New England Coalition Wins Second Largest Award, Will Launch First-in-the-Nation Program to Drive Down Consumer Costs with Incentives and Guidance for Heat Pump Distributers, Installers

BOSTON - The Healey-Driscoll Administration today celebrated its coalition’s selection by the U.S. Environmental Protection Agency to receive $450 million in funding under the competitive portion of the Climate Pollution Reduction Grants, a $4.6 billion program of the Inflation Reduction Act. Massachusetts was selected as part of a five-state coalition led by Connecticut that proposed a regional heat pump market transformation program called the New England Heat Pump Accelerator (Accelerator). 

The Accelerator’s goal is for heat pumps to make up at least 65 percent of residential heating, cooling and water heating sales by 2030 and to achieve long-term greenhouse gas emissions reductions for the region. The coalition includes the Connecticut Department of Energy and Environmental Protection, the Massachusetts Department of Energy Resources, the Maine Governor’s Office of Policy Innovation and the Future, the New Hampshire Department of Environmental Services, and the Rhode Island Office of Energy Resources. Massachusetts expects to receive approximately $100 million from the award directly. 

“Through the Accelerator, we'll be able to deliver affordable and cutting-edge heating and cooling technologies to families and businesses across New England,” said Governor Maura Healey. “Our administration is proud of the bipartisan collaboration with our partner states that is delivering $450 million at this critical juncture in our response to climate change. We believe that climate change is our greatest threat and greatest opportunity – with the Climate Pollution Reduction Grant, this is an opportunity to lower costs, increase comfort, and drive down emissions.”

“By working together, we get more done. This award is a tremendous win for Team Massachusetts,” said Lieutenant Governor Kim Driscoll. “Heat pumps are a key technology for reducing emissions, and this award will help us expedite their availability statewide while lowering costs for consumers. Thank you to our federal partners in the Biden-Harris administration for your continued support of a green energy future for Massachusetts."

The award, the second-largest sum nationwide, will allow the five-state coalition to rapidly scale adoption of heat pump technologies by filling gaps in funding and program coverage. The Accelerator will create the first program of its kind to work with manufacturers, distributors, and contractors to increase the availability of heat pumps, ensure quality installation, and reduce costs for residents, with the goal of making heat pumps account for at least 65 percent of residential-scale heating, air conditioning, and water heating sales by 2030 and 90 percent by 2040. The Accelerator is designed to achieve greenhouse gas emissions reductions long after its funding ends by overcoming barriers to residential building electrification and establishing heat pumps as standard practice for HVAC and water heating.

"Getting heat pumps in homes across New England unlocks enormous benefits for our residents,” said Energy and Environmental Affairs Secretary Rebecca Tepper. “For folks who have struggled to afford furnaces and air conditioning in the past, they’ll be able to more easily get a heat pump that heats and cools their homes efficiently as summers get hotter and winters become more extreme. I’m also proud to see our efforts to build relationships with our neighbor states result in such a significant award – the second largest in the country.”

“We are in a climate crisis, and this award demonstrates our commitment to accelerating emissions reductions, giving our residents affordable access to clean heat and healthy homes that are resilient to extreme temperatures,” said Deputy Climate Chief Jonathan Schrag. "Along with the Massachusetts Community Climate Bank, Solar for All, and harnessing energy efficiency and electrification rebates, the New England Heat Pump Accelerator is part of our strategy to equitably decarbonize housing and transition away from fossil fuel infrastructure.” 

This innovative approach in New England will be the first regional program of its kind in the nation and will provide funding for states and communities to reach households with the highest energy burdens by removing barriers typically faced by underserved communities. The Accelerator is designed to address these barriers by providing incentive adders in disadvantaged communities and by funding state-based projects and community-based Quick Start Grant projects that support heat pump adoption for low- and moderate-income households and disadvantaged communities. In alignment with EPA’s Justice40 goals, at least 40 percent of Accelerator funding will be directed to low- and moderate-income households and underserved communities. The Accelerator underscores the Healey-Driscoll Administration’s commitment to a cleaner, decarbonized buildings sector, which accounts for more than a third of the state’s greenhouse gas emissions. The collaboration with neighboring states will enable greater impact in achieving emissions reductions at scale.  

“We’re grateful for this funding, which will boost Massachusetts’ progress to lower emissions from our buildings, improve indoor air quality in homes and businesses, and reduce outdoor air pollution in our communities,” said Commissioner of Energy Resources Elizabeth Mahony. “Massachusetts continues to see record numbers of heat pump installations, but this funding and the regional collaboration it supports will help transform the market in new ways. By addressing the largest barriers to adoption, cost and workforce, the states will increase the delivery of heat pumps, especially in the communities that have been unfairly burdened by climate change. We thank the Biden-Harris Administration and our Congressional delegation and look forward to working with our New England coalition partners.”

“This unprecedented award is a key success of our whole-of government strategy to secure federal funding to meet our state's climate goals,” said Director of Federal Funds and Infrastructure Quentin Palfrey. “With recent federal funding awards to Massachusetts for expansion of solar energy, electric vehicle school buses, cleanup of brownfields, converting to zero and low-emission public buses and more, we are continuing to secure funds that advance our climate solutions equitably and support our workforce in the process. We are grateful to the Biden-Harris administration, Administrator Regan, and all of our federal partners for investing in Massachusetts.”

The Accelerator uniquely combines three program pillars to activate the supply chain: a Market Hub, Innovation Hub, and Resource Hub. Together these three pillars work to spur heat pump adoption, scale solutions to address specific barriers facing low- and moderate-income households and underserved communities when adopting heat pumps, and share data and educational resources to drive rapid, aligned progress across the New England region. 

Market Hub

The Market Hub will supercharge participation in the coalition states’ existing heat pump programs by engaging manufacturers, distributors, and contractors to drive the sales, stocking, and quality installation of heat pumps suited to New England’s climate and housing stock. While utility and state programs currently offer incentives for heat pump technologies across the five states, these mainly take the form of “downstream” rebates to end-use customers. In contrast, “midstream” incentives typically include a smaller stipend to the wholesale distributor and a larger “pass-through” incentive to the contractor and/or customer, applied as an instant discount at point of sale. The five largest distributors sell more than 50 percent of the heat pumps sold in the region. The Market Hub will also train New England contractors on cold-climate heat pumps and the value of whole-home electrification with efficiency. 

Innovation Hub

The Innovation Hub is designed to support heat pump adoption for low- and moderate-income households and disadvantaged communities. Each state will execute up to two large-scale, multi-year projects, such as heat pump strategies for multifamily buildings and mobile homes, networked geothermal systems, and heat pump technologies to address specific housing barriers.

Resource Hub

Since the states already have well-established consumer brands such as Mass Save®, the Resource Hub will not seek to establish a new brand or portal for consumers. Instead, it will serve as a central portal for distributors, contractors, program implementers, and other stakeholders in the heat pump supply chain to access relevant data and educational resources.

Statements of Support:

Senator Edward J. Markey, Chair of the Senate Subcommittee on Clean Air, Climate, and Nuclear Safety:

“We worked hard to build historic programs like the $4.6 billion Climate Pollution Reduction Grant program into the Inflation Reduction Act-another cornerstone achievement of the Biden-Harris administration-and it is so exciting to see those investments flow directly to Massachusetts with this landmark $450 million award for the New England Heat Pump Accelerator. This accelerator will speed along the adoption of budget-saving, energy-efficient heating and cooling systems, pumping relief into homes all around the Commonwealth.”

Democratic Whip Katherine Clark:

“Through community-driven grants, we are helping families lower their energy bills and stay cool in the summer - all while protecting our planet. This is just the latest example of how Democrats are fighting for the health, safety, and prosperity of everyday Americans. I’m grateful for the partnership of the Biden-Harris Administration for helping to deliver this win to MA-5. Every day, we are working together to prove what's possible when we invest in the American people.”

Congresswoman Ayanna Pressley:

“This is a win for households across Massachusetts and a testament to government collaboration. The Healey-Driscoll Administration continues to advance smart partnerships and steward federal resources to improve the lives of residents of the Commonwealth in meaningful and tangible ways. This is good news for consumers burdened by energy costs and good news for the environment.”

Congresswoman Lori Trahan:

“Heat pumps are a critical tool in the fight to make it more affordable for Massachusetts families to keep their houses warm during the winter and cool during the summer. This significant federal investment, made possible by President Biden and Vice President Harris’s Inflation Reduction Act, will lower utility bills here in the Commonwealth and across New England while reducing our dependence on expensive and volatile fossil fuels.”

Connecticut Department of Energy and Environmental Protection Commissioner Katie Dykes:

“We are thrilled that the EPA’s national competition recognized the region’s collaborative effort and vision to expand the benefits of proven heat pump technology across New England. Cold-climate heat pumps are several times more energy efficient than even the most efficient fossil fuel heating systems while also providing the health benefits of space cooling in warmer months. As our state experiences more frequent heat waves due to climate change, DEEP looks forward to accelerating the deployment of this versatile, clean heating and cooling technology while reducing costs and providing health benefits for our residents.” 

Rhode Island Acting Energy Commissioner Chris Kearns:

“This award will further ensure that all Rhode Islanders, regardless of their housing situation, can benefit from the energy savings and health improvements offered by air-source and ground-source pumps. This coalition has allowed the New England states to work together on energy initiatives and I am excited to continue this partnership to advance our states' clean energy goals." 

Hannah Pingree, Director of the Maine Governor’s Office of Policy Innovation and the Future, and Dan Burgess, Director of the Maine Governor’s Energy Office:

“Maine has set an example for the nation on how efficient, climate-friendly technologies like heat pumps can reduce greenhouse gas emissions, create jobs and support new businesses, and save people money on their heating and cooling bills. This award from through the Inflation Reduction Act will ensure Maine can meet our ambitious target of 275,000 heat pumps installed by 2027, and we thank the U.S. EPA and our partner states for their support of this important initiative.”