What it costs to switch
Short answer: Mass Save’s own example puts an average whole-home air source heat pump at about $22,000 installed (2022 program data), minus an $8,500 rebate for a net of about $13,500. Quotes today may differ, and panel and tank work are extra. These are estimates, not quotes.
The up-front side
| Item | Amount | Source / status |
|---|---|---|
| Average whole-home installed cost | $22,000 | Mass Save example, 2022 program data (Mass Save: air source heat pumps) |
| Mass Save whole-home rebate | up to $8,500 | $2,650 per ton, 2026 (Mass Save: air source heat pumps) |
| Net cost, standard | about $13,500 | Mass Save example |
| Net cost, income-based enhanced | about $6,000 | Up to $16,000 rebate or no cost via Turnkey |
| Federal tax credit | $0 for 2026 | Expired for spending after Dec 31, 2025 (Mass Save: air source heat pumps) |
| Insulation and air sealing | 75-100% off; assessment no cost | Mass Save: home energy assessments |
| Electrical panel upgrade | No sourced figure | Ask your installer to price it. RMLD customers: a $500 RMLD panel rebate (RMLD rebates). |
| Oil tank removal | No sourced figure | Get a quote; ask your fire department about permits. |
The 0% Mass Save HEAT Loan covers up to $25,000 of weatherization and heat pump work, so a net cost around $13,500 can be spread out rather than paid in cash (Mass Save: 0% financing).
The running-cost side
Heating oil averaged $6.08 a gallon in the DOER survey of 09/28/26 (Mass. DOER), against a 2025/26 winter average of $4.09. Massachusetts residential electricity averaged 30.49 cents per kWh in July 2026 (EIA Electric Power Monthly).
A gallon of heating oil holds 138,500 Btu; at an 80 percent efficient system that is 110,800 Btu of heat. A heat pump with a seasonal COP of 2.5 makes the same heat from about 13 kWh. At 30.49 cents that is about $3.96 against $6.08 for the gallon of oil, before any winter heat pump rate discount. (Conversions: EIA Btu conversions; the 80 percent and COP 2.5 are our assumptions and are editable in the calculator.)
| Gallons per year | Oil at $6.08 | Heat pump, 100% of heat (est.) | Difference (est.) |
|---|---|---|---|
| 800 | $4,864 | $3,168 | $1,696 / yr |
| 1,000 | $6,080 | $3,960 | $2,120 / yr |
| 1,200 | $7,296 | $4,753 | $2,543 / yr |
Estimates at an 80% efficient oil system, COP 2.5, 30.49 cents/kWh and no winter-rate discount. Using the winter heat pump rate lowers the heat pump column further. Last winter’s lower oil price would shrink the difference a lot, which is why the calculator shows both.
Simple payback
Net cost divided by yearly savings. At a $13,500 net cost and $1,000 a year of savings, payback is 13.5 years; at $2,000 a year it is 6.8. The calculator does this with your numbers and also shows the result at last winter’s oil price, because oil prices have fallen sharply before. Heat pumps also cool the home, which this estimate ignores.
Honest limits. Real bills depend on weather, house, comfort settings and the installed system. Cold-climate heat pumps lose efficiency in deep cold, which is why many installers size a backup or keep the old system for the first winter. Costs we could not source are marked “No sourced figure” on purpose.