Maryland Heat Pump Leasing & Installation Guide
Benefits of Palmetto Heat Pumps
Say goodbye to clunky old systems and surprise repairs. Palmetto Comfort Plan gives you a brand-new heat pump, installation, and full support, all wrapped into one subscription.
Year Round Comfort
A high-efficiency heat pump keeps your home cool in summer, warm in winter, and your energy use in check all year long.
Forget the maintenance
With a Comfort Plan subscription, installation and maintenance are fully covered, no surprise bills, no weekend DIY.
Rewards for renewing
Stick with us and earn credits toward your next system upgrade. It’s our way of saying thanks for building a cleaner, comfier future with us.
Buy it or finance it. Your comfort, your call
There’s no wrong way to get cozy. Here’s how the options stack up, so you can choose what works best for you.
| Comfort Plan | Cash | Loan | |
|---|---|---|---|
| Payment schedule | $0 upfront, then monthly subscription | Full price upfront | $0 upfront, then monthly payment |
| Term length | 10 or 12 years | None | Variable |
| End of term options | Flexible with 25% renewal term credits to new system | No credits to new system | No credits to new system |
| Maintenance included | Yes | No | No |
| Eligible for incentives | Yes | No | No |
Get a quote See how Comfort Plan works
Maryland Heat Pump Rebates & Incentives
State and federal incentive programs can significantly reduce the cost of a new heat pump system. Here are the programs available to Maryland homeowners.
Home Performance with ENERGY STAR
Up to $15,000
Maryland’s flagship state rebate program offering substantial incentives for homeowners who switch from fossil-fuel heating systems to electric heat pumps or heat pump water heaters. Rebates cover up to 75% of project costs.
Eligibility: Available to all homeowners served by participating utilities (BGE, Pepco, Potomac Edison, Delmarva Power). Requires a $100 home energy audit performed by a BPI-certified contractor. No income restrictions.
Maryland Geothermal Rebate Program
$3,000
The Maryland Energy Administration provides rebates for qualifying geothermal heating and cooling system installations on residential properties.
Eligibility: Available to Maryland residents on Maryland residential properties installing new geothermal heating and cooling systems. Program is active as of January 2026.
Federal IRA Tax Credit
Up to $2,000
The Inflation Reduction Act provides a federal tax credit of up to $2,000 for qualifying heat pump installations through 2032.
Eligibility: Available to homeowners who purchase and install a qualifying heat pump system. Claimed on your annual federal tax return.
Maryland homeowners have access to substantial heat pump rebates in 2026. The Home Performance with ENERGY STAR program offers up to $15,000 for switching to electric heat pumps, plus a separate $3,000 geothermal rebate program. Combined with the federal IRA tax credit of up to $2,000, homeowners can significantly reduce their heat pump installation costs. Palmetto can help you navigate these programs, maximize your rebates, and handle the application process so you can focus on upgrading to efficient heating.
Incentive information is based on publicly available data as of 2026 and may change. Contact program administrators to verify current availability and eligibility requirements.
Maryland Electricity Prices
Maryland’s electricity costs have climbed steadily in recent years, now exceeding the national average and impacting every household’s monthly energy bills.
Between 2021 and 2024, Maryland’s electricity rates jumped from 13.1 to 17.9 cents per kilowatt-hour—a 37% increase that outpaced the national average growth of 20% over the same period.
Heat pumps offer a practical response to rising rates. Because they’re 2-3 times more efficient than traditional HVAC systems, they use significantly less electricity to deliver the same heating and cooling comfort.
As electricity costs continue their upward trend, that efficiency gap translates into meaningful savings year after year. Investing in a heat pump today means lower energy bills for decades to come.
Price of Energy: Maryland vs National Average
0¢
10¢
20¢
30¢
13.7¢
13.1¢
15.0¢
14.5¢
16.0¢
16.6¢
16.5¢
17.9¢
2021
2022
2023
2024
US Average
Maryland
Source: US Bureau of Labor Statistics, Energy Information Administration, Form 861
Maryland Utility Providers
Maryland residents are served by five major utilities with varying electricity rates. According to 2023 data, costs ranged from 11.72¢ per kWh (Potomac Edison) to 18.40¢ per kWh (Delmarva Power), compared to the national average of 16.0¢ per kWh.
These price differences reflect each utility’s infrastructure costs, energy sources, and service territories. Delmarva Power and Potomac Electric Power operate in densely populated areas with higher infrastructure maintenance costs, while Potomac Edison serves more rural regions with lower operational expenses.
Regardless of your utility provider, heat pumps can help manage electricity costs through superior efficiency. They move heat rather than generate it, using significantly less energy than traditional HVAC systems—making them a smart choice even in Maryland’s higher-cost utility areas.
Maryland Utilities Electricity Rates
| Utility Provider | Rate (cents/kWh) | Change (%) |
|---|---|---|
| Baltimore Gas & Electric Co | 16.47¢ | +3% |
| Potomac Electric Power Co | 18.16¢ | +13% |
| The Potomac Edison Company | 11.72¢ | -27% |
| Delmarva Power | 18.40¢ | +15% |
| Southern Maryland Elec Coop… | 14.13¢ | -12% |
| MD Average | 16.60¢ | +4% |
| US Average | 16.0¢ | — |
Source: US Energy Information Administration, 2023, Form 861, Table 6
Maryland Heat Pump City Guides
Explore detailed heat pump installation guides for cities across Maryland. Each guide includes local utility rates, incentives, and climate-specific recommendations.
Frequently Asked Questions
Do heat pumps work well in Maryland?
Yes, heat pumps work very well in Maryland. Modern heat pumps are designed to operate efficiently in temperatures well below freezing, and Maryland’s moderate climate—with average winter lows rarely dipping below 20°F—makes it an ideal location for heat pump technology. These systems provide both heating and cooling year-round, handling the state’s humid summers and mild winters with ease.
How much does a heat pump cost in Maryland?
Heat pump installation costs in Maryland typically range from $5,000 to $20,000 depending on the system size, efficiency rating, and your home’s specific needs. Factors like existing ductwork, insulation quality, and whether you choose a ducted or ductless system all influence the final price.
What are the best heat pump brands for Maryland homeowners?
Top heat pump brands for Maryland homeowners include Mitsubishi, Carrier, Lennox, Trane, and Daikin. These manufacturers offer cold-climate models with proven performance in Maryland’s variable weather, delivering efficient heating even when temperatures drop below freezing.
Are there heat pump rebates available in Maryland?
Yes, Maryland homeowners can access heat pump rebates through several programs. The federal Inflation Reduction Act offers tax credits up to $2,000 for qualifying heat pump installations when you purchase your system directly. Additionally, some Maryland utility companies and local programs provide rebates that can further reduce upfront costs, though availability varies by location and income level.
Should I lease or buy a heat pump in Maryland?
The choice between leasing and buying a heat pump in Maryland depends on your financial situation and preferences. Buying means paying upfront but owning the equipment outright, plus you may qualify for federal tax credits up to $2,000 under the Inflation Reduction Act. Leasing through a Comfort Plan requires $0 upfront and includes all maintenance and repairs with a predictable monthly payment.
Is a heat pump worth it financially in Maryland?
Yes, heat pumps are generally worth it financially in Maryland. With electricity costs at 17.9¢ per kWh, heat pumps can significantly reduce your heating and cooling bills since they move heat rather than generate it, making them 2-3 times more efficient than traditional systems.
What size heat pump do I need for my Maryland home?
The right heat pump size for your Maryland home depends on factors like square footage, insulation quality, ceiling height, and your home’s heating and cooling load. Most Maryland homes need a system between 2 to 5 tons. A professional energy assessment can calculate your exact requirements to ensure efficient operation and comfort year-round.