You did the research. Massachusetts pays up to $8,500 toward a whole home heat pump, and after years of putting it off, this finally looks affordable. Then you called about the rebate and learned your town is not part of the program. If your electric bill comes from a municipal light plant rather than Eversource, National Grid, or Unitil, the Mass Save rebate is closed to you. It is a frustrating discovery, and plenty of homeowners in central Massachusetts hit it every year. The good news is that the state launched something new this fall aimed squarely at this gap.
Why Your Town Is Left Out
Mass Save is not a state agency handing out money. It is funded by a charge on the bills of customers served by the investor owned utilities, and it is run by those same companies. If your town owns and operates its own electric department, you never paid into that fund, which is why you cannot draw from it.
More than 50 Massachusetts communities take their power this way, through roughly 40 municipal departments. Locally owned power has often meant lower rates, so the arrangement carries real benefits. Access to statewide efficiency rebates is not one of them.
Which Local Towns This Affects
Across the area we serve, these communities have municipally owned electric service: Ashburnham, Boylston, Holden, Paxton, Princeton, Shrewsbury, Sterling, Templeton, and West Boylston in Worcester County, along with Belmont, Concord, Groton, Hudson, Littleton, Reading, and Wakefield in Middlesex County.
A few towns get power from a neighbor's department rather than their own. Boxborough is served by Littleton Electric Light, Stow by Hudson Light and Power, and North Reading and Wilmington by Reading Municipal Light Department. If you live in one of those, you are in the same boat.
The simplest check takes ten seconds. Look at the top of your electric bill. If it says the name of a town rather than the name of a company, this article is about you.
Start With Your Own Utility
Before anything else, call your municipal light department and ask what they offer on heat pumps.
Many of them run their own rebate programs, and the amounts vary quite a bit from one town to the next. A few run per ton incentives similar in structure to Mass Save. Others pay a flat amount, and some offer very little at all. There is no statewide rule here, which is exactly why you have to ask rather than assume. Your neighbor two towns over may have gotten a very different deal.
The New Zero Interest Loan, Launched This Fall
Here is the part most homeowners have not heard about yet.
In September 2026 the state launched the DOER MLP Z-Loan, a $9.7 million zero interest loan program built specifically for people served by municipal light plants. Verified as of September 2026, it offers financing of up to $25,000 at zero percent interest.
The loans cover heat pumps, heat pump water heaters, insulation, and weatherization barriers. That last category is worth understanding, because it covers the work that has to happen before an upgrade is even possible, things like updated electrical wiring, structural repairs, or mold and vermiculite abatement. For older homes in this part of the state, that clause matters.
The mechanics are straightforward. Private lenders issue the loans, and the state pays the interest using federal and state funds. You repay only what you borrowed.
There is an eligibility condition worth knowing before you get your hopes up. The loan is for homes that take electric service from a municipal light plant and heat with electricity from that utility, gas from a municipal gas company, or a delivered fuel like oil or propane. If your home heats with natural gas from one of the big utilities, you fall outside the Z-Loan, because the Mass Save HEAT Loan is considered your route instead. That is a distinction worth confirming with your own utility rather than guessing from your electric bill alone.
How to Apply Without Losing Your Eligibility
The order of operations is strict, and getting it wrong costs you the loan.
First, schedule a home energy assessment. Depending on which utility serves your town, that gets booked through Energy New England or NextZero, and your municipal light department will tell you which one.
Second, get a proposal from your contractor for the work you want done.
Third, apply at myz-loan.com and wait for approval from the lender.
Only then should any work begin. Starting the project before your approval comes through disqualifies you, and that mistake cannot be undone afterward. Funding is also not guaranteed, since the program depends on available money and lender approval, so applying earlier in the program's life is better than later.
One Exception Worth Checking
There is a wrinkle that catches people both ways.
Mass Save is run by both electric and gas utilities. If your electricity comes from your town but your home also has natural gas service from a Mass Save gas sponsor, certain gas side programs may still be open to you, including the Mass Save HEAT Loan. This does not bring back the heat pump rebate, which is funded on the electric side, but it is worth a phone call before you assume you are shut out of everything.
What Does Not Change
A few things apply no matter who sends your electric bill.
Massachusetts exempts heat pump systems from the 6.25 percent state sales tax when they serve your principal residence, and the Department of Revenue has ruled that the exemption reaches the related ductwork and hardware too. It does not cover a second home or a vacation property, and your contractor has to file an exempt use certificate for it.
The federal tax credit for heat pumps expired on December 31, 2025, so nobody in the state is getting that, municipal customer or not.
The equipment standards that make a heat pump worth owning in New England are also the same everywhere. You still want a cold climate rated system sized to your actual heating load rather than to your square footage.
The seasonal discounted heat pump electric rate that launched last winter applies to Eversource, National Grid, and Unitil customers. Municipal utilities set their own rates, so ask yours whether it offers anything comparable for homes that heat electrically.
The Honest Summary
Being in a municipal light plant town costs you the Mass Save rebate, and there is no way around that. It does not cost you the project. Between whatever your own utility offers, the new zero interest loan if your fuel qualifies you, and the sales tax exemption, the math on a heat pump conversion still works for plenty of homes here. It just requires a few more phone calls than your neighbor in the next town over had to make.
Frequently Asked Questions
Why can't I get Mass Save rebates if I live in a municipal light plant town?
Mass Save is funded through a charge on the bills of customers served by investor owned utilities like Eversource, National Grid, and Unitil, and administered by those companies. Municipal light plant customers do not pay into that fund, so they are not eligible to draw from it. More than 50 Massachusetts communities are in this position.
What is the MLP Z-Loan and how much can I borrow?
The DOER MLP Z-Loan is a zero interest loan program the state launched in September 2026 for municipal light plant customers, funded at $9.7 million. It offers up to $25,000 at zero percent interest for heat pumps, heat pump water heaters, insulation, and preparatory work like electrical upgrades. Eligible homes take electric service from a municipal light plant and heat with that utility's electricity, municipal gas, or a delivered fuel such as oil or propane. Apply at myz-loan.com after a home energy assessment and a contractor proposal, and wait for approval before starting work.
Which towns near Worcester have municipal electric service?
In this area, Ashburnham, Boylston, Holden, Paxton, Princeton, Shrewsbury, Sterling, Templeton, and West Boylston have their own electric departments, as do Belmont, Concord, Groton, Hudson, Littleton, Reading, and Wakefield. Boxborough, Stow, North Reading, and Wilmington receive service from a neighboring town's department. Check the name at the top of your bill if you are unsure.
Can I get any Mass Save help at all as a municipal light plant customer?
Possibly, depending on your fuel. If your home has natural gas service from a Mass Save gas sponsor, some gas side programs and the Mass Save HEAT Loan may be available even though your electricity comes from the town. The heat pump rebate itself is funded on the electric side, so that one stays out of reach.
Not sure what your town offers or how the new loan applies to your home? LaCroix Heating and Cooling has installed heat pumps across Worcester and Middlesex Counties since 2012, including every municipal light plant town listed above, and we can tell you what your project actually qualifies for before you commit to anything. We are a Fujitsu Elite Contractor and a Mass Save approved heat pump installer, and our work carries a 1 year installation warranty plus 12 year manufacturer parts coverage. Call or text (508) 762-9131.
