Program Purpose: The adoption of ground source heat pumps (GSHPs) aligns closely with MEA’s mission and represents a promising pathway to help meet clean energy and heat goals under Maryland’s Climate Solutions Now Act of 2022. By leveraging the consistent temperature of the ground to provide highly efficient heating and cooling, GSHPs reduce reliance on fossil fuels, mitigate peak demand events, and enhance grid stability. For residents with these systems in their homes, GSHPs offer lower operating and maintenance costs, longer equipment lifespans, and greater insulation from fluctuations in utility energy prices. The program aims to lower the upfront cost barriers associated with GSHP installation and support market transformation with an emphasis on affordable housing within qualifying low-to-moderate income (LMI) and Overburdened census tracts.

Program Description: The program incentivizes the installation of GSHP systems at scale in residential new construction developments. MEA will provide a per-GSHP installation incentive to residential builders, developers, housing authorities or eligible business entities that install GSHP systems in qualifying new construction residential developments. This program is a pilot initiative; continuation or expansion beyond FY26 is not guaranteed and will be contingent on available funding, program performance, and other factors.

Type of Grant Program: Competitive

Anticipated Funding: A total of $2,000,000 is anticipated to be available for the program in FY26. The final funding amount may vary based on the number and quality of applications received and MEA’s available resources. MEA anticipates funding between one and three proposals, with a focus on GSHP deployments at scale. 

Geographic Requirements: Developments must be located in low-to-moderate income (LMI) and/or Overburdened census tracts as defined in Chapter 98 of the 2023 Laws of Maryland​ (HB550)​. A map of qualifying census tracts is available here. The MDEnviroScreen tool may also be used to identify Overburdened communities.

Request for Information: The Maryland Energy Administration previously issued a Request for Information seeking feedback on the design of a potential pilot program incentivizing the installation of GSHPs​ in residential new construction developments. The Maryland Energy Administration received valuable feedback from a variety of stakeholders and greatly appreciates all those who submitted responses.​