Federal Geothermal and Heat Pump Incentives Are Ending! Nantucket Homeowners Must Act Now to Lock In Thousands in Savings

The Senate’s proposed federal budget bill will eliminate two of the most impactful energy-efficiency programs for homeowners—Section 25D and Section 25C—just 180 days after it becomes law. For Nantucket residents considering a new installation or replacement of a geothermal or heat pump system, this could be the final opportunity to access substantial federal support.

Section 25D: Residential Clean Energy Credit (Geothermal Systems)

• Covers 30% of the total installed cost of geothermal heating and cooling systems

• Applies to both new installs and replacements of existing geothermal systems

• Includes all qualifying expenses: equipment, drilling, trenching, ductwork, electrical, and controls

• No dollar cap

• Currently scheduled to run through 2032 — but would end 180 days after the Senate bill becomes law

On Nantucket, new geothermal systems typically cost $100,000 or more, making the average 25D credit worth $30,000 or more. Even geothermal replacements—often around $30,000—can return $9,000 to $12,000 in federal tax credits.

Section 25C: Energy Efficient Home Improvement Credit (Heat Pumps)

• Covers 30% of qualifying costs for high-efficiency, cold climate air-source heat pumps

• Capped at $2,000 per year, per taxpayer

• Includes ducted and ductless systems, insulation, panel upgrades, and labor

• Recently expanded under the Inflation Reduction Act

• Also set to end 180 days after the Senate bill passes

Though smaller than geothermal credits, Section 25C has helped Nantucket homeowners significantly reduce the cost of upgrading outdated systems in historic or seasonal properties.

Why This Hits Harder on Nantucket

1. Geothermal projects are high-value and long-lead, making them most vulnerable to deadline risk

2. A $100,000 geothermal installation typically returns $30,000 in credits

3. A $30,000 geothermal replacement may return $9,000+

4. Equipment lead times are currently 6–8 weeks, before factoring in permitting and drilling

5. A surge in demand could extend timelines and jeopardize eligibility

6. Heat pump systems are faster to install, but still require coordination and availability

Important: Your system must be fully installed and operational by the deadline. A signed contract or deposit does not qualify.

What Nantucket Homeowners Should Do Now

1. Planning a geothermal system? Start immediately—time and inventory are already tight.

2. Considering heat pumps? Move quickly to lock in both federal and Mass Save rebates.

3. Choose an experienced contractor who understands both the federal programs and Nantucket’s permitting process.

North Winds Mechanical: Trusted for Over a Decade

We are proud to be one of Nantucket’s most experienced geothermal installers and a certified Mass Save Heat Pump Leaders Network contractor. We’ve helped clients secure millions in federal and state incentives through Section 25D, Section 25C, and Mass Save.

From engineering to permitting to final commissioning, we know how to meet the deadlines and get your project qualified—because we’ve done it hundreds of times on Nantucket.

Call 508-825-6297 or visit www.northwindsmechanical.com/contact

Start your geothermal or heat pump project today to lock in thousands before these programs disappear.