New Report: Massachusetts households poised for more than $600 in median savings with heat pump upgrades under proposed rates

BOSTON – A new report shows that 82% of MA households can save an average of $687 each winter by upgrading to high-efficiency heat pumps if the Massachusetts Department of Public Utilities (DPU) adopts proposed rate changes from the Massachusetts Department of Energy Resources (DOER). The findings show that the proposed rates would help correct an existing imbalance in which current heat pump users are unfairly subsidizing other electric ratepayers.

“Heat pumps aren't just a win for the climate; they're increasingly a smart financial move for homeowners,” said Jolette Westbrook, Director and Senior Attorney, Equitable Regulatory Solutions at Environmental Defense Fund. “This report demonstrates how supportive rate structures can accelerate the widespread adoption of this clean and cost-effective technology.” 

The report, Heat Pump Rates in Massachusetts, was developed by Switchbox and sponsored by Environmental Defense Fund, Acadia Center, Rewiring America, Green Energy Consumers Alliance, and ZeroCarbonMA. The analysis highlights how Under DOER's proposed rates, most electric customers of National Grid, Eversource, and Unitil would save money by switching to heat pumps, including single-family homeowners and customers who heat with methane gas.

“This report makes clear that fairer electric rates are key to unlocking the full potential of clean heating,” said Kyle Murray, Director, State Program Implementation and Massachusetts Program Director for Acadia Center. “The proposed heat pump rates level the playing field, correcting outdated price structures and delivering real savings for households. This isn’t just about savings for individual households, smarter rates strengthen the grid, support a cleaner economy and move us closer to our climate goals.”

Under newly approved rates set to go into effect this winter heating season, 64% of households can save a median of $540 each winter by upgrading to heat pumps, with households that rely on delivered fuels and electric resistance able to see the greatest savings and 50% of natural gas users able to save money. Under DOER’s proposed rate, even greater savings are possible, reaching 74% of natural gas users, 91% of fuel oil users and 100% of propane and electric resistance users. These households could see median annual savings ranging from $361 to $1,755, depending on fuel type.

“It’s time for electricity rate structures to reflect the flexibility, efficiency, and resilience heat pumps bring to our energy system,” said Amanda Sachs from Rewiring America. “With heat pump rates, Massachusetts can incentivize the adoption of better technology, strengthening our grid and lowering energy bills for households.”

This analysis comes at a critical time. Last winter's volatile natural gas prices left many Massachusetts residents reeling from exorbitant heating costs, with some facing delivery charges as high as $400 in a single month. Yet outdated electric rates leave many Massachusetts heat pump owners overpaying for the electricity they use. Fairer rates under consideration by the DPU would fix this imbalance, helping residents achieve greater savings and accelerating the adoption of heat pumps.

“This report makes a powerful case for heat pumps, not just as a climate solution, but as a smart financial choice,” said Larry Chretien, Executive Director of Green Energy Consumers Alliance. “The data will surprise people who assume upgrading from gas to electric is expensive or out of reach. In reality, if we fix electric rates, highly efficient heat pumps can deliver real savings for households across Massachusetts.” 

Massachusetts has set ambitious targets for clean heating, aiming for 65% of homes to use heat pumps by 2030 and 90% by 2040. By adopting fairer electric rates, Massachusetts regulators can deliver immediate savings to heat pump owners while helping accelerate the adoption of heat pumps in existing homes, taking a major step toward the Commonwealth’s climate goals. 

“Too often, existing homes get left behind in clean energy upgrades,” concluded Lisa Cunningham, Co-Founder of ZeroCarbonMA. “But with the right rates in place, every household, not just new builds, can benefit from lower bills and cleaner air. This is a real opportunity to make our energy transition more affordable and more accessible to everyone.”

Learn more and download the full report at www.switch.box/mahprates