vermont’s Home Energy Loan also offers low-interest financing for working with an EEN contractor on eligible home energy projects, including heat pump water heater installations. In addition to the $600 rebate, rental property owners can get $400 back on heat pump water heaters installed for rental units, either in the unit itself or in common areas like basements. For VPPSA member utilities, rental properties are eligible for an $800 “Do More” bonus for four or more eligible products per rental unit or property. 

In addition to Efficiency Vermont’s offers, heat pump water heaters are eligible for federal Energy Efficiency Home Improvement tax credits. Homeowners can claim a 30 percent federal tax credit (up to $2,000 per year) on the cost of a heat pump water heater, plus installation. 

Rebates from Efficiency Vermont and utilities have helped Vermonters install more than 18,000 heat pump water heaters over the last decade. Vermont was among the first states to support retail and distributor programs for heat pump water heaters.  

About Efficiency Vermont

As the nation’s first Energy Efficiency Utility, Efficiency Vermont has helped Vermont avoid over 13.2 million metric tons of greenhouse gas emissions and has received the U.S. Environmental Protection Agency’s ENERGY STAR program Partner of the Year – Sustained Excellence award for the last eight consecutive years. Efficiency Vermont works with partners to help our state transition to more affordable, low carbon energy use through education, incentives, and support for our clean energy workforce. Learn more at

Efficiency Vermont Press Contact
Matthew Smith
Phone: (802) 540-7662
[email protected]