ADU Rebates & Energy Incentives
Massachusetts will pay you real money to build an efficient ADU — but the two ways to collect it are mutually exclusive, and both have deadlines that land before construction starts.
None of the money on this page comes from us. It comes from Mass Save, which is funded by Massachusetts utility ratepayers and administered by six utility Sponsors, and it is paid on the strength of how the finished building performs. We are the contractor who has to build to that standard, and the one who has to tell you honestly when a number you found online no longer exists.
Read this before you have drawings. Almost every incentive described here is forfeited by starting construction first — not because the building would fail to qualify, but because nobody enrolled it in time.
The decision that shapes everything else
Two Tracks, and You Only Get One
Homeowners usually arrive assuming they will collect a heat pump rebate, a water heater rebate, and a new construction incentive, and add them up. Mass Save does not work that way. Its Single-Family New Construction program says directly that customers in it “are not eligible for individual equipment rebates through the Mass Save Heating & Cooling programs.” The whole-building incentive replaces the per-equipment ones.
Track one — whole building
$7,500 to $25,000
Mass Save Residential New Construction, paid on the performance of the finished ADU. Requires all-electric construction, EV charging readiness, and enrollment through a HERS rater by the midpoint inspection. Worth more, and demands more.
Track two — per equipment
$2,500 + $1,500
Rebates on the individual machines — heat pump, heat pump water heater — claimed after installation. Fewer strings, smaller ceiling, and no requirement that the whole building hit a performance target.
Which one wins depends on the ADU. A compact all-electric build heading for a strong HERS result usually collects more on track one, and the gap widens fast at the certification tiers. A project that cannot go fully electric — a gas cooktop the homeowner will not give up is enough — is on track two whether it wants to be or not.
Track One: Mass Save Residential New Construction
This is the program a detached ADU is built for. Mass Save treats single-family new construction as buildings of one to four units and publishes an incentive for each unit count; a standalone ADU is a one-unit building, so the figures below are the one-unit column. The tier you land in is set by how far the finished building beats the code baseline, verified by a rater.
Base tier
$7,500
All-electric, at least 15% savings above the code baseline
ENERGY STAR tier
$15,000
ENERGY STAR NextGen — at least 30% savings above baseline, or HERS 45 or lower
Passive House tier
$25,000
Phius or PHI certification
On top of the tier, Mass Save pays per-unit “market transformation adders” for specific equipment and certifications. These stack, and two of them are restricted to particular tiers:
ENERGY STAR certified ground-source heat pump
$9,000
Split-system heat pump water heater
$750
DOE Zero Energy Ready certification (Base and ENERGY STAR tiers)
$500
Induction cooktop
$250
ENERGY STAR v3.2 certification (Base tier only)
$250
Wi-Fi connected thermostat (Base tier only)
$100
What Track One Requires of the Building
These are not suggestions and there is no partial credit. Every one of them has to be true, and three of them have to be true before the framing is done.
All-electric, with no exceptions
The ADU has to use electricity for space conditioning, water heating, cooking, and clothes drying. Not most of them — all four. As of July 1, 2024 the Mass Save Sponsors discontinued incentives for homes with natural gas, oil, or propane equipment, so a single gas range takes the whole incentive off the table.
EV charging readiness
The project must meet the program's requirements for electric vehicle charging readiness. This is cheap to build in and expensive to retrofit, which is exactly why it belongs in the electrical plan rather than in a change order.
A certified HERS rater, enrolled early
You do not apply to Mass Save yourself. You contact an approved Home Energy Rating System (HERS) rater, who enrolls the project and verifies it. Projects must be enrolled by the midpoint inspection — miss that and the incentive is gone no matter how efficient the finished building is.
Inside a Sponsor's service territory
The property has to sit in a Mass Save Sponsor's Massachusetts service territory. Most of the North Shore does; every Massachusetts town in our lookup is served by one of the six Sponsors, but the specific Sponsor determines which forms you file.
No individual equipment rebates on top
Mass Save states it plainly: customers in this program are not eligible for individual equipment rebates through the Mass Save Heating & Cooling programs. The whole-building incentive replaces them. That is the single most consequential sentence on this page.
The Sponsors are Berkshire Gas, Cape Light Compact, Eversource, Liberty Utilities, National Grid, and Unitil. Which one serves you decides whose paperwork you file, not whether you qualify.
Track Two: Rebates on the Equipment Itself
If the ADU is not taking the whole-building incentive, the individual rebates are back on the table. Read the heat pump tiers carefully, because the headline number is not the one a new ADU gets.
Air source heat pumps
Mass Save’s 2026 rebate has three tiers. The whole-home tier pays $2,650 per ton up to $8,500, and the partial-home tier $1,125 per ton up to the same cap — but both are written around displacing an existing oil, propane, or electric resistance system. A newly built ADU has no existing system to displace.
The tier that fits new equipment is the basic rebate:
Tonnage is figured from the equipment’s AHRI cooling capacity divided by 12,000 BTU. Every tier requires ENERGY STAR Cold Climate certified equipment installed by a contractor in the Mass Save Heat Pump Installer Network. Mass Save decides which tier an installation earns — we do not.
Heat pump water heaters
Two rebate levels for 2026, both requiring ENERGY STAR certified equipment installed by a licensed plumber, limited to one rebate per gas or electric account:
Mass Save allows this equipment to be installed as part of a new home construction project “that is not earning incentives through another Mass Save program” — the mutual exclusivity again, stated from the other side. On track one, a split-system heat pump water heater instead appears as the $750 per-unit adder listed above.
Attached and Internal ADUs Are a Different Program
A detached ADU is new construction in the ordinary sense. Bumping a unit onto the side of the house, or carving one out of a basement or an attic, is not — and Mass Save routes that work through its Renovations and Additions program instead. The thresholds matter, because a project can fall between them and reach neither:
What gets in
- Additions of at least 500 square feet of total floor area
- Renovations extensive enough to consist of 50% or more of the original home
- Buildings of three stories or less, in a Sponsor’s service territory
- A minimum of 5% above baseline per unit to earn anything at all
How it pays, and the gate
The base incentive runs on a pay-for-savings formula — a rate per kilowatt-hour and per MMBtu saved, plus a bonus scaled to the savings percentage — subject to a cap of $10,000 per unit. Higher tiers exist above it, and the same July 2024 electrification rule applies: no incentives for gas, oil, or propane equipment.
The gate is timing. This program requires a preliminary HERS rater site visit before construction begins. There is no retroactive path.
Mass Save has published its own guidance on ADUs specifically, prompted by the February 2025 Stretch Code update that added an ADU column to Table R406.5, and trains raters on how ADUs differ from ordinary additions and which incentives apply to which ADU scenarios. So treat the program assignment above as the shape of the decision, not as your answer — the rater who enrolls your project makes the call, and we would rather you hear it from them than from a builder’s summary.
The Deadlines That Quietly Void the Money
Nearly every homeowner who misses out on these incentives does so on timing, not on performance. The building would have qualified. Nobody enrolled it.
New construction: enroll by the midpoint inspection
The new construction program requires projects to be enrolled by the midpoint inspection. Homeowners who find out about the incentive when the drywall is going up have already lost it.
Renovations and additions: rater visit before construction begins
That program requires a preliminary HERS rater site visit before construction begins. There is no way to satisfy it retroactively. If your ADU is an addition or a conversion, this call gets made before demolition, not after.
Equipment rebates: install in the year, file by the deadline
Equipment rebates run on a calendar year. The 2026 terms cover installations from January 1 through December 31, 2026, with documentation due by February 28, 2027. A build that slides across New Year's Eve is quoted against a different rebate table than the one you budgeted from.
This is why the incentive conversation belongs in the same meeting as the drawings. By the time you are choosing paint, every one of these doors has closed.
The Federal Credits Are Gone. Budget Accordingly.
For years the standard advice on an efficient new build included a 30 percent federal tax credit on heat pumps and solar. That advice is now wrong, and it is still all over the internet. The IRS states that the Residential Clean Energy Credit “is not available for any property placed in service after December 31, 2025,” and that the Energy Efficient Home Improvement Credit is allowed for qualifying property placed in service before December 31, 2025. Both were terminated early by the law enacted on July 4, 2025.
An ADU completed in 2026 does not reach either one. If an estimate, a calculator, or a salesperson is still crediting you 30 percent back from the federal government, the number is stale — and a budget built on it is short by five figures. We would rather deliver that news now than have you discover it at tax time.
On the state side, Massachusetts still has its own residential solar and wind energy credit under 830 CMR 62.6.1, equal to 15 percent of the net expenditure for renewable energy source property or $1,000, whichever is less, for a taxpayer who occupies the residential property as a principal residence. Whether an array serving an ADU on your own parcel qualifies is a tax question with a real answer, and that answer comes from an accountant reading the regulation against your situation — not from us.
What We Actually Do About This
Raise it before drawings
Whether you are chasing an incentive tier changes the envelope, the mechanicals, and the electrical plan. Deciding it after the design is finished means paying twice.
Get the rater in early
Both whole-building programs run through a certified HERS rater, and both have a deadline that lands during construction. We build the rater’s visits into the schedule rather than treating them as an interruption.
Build to the number
Air sealing and insulation detail are where these tiers are won or lost, and they are ordinary work done carefully rather than exotic materials. Our standard ICF foundations help here for the same reason.
ADU Rebate Questions
Are there rebates for building an ADU in Massachusetts?
Yes, through Mass Save rather than through any ADU-specific program. A newly built detached ADU that runs all-electric can qualify for Mass Save's Single-Family New Construction incentives, which pay $7,500 for a one-unit building at the base tier, $15,000 at the ENERGY STAR tier, and $25,000 for a Passive House certified building, plus per-unit adders for equipment such as a split-system heat pump water heater or an induction cooktop. An attached or internal ADU is more likely to fall under the Mass Save Renovations and Additions program instead. Which program applies to a specific project is determined by Mass Save through the HERS rater who enrolls it.
Can I get the Mass Save new construction incentive and the heat pump rebate?
No. Mass Save states that customers participating in the Single-Family New Construction program are not eligible for individual equipment rebates through the Mass Save Heating & Cooling programs. You take the whole-building incentive or you take the per-equipment rebates, not both. For most all-electric ADUs the whole-building path is worth considerably more, but it carries requirements — all-electric across space conditioning, water heating, cooking and clothes drying, EV charging readiness, and enrollment by the midpoint inspection — that the equipment rebates do not.
How much is the Mass Save heat pump rebate on a new ADU?
If the project is taking individual equipment rebates rather than the whole-building new construction incentive, the tier that fits new equipment is the basic rebate at $250 per ton, capped at $2,500. The larger whole-home rebate of $2,650 per ton up to $8,500 is written around replacing an existing oil, propane, or electric resistance heating system as the sole source of heating and cooling, and a newly built ADU has no existing system to displace. Every tier requires ENERGY STAR Cold Climate certified equipment installed by a contractor in the Mass Save Heat Pump Installer Network. Mass Save determines which tier a specific installation earns.
Is there a rebate for a heat pump water heater in an ADU?
Mass Save's 2026 heat pump water heater rebates are $750 for a qualifying ENERGY STAR certified integrated unit and $1,500 for a split system, limited to one rebate per gas or electric account and requiring installation by a licensed plumber. Mass Save allows the equipment to be installed as part of a new home construction project that is not earning incentives through another Mass Save program — so this is a rebate for ADUs on the equipment track, not for ADUs taking the whole-building new construction incentive. On that track, a split-system heat pump water heater instead shows up as a $750 per-unit adder.
Do the federal energy tax credits still apply to an ADU finished in 2026?
No. The IRS states that the Residential Clean Energy Credit is not available for any property placed in service after December 31, 2025, and that the Energy Efficient Home Improvement Credit is allowed for qualifying property placed in service before December 31, 2025. Both were terminated early by the law enacted July 4, 2025. If you are working from a contractor's estimate, a lender's worksheet, or an online calculator that still counts a 30 percent federal credit toward a heat pump or a solar array on a 2026 ADU, that number is stale — check the IRS pages directly before you build it into a budget.
What does an ADU have to do to qualify for the highest Mass Save incentive?
The $25,000 one-unit tier requires Phius or PHI Passive House certification, which is a genuine performance standard rather than a paperwork exercise — it drives envelope, air sealing, and mechanical decisions from the first drawing. The middle tier at $15,000 requires ENERGY STAR NextGen with at least 30 percent savings above baseline or a HERS index of 45 or lower. The base tier at $7,500 requires all-electric construction with at least 15 percent savings above baseline. All three assume decisions made at design time; none of them can be added to a building that is already framed.
Do attached and internal ADUs get the same incentives as detached ones?
Not usually, because they are usually a different kind of project. Mass Save's Renovations and Additions program covers additions of at least 500 square feet of total floor area and renovations that are extensive enough to consist of 50 percent or more of the original home, in buildings of three stories or less, and it requires a preliminary HERS rater site visit before construction begins. Its base incentive is calculated on a pay-for-savings formula capped at $10,000 per unit, with a minimum of 5 percent savings above baseline to qualify. Mass Save has published its own guidance on how its incentives apply to ADU projects specifically, following the February 2025 Stretch Code update that added an ADU column to Table R406.5, so the program assignment is a question for Mass Save and your rater rather than for a builder.
Do any of these rebates apply in southern New Hampshire?
No. Mass Save is a Massachusetts program funded through Massachusetts utility ratepayers, and its Sponsors are Berkshire Gas, Cape Light Compact, Eversource, Liberty Utilities, National Grid, and Unitil operating in Massachusetts service territories. A property in New Hampshire is outside all of it. We build in southern New Hampshire, but a homeowner there should be looking at NHSaves and their own utility's programs instead.
Sources
Every incentive figure on this page was read off the sponsoring program’s own page on September 4, 2026. Mass Save reissues its rebate tables annually and the federal picture changed in 2025 — verify against the source before you rely on any of it, and confirm your specific project with Mass Save rather than with a contractor.
- Single-Family New Construction (1–4 units) — Mass Save
- Air Source Heat Pumps — Mass Save
- Heat Pump Water Heaters — Mass Save
- Energy-Efficient Renovations and Additions — Mass Save
- How Renovations and Additions Incentives are Calculated — Mass Save
- R7.0 Accessory Dwelling Units (ADUs) and the Massachusetts Stretch Code — Mass Save trade partner training
- Residential Clean Energy Credit — Internal Revenue Service
- Energy Efficient Home Improvement Credit — Internal Revenue Service
- 830 CMR 62.6.1: Residential Energy Credit — Commonwealth of Massachusetts
Planning an ADU? Let's Talk Before the Drawings
The incentive tiers are decided at design time, not at inspection time. We'll walk your property, talk through what an all-electric build would take, and put a written estimate in your hands. Free, no obligation.