Maryland Heat Pump Rebates
Stackable incentives available to Maryland homeowners installing a qualifying heat pump in 2026.
Rebate data is re-verified against primary sources every two months.
What's available in Maryland
Maryland has one of the most generous heat pump incentive landscapes in the country in 2026, anchored by the EmPOWER Maryland statewide ratepayer-funded efficiency program. The Home Performance with ENERGY STAR pathway at BGE, Pepco, and Delmarva Power covers up to 75% of project cost (max $15,000) when a project replaces fossil-fuel heating or water heating with a heat pump, gated by a $100 home energy assessment; Potomac Edison instead offers Switch-to-Electric rebates of up to $4,000 per cold-climate heat pump plus up to $3,000 in electrical Make-Ready incentives through December 31, 2026. BGE, Pepco, Delmarva, and SMECO offer $1,600 heat pump water heater rebates, and Montgomery County's Electrify MC pilot adds $1,000 to $2,500 per heat pump for Pepco and BGE customers in the county. The Maryland Energy Administration's $3,000 geothermal rebate is closed to new applications and FY26 was its final year. Maryland's IRA-funded HEAR/HOMES income-qualified rebates had not been confirmed as open as of September 2026; when available, households under 80% AMI would be eligible for up to $8,000 per heat pump.
HEEHRA in Maryland
HEEHRA rebate: Point-of-sale rebate up to $8,000 for households at or below 80% of area median income. Funded by the IRA, administered by each state. Maryland is finalizing program rules.
How heat pump rebates work in Maryland
Maryland has one of the most generous heat pump incentive landscapes in the country in 2026, anchored by the EmPOWER Maryland statewide ratepayer-funded efficiency program. The flagship Home Performance with ENERGY STAR pathway — delivered by BGE, Pepco, and Delmarva Power (Potomac Edison and SMECO cap Home Performance at $10,000 and offer separate electrification incentives) — covers up to 75% of project cost (max $15,000) for replacing fossil-fuel heating with a heat pump, gated by a $100 BPI home energy audit. BGE, Pepco, and Delmarva also offer up to $1,600 stand-alone heat pump water heater rebates, and the Maryland Energy Administration separately ran a $3,000 geothermal rebate that is now closed to new applications as FY26 funding was exhausted. Montgomery County's Electrify MC pilot adds up to $2,500 for county residents (limited to Elysian Energy as the contractor). Potomac Edison customers converting from oil, propane, or gas can claim an enhanced Switch-to-Electric rebate of up to $4,000 on a cold-climate heat pump (up to $3,500 for a standard air-source unit), plus up to $3,000 toward Make-Ready electrical upgrades, through December 31, 2026. The state has not yet fully launched its IRA-funded HEEHRA/HOMES income-qualified rebate program as of early 2026.
Maryland rebate programs
EmPOWER Maryland Home Performance with ENERGY STAR — Whole-Home Electrification Rebate
$15,000Up to $15,000 or 75% of project cost (whichever is less) when a Home Performance project includes switching a combustion-fuel furnace, boiler, or water heater to a qualifying electric heat pump; projects without fuel switching are capped at $10,000. Confirmed at this level for BGE, Pepco, and Delmarva Power; Potomac Edison and SMECO list Home Performance rebates up to $10,000 and handle electrification through separate incentives (Potomac Edison Switch-to-Electric). Requires a $100 home energy assessment ($400 value) through a participating contractor, one per address every 5 years; Pepco and Delmarva require the contractor to reserve rebates by December 31, 2026 and complete work within 90 days of reservation approval.
EmPOWER Maryland Heat Pump Water Heater Rebate
$1,600Up to $1,600 toward an ENERGY STAR certified heat pump water heater, offered at the same $1,600 level by BGE, Pepco, Delmarva Power, and SMECO (Potomac Edison offers up to $2,500 when replacing a fossil-fuel water heater under Switch-to-Electric). Available as an instant discount at participating distributors, Lowe's, and Home Depot, or as a mail-in/online rebate; the mail-in rebate is not valid if an instant rebate was already taken on the same unit, and only one rebate is allowed per customer address for units purchased after January 2, 2024. BGE customers switching from gas, oil, or propane can also get 75% of home preparation costs (up to $1,500) covered.
Maryland Energy Administration Geothermal Heat Pump Rebate
$3,000Flat $3,000 rebate for a new residential ground-source (geothermal) heat pump system. FY26 (budget $150,000) is the final year of this program and MEA has not announced an FY27 round. The application portal is closed to new applications while MEA processes submissions received by the February 27, 2026 deadline; MEA reported 88% of the FY26 budget reserved as of May 11, 2026. No new applications are being accepted. The federal §25D 30% credit for geothermal was repealed effective December 31, 2025 and does not apply to 2026 installs.
Montgomery County Electrify MC Heat Pump Incentive
$2,500$1,000 to $2,500 incentive for a ducted, mini-split, or cold-climate heat pump installed under Montgomery County's Electrify MC pilot, plus $500 for a heat pump water heater, $165 for gas line capping, and $500 for oil tank removal. Limited to individually metered Montgomery County homes served by Pepco or BGE (Potomac Edison listed as coming soon); since July 16, 2024 the new equipment must replace a fossil-fueled equivalent and meet CEE Tier 1 or ENERGY STAR. All work is performed by Elysian Energy, the County-selected contractor, which issues the incentive directly; stacks with EmPOWER.
Potomac Edison Switch-to-Electric Heat Pump Incentive (FirstEnergy)
$4,000Enhanced HVAC incentives for Potomac Edison customers replacing oil, propane, or natural gas heating or water heating with electric equipment: up to $4,000 on a cold-climate heat pump, up to $3,500 on a standard air-source heat pump, $3,000 on a ductless mini-split, and up to $2,500 on a heat pump water heater, plus up to $3,000 in Make-Ready electrical upgrade incentives. Partial (hybrid) fuel switching earns lower amounts. Available on qualifying equipment purchased through December 31, 2026 while funding lasts; work must go through a participating contractor. Potomac Edison's portal lists these as enhanced amounts and does not state that they stack on top of the standard $1,700 cold-climate rebate.
5 utility-specific programs not shown here. Enter your ZIP in the calculator to filter to just your utility.
A worked example: oil-to-heat-pump conversion in Baltimore
Imani owns a 1,750 sq ft home in Baltimore served by BGE, currently heated by a 20-year-old oil-fired boiler. She gets quotes for a 3-ton ducted air-source heat pump installed with new ductwork (the existing home is hydronic, so duct installation is part of the scope), full displacement of the oil system, and a NEEP cold-climate certified outdoor unit. Installed cost including ductwork: $26,500. Because the install replaces fossil-fuel heating with a heat pump, she qualifies for EmPOWER Maryland's Whole-Home Electrification Rebate at 75% of project cost, capped at $15,000. Her rebate lands at the $15,000 cap. Layered on top, BGE's heat pump water heater rebate at $1,600 doesn't apply to this scope (no HPWH installed). Her household income is approximately 95% of Baltimore's AMI — Maryland HEEHRA hasn't launched, so the federal income-qualified rebate isn't available. The federal §25C credit is gone. Combined stack: $15,000 against $26,500. Net out-of-pocket: $11,500. The $100 BPI home energy audit prerequisite is included in the project quote.
Choosing a contractor in Maryland
Maryland licenses HVAC contractors through the Maryland Department of Labor (Master HVAC license). Verify at dllr.state.md.us before signing. EmPOWER Maryland Whole-Home Electrification rebates require a contractor enrolled with the specific utility's EmPOWER program — BGE Smart Energy Saver, Pepco Energy Wise, Delmarva Energy Wise Rewards, etc. The $100 BPI home energy audit is a prerequisite; the contractor scheduling the audit must be BPI-certified. Confirm both the EmPOWER enrollment and BPI certification at the quote stage. Montgomery County Electrify MC participants must use Elysian Energy as the contractor — no other contractor can file the Electrify MC incentive.
Common pitfalls for Maryland homeowners
- Counting on the Maryland geothermal rebate after April 30, 2026. The Maryland Energy Administration's $3,000 geothermal heat pump rebate is closed to new applications — the FY26 application deadline was February 27, 2026, FY26 is the program's final year, and MEA reported 88% of the $150,000 budget reserved as of May 11, 2026. Existing FY26 applicants are still being processed. The federal §25D 30% credit for geothermal was repealed effective December 31, 2025, so with the MEA rebate closed, 2026 geothermal economics rest on utility rebates and operating-cost savings.
- Skipping the $100 BPI home energy audit. EmPOWER Whole-Home Electrification rebates require a $100 BPI home energy audit as a prerequisite. A homeowner who installs equipment first and applies for the rebate afterward will be denied. The audit is heavily discounted from market rate ($300-$500 typical for BPI assessments) because EmPOWER subsidizes it — schedule it through your utility's EmPOWER program before equipment is ordered.
Estimate your net cost
Used to determine HEEHRA eligibility (under 80% area median income).
- EmPOWER Maryland Home Performance with ENERGY STAR — Whole-Home Electrification Rebate−$15,000
- Potomac Edison Switch-to-Electric Heat Pump Incentive (FirstEnergy)−$4,000
- Montgomery County Electrify MC Heat Pump Incentive−$2,500
- EmPOWER Maryland Heat Pump Water Heater Rebate−$1,600
Estimate only. Includes only programs accepting applications today — waitlisted or closed programs are excluded. Mutually exclusive programs (e.g. HEEHRA vs HOMES) and project-cost caps are applied per current program rules; confirm with your installer and utility before signing.
How to claim each rebate
- Get pre-approved (where required). Some utility programs require approval before install. Check program details before signing a contract.
- Use a participating contractor. Many programs require a licensed installer from an approved contractor list — especially HEEHRA, which routes through CEC-approved contractors who process the rebate at point of sale.
- Save documentation. AHRI certificate, model numbers, and itemized invoice are required for most utility rebates.
- Submit utility rebate within 60–90 days of install. Some programs are first-come first-served and close mid-year — funding can run out before the calendar year does.
If you can't afford a replacement in Maryland
Rebates lower the price, but they still assume you can pay the rest. If your heating system is unsafe or has failed and a new one is out of reach, these programs repair or replace equipment at low or no cost for income-qualified households. Heat Pump Pricing Index is an independent information site — we don't fund, discount, or install equipment — so these are the doors to knock on first:
- Weatherization Assistance Program (WAP). Free energy and health-and-safety repairs — an unsafe furnace is exactly the kind of problem it fixes — for households at or near 200% of the poverty line. Apply through your local community action agency: how to apply (energy.gov).
- LIHEAP. Heating-bill help plus, in most states, a crisis component for broken or dangerous heating equipment. Same local agency; Maryland LIHEAP contacts.
- USDA Section 504 Home Repair. For homeowners outside cities: 1% loans up to $40,000, and grants up to $10,000 for homeowners 62 and older to remove health and safety hazards. Program page and state offices (rd.usda.gov).
- Your utility and 211. Most electric and gas utilities run an income-qualified assistance fund — call the number on your bill and ask. Dialing 211 reaches a local specialist who knows which agencies in Maryland currently have funds.
Safety first: if a technician has told you a heat exchanger is cracked, stop using the furnace and make sure you have a working carbon monoxide detector before anything else.