Heat Pump Rebates Updates for Q2 (Podcast)

In this podcast, Mike Cappuccio from N.E.T.R., Inc talks with John Maher about rebates for ductless heating and cooling systems. He explains rebates for Q2 2022 and talks about the trends for claiming rebates this year. He also covers different types of rebates, deadlines, and the application process.

John Maher: Hi, I’m John Maher. I’m here today with Mike Cappuccio, founder of N.E.T.R., Inc, a heating and cooling company in Massachusetts with a focus on Mitsubishi ductless heating and cooling products. Today, we’re doing a heat pump rebates update for the second quarter of 2022. Welcome, Mike.

Mike Cappuccio: Good morning, John. How are you?

Recent Updates to Rebates for Mitsubishi Ductless Systems

John: Good, thanks. So Mike, has anything changed or been updated about the rebates that are available for Mitsubishi ductless systems recently?

Mike: Yes. There has been, John. There’s been a lot of clarity made on these whole home rebates and air source heat pumps for 2022. So I’d really like to go down through them with you because there has been a lot more clarity, like I said.

When this first got put out in January of 2022, there was so much confusion going on as far as what was available, how can I do it, how do I get paid, how do all these things happen.

John: Yeah. So they release these rebates and then they probably get a lot of questions from contractors and homeowners, and then they realize, “Oh, okay, we really need to clarify this and explain what we’re doing.”

Mike: Exactly. Was natural gas included, is oil included and so forth.

John: Right.

Mike: How does all this work? So there’s been a lot of changes.

John: So why don’t you go ahead and kind of walk us through what the changes have been.

Rebates for Air Source Heat Pumps

Mike: Okay. So basically first, what are the rebates, and how do they work with an air source heat pump? So air source heat pumps, there’s two types of rebates, okay? The first one, is a partial home rebate of $1,250 per ton. And that’s up to a maximum of $10,000. So how do you consider a ton of air conditioning?

It’s 12,000 BTUs. So for every 12,000 BTUs you put in, in a partial home, you get $1,250. Now that needs to be integrated into the existing system. Okay? So I’ll get into the integration in a little bit of what that actually is. And then there’s what we call the whole home rebate.

That’s $10,000 per home, automatically, not based on BTUs. That’s basically I’m removing my existing heating system and putting in an air source heat pump to heat my home. Okay. And your existing heating system can still stay in the home, but it has to be used only in emergency situations.

John: And how do you define that? How do you prevent a homeowner from using it, unless it’s an emergency situation?

Mike: You really can’t prevent that, John. There is a form that the homeowner does need to sign off on that says that they will not use it.

John: Okay.

Mike: Only in emergency situations. Exactly like if it’s not working, it’s down, it’s broken. But I don’t really fully understand how they’re going to police that. I’m not sure.

John: Right. If they’re going to maybe look at your energy bills and if all of a sudden you’re starting to use a lot of home heating oil or something like that, they’ll say, “Hey, wait a minute. This seems like you’re using the home heating oil a lot.”

Mike: Exactly. Well, you’re going to see a big spike in your electric bill when you start using the air source heat pump and then all of a sudden that’s going to go away in the cold months. They’re going to kind of see something’s going on there.

John: Right. Right. Right.

Residential Eligibility Requirements for Heat Pump Rebates

Mike: So, I mean, the other one is the, one of the residential heat pump eligibility requirements. They’ve kind of refined those a little bit, who can participate, what type of buildings, what’s the timeframe, things like that. So I mean, basically you have to pay into a program with National Grid or the utilities, your local utilities that you are working with.

So Cape Cod Light, Berkshire Gas, places like that, you can get involved in these rebates. If you are using natural gas in a municipal area that has municipal electric but the gas is supplied by National Grid, you can qualify for these programs for whole home heat and heat pump partial home if you integrate that or replace your natural gas system with the heat pump. It does not work with oil. You can’t use it with oil in the municipal areas. But if you had oil heat in an area that was not municipal and you’re paying into the program, you can be eligible.

So the types of buildings are residential homes. They’re one to four units. They may qualify for either partial or whole home, depending. If the equipment is installed in individual dwellings in residential areas with five plus units with complexes, you do need to go into the building program. So you’re going to have to kind of get out of that.

When to Apply for Ductless Rebates

Mike: The timeframe for the rebate programs is January 1st, which we all know when it started. And it runs through the end of this year. Okay. All your rebate forms need to be filled out, have to be put in 60 days after the installation for the rebates to come through.

John: No later than 60 days?

Mike: No later than 60 days.

John: Okay.

Mike: I mean, sometimes, there is a little bit of a grace period. And the installer that installs it needs to be a licensed contractor and they need to be listed with the Mass Save program.

John: Okay. And are those basically all the updates and clarifications?

Mike: Yes.

John: Okay.

How to Learn More About Ductless Rebates

Mike: And you can go to Mass Save’s website, it shows a lot of this on there. There’s certain efficiencies. The equipment is listed on the Mass Save qualified heat pump products list. Okay. And these change weekly. Okay. So there’s new products being added all the time. So you might see a product that might not be on there this week, that’s on there next week. Okay.

Integrated controls as well. The controls that you’re using to integrate it, to get the partial home rebates, there’s new controls being added daily too. So this isn’t something that, it just, this is the list that’s put out at the beginning of the year, and then it never changes. It will change weekly. So you’re going to see those changes.

Rebates for Partial Home and Integrated Ductless Systems

John: So you mentioned the partial home rebate and the integration with an existing heating system. Talk a little bit more about that.

Mike: Okay. So an integrated control is what you would use for the partial home rebate. And you have to integrate that with the existing system that’s in the house, the existing heating system. So what’s going to happen there is, I’ll give you an example. Let’s say you have an addition on the back of your house, John, and it’s being heated by natural gas, baseboard, hot water, something like that.

And you want to put a heat pump in that area to integrate that with that existing heating system. You would put, what’s called an integrated control on the heat pump and you’d integrate it with the existing thermostat that is in that space, that it has to be a wifi thermostat.

And you would integrate the two. So say above 30 degrees, the air source heat pump would come on and heat the space. And below 30 degrees, the natural gas would then heat the space. So they’re really trying to eliminate the carbon more so going into the air for using the natural gas heating system and or the oil heating system.

John: And in terms of the whole home rebate, you said that that takes place if you’re replacing your existing heating system with the heat pump system. But can you also use those integrated controls and keep your old heating system and still qualify for the whole home rebate?

Mike: No, you cannot use integrated controls on whole home.

John: Okay.

Rebates for Whole Home Ductless Systems

Mike: Whole home is whole home. You cannot use the integrated controls. And with whole home heat pumps, the heat pumps must be sized to be capable of handling the entire load of the home. So the homes, you do a load calculation on the home. And the home is say, it needs 60,000 BTUs to heat the home.

You have to provide 60,000 BTUs of heating at five degrees or whatever the heat load that you’ve run on the town or city. Say that design temperatures are four degrees, you have to provide that amount of BTUs at that temperature. You do have to do weatherization too. Weatherization recommendations are done during a home energy assessment.

You do need to have a home energy assessment for the whole home rebate. And the weatherization needs to be completed prior to the heat pump being installed. And you need to have the certificate for your rebate showing that the house has been weatherized. Because you don’t want to put the heat pump in your home and it’s not tightly sealed or insulated properly.

So they want to, and Mass Save wants to review the home to make sure that the home is insulated properly and that all of the heat is not going to leak to the outside of the home. And the preexisting heating system must either be removed or disconnected, or the customers must attest that they’re only using it for emergency backup heat only.

John: Okay.

Rebates Are for Full-Time Occupants, Not Vacation Homes

Mike: And the other one more quick little caveat there is the homes, they have to be occupied full-time during the winter season. So this can’t be a summer home that you don’t go to in the winter time and-.

John: Right.

Mike: You’re just buying it for air conditioning and you’re never going to use it to heat the home with it.

Timeline for Applying for Ductless Rebates

John: Right. Right. Right. So are there any deadlines coming up or clarifications that you can give in terms of that? You said that obviously, the weatherization might have to be done before the installation. So that, you’re going to need to get that done. That could take some time.

And then you have to apply for the rebates no later than 60 days after the installation. And then do you have to apply for the rebate before the end of the year? Or say, if you got a heat pump system installed in December, do you then have 60 days to apply for the rebates or do you have to get that done by the end of the year?

Mike: You will have a little bit of a grace period there, but you have 60 days to get that done. I mean, we’ve seen a drastic uptick during the first three months of this program with Mass Save. I received an email the other day, they’ve provided over seven million dollars worth of rebates in over 2500 heat pump installations that have replaced fossil fuels.

John: Wow.

Benefits of Applying for Rebates Early

Mike: And this is a very aggressive start for the beginning of the year. So what I usually see, John with these programs is this is a three year program. And the first year of the program is when the full amounts come out.

In other words, the $10,000 for the whole home, the $1250 per ton for the integrated controls for partial home installations. And with that amount of funds being put out on year one, I mean, in three months, year two, you’re probably going to see those rebates decrease. It’s usually what you see. Year one it’s high, year two, I’m not saying they’re being decreased, I’m saying what I’ve seen in the past, so.

John: Right.

Mike:    If you’re seriously considering doing this, you want to get it on the beginning forefront versus year three, so.

How to Claim Ductless Rebates

John: Right. Right. Absolutely. And how does a homeowner go about claiming these rebates? Do they have to fill out a lot of paperwork and do it themselves?

Mike: Well, here at N.E.T.R, we’re doing it all for you. We are going to do the paperwork for you. We’re working with Nico, who is our energy auditor, who we’re getting paperwork from showing that the home insulation has been done for the whole home. And we are filling out the paperwork for the homeowner and sending it in.

I would highly recommend looking at the contractor who’s going to do it, what’s the support network. I mean, we’ve hired one full-time person. That’s all she does all day long is these rebates, because it can be confusing. There’s some things you need and you’ve got to know where to send these and how to do everything… It’s a lot of questions.

Contact N.E.T.R. to Learn More About Ductless Rebates

John: All right. Well, that’s really great information. Mike, thanks again for speaking with me today.

Mike: Thanks, John.John: And for more information, visit the N.E.T.R website at netrinc.com or call 781933NETR, that’s 7819336387.