Massachusetts homeowners have a golden opportunity right now: lower their heating and cooling costs, reduce their carbon footprint, and take advantage of up to $10,000 in heat pump rebates and incentives. The key to making this happen? Closing the spark gap.
The spark gap—the ratio of electricity prices to fossil fuel prices—is a major factor in whether electric heating is cost-effective. The smaller the spark gap, the better the economics for switching to efficient electric heat pumps.
Right now, Massachusetts has some of the highest electricity rates in the country, which can make the switch seem less affordable—unless we rethink how electricity is priced.
Why the Spark Gap Matters for Heat Pumps
In a comprehensive analysis by Green Energy Consumers Alliance, experts show that countries with smaller spark gaps adopt heat pumps at a much faster rate. The logic is simple: when electricity is competitively priced against gas or oil, more homeowners make the switch.
Unfortunately, Massachusetts’ electricity surcharges—often designed to fund clean energy programs—can unintentionally widen the spark gap. That makes running a heat pump less cost-competitive, even if the installation is heavily subsidized through Mass Save® rebates.
Their recommendations include:
- Aligning Mass Save® incentives with a future Clean Heat Standard (CHS) so rates stay affordable.
- Reforming rate structures to provide winter discounts for electric heating.
- Shifting low-income assistance to electricity bills to support year-round affordability.
Rate Design: The Missing Piece in Heat Pump Savings
The American Council for an Energy-Efficient Economy (ACEEE) found that simply changing how we pay for electricity can make a huge difference. Their research shows that certain rate designs can prevent heating bills from increasing when homeowners switch from fossil fuels to heat pumps.
Best-performing rate structures include:
- Time-of-use rates: Charge less during off-peak hours, which matches heat pump usage patterns in winter.
- Winter discounts: Lower rates in cold months can save hundreds annually.
- Heat pump-specific rates: Massachusetts utility Unitil offers at least 20% off winter electricity for heat pump owners.
When combined with weatherization and available rebates, these rate structures can make heat pumps the most economical—and environmentally friendly—choice for Massachusetts homes.
What Massachusetts is Doing About It
The Massachusetts Interagency Rates Working Group (IRWG) is leading the way with both short- and long-term strategies for electric rate reform. Their goals include lowering energy burdens, supporting building electrification, and aligning rates with climate mandates.
In its Near-Term Rate Strategy Report (December 2024) and Long-Term Ratemaking Recommendations (March 2025), the IRWG called for:
- Rate structures that encourage electrification without overburdening customers.
- Coordination with the Department of Environmental Protection’s Clean Heat Standard to maximize affordability.
Supporting Policy from MassDEP
The Massachusetts Department of Environmental Protection (MassDEP) plays a critical role in this transition. Their work on EV charging infrastructure, emissions reduction, and climate programs complements rate reform by making clean energy options—including heat pumps—more accessible statewide.
Why Now is the Time to Switch to a Heat Pump
For Massachusetts homeowners, the combination of rebates, incentives, and evolving rate designs means the cost of switching to a heat pump has never been more attractive.
With Revise Heating and Cooling, you can:
- Access up to $10,000 in heat pump rebates.
- Reduce your monthly energy expenses—especially as rate reform moves forward.
- Increase comfort and efficiency year-round.
Sources & Further Reading:
- Green Energy Consumers Alliance – Closing the Spark Gap is Key to Electrification
- Canary Media – How Closing the Spark Gap Can Boost Heat Pump Adoption
- Massachusetts Interagency Rates Working Group
- Massachusetts Department of Environmental Protection
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