Since 2009, the state of Massachusetts has offered home and business owners incentives for using renewable sources of heat, including for air- and ground-source heat pumps. You’ve probably heard about the rebates you can receive through Mass Save, but did you know about the Alternative Energy Certificates (AECs) you can earn from the Department of Energy Resources (DOER)?
What are AECs? The concept is similar to earning Renewable Energy Credits (RECs) from solar photovoltaic panels which generate electricity from sunlight instead of from burning fossil fuels. Heat pumps can earn AECs because they extract about two-thirds or more of the heat they supply from outdoor air or the ground instead of from burning fossil fuels.
How much are the AECs worth? The DOER estimates that a typical 2,000 sq. ft. home would generate 120 AEC’s for a qualifying air-source heat pump and 307 AEC’s for a qualifying ground-source heat pump over 10 years. According to Joe Uglietto, President of Diversified Energy Specialists, AEC’s were trading in the range of $3 to $4 in the fall of 2024, down from $25 in early 2020. Based on current values, AEC’s might generate around $300 to $500 for an air-source heat pump and around $900 to $1,200 for a ground-source heat pump over 10 years.. Here’s the good news: For typical residential and small-business heat pumps, DOER “pre-mints” the AECs, which means the system owner receives 10 years worth of AECs in the first quarter they are qualified.
How do you acquire the AECs and get value from them? The AEC application process is complex enough that DOER discourages homeowners and small businesses from applying directly. Instead, they provide a list of AEC aggregators, some of which may accept applications from homeowners and small businesses. Even applying through an aggregator may take more time than most are willing to spend. By far the easiest way to get paid up-front for the AECs is if the heat pump installer applies on their customer’s behalf. Most ground-source heat pump installers already do this. Unfortunately, we’re aware of just a few air-source heat pump installers who apply for AECs for their customers.
If you’re a homeowner or small business that is installing an air-source heat pump, ask your installer whether they apply for AECs. If not, encourage them to talk with Joe Uglietto at Diversified Energy Systems or another aggregator listed by the DOER to learn how. We’re told that applying for AECs through an aggregator is similar to applying for a Mass Save rebate, so it shouldn’t take much additional effort once an installer learns how to do it. The HeatSmart Alliance encourages all heat pump installers to become familiar with AECs and apply on behalf of their customers.
