Cost Reduction Lab

The Cost Reduction Lab is a grant program designed to identify and demonstrate innovative business models, market approaches, implementation strategies, and technology solutions that reduce the cost of building decarbonization and accelerate market adoption. The program specifically focuses on decarbonizing existing small residential buildings (1 to 4 units) in Massachusetts, with the goal of lowering costs and improving affordability to drive wider adoption.

The program targets five priority problem areas: (1) Electrical Upgrade Triggers - reducing the need for costly panel upgrades through load management solutions; (2) Lack of Project Coordination - leveraging complementary projects to capture whole-project savings; (3) Geothermal Cost Barriers - reducing costs through new business models, drilling technology, and financing innovation; (4) Non-Standardized Heat Pump Installation - streamlining heat pump design and deployment processes; and (5) High Upfront Costs to Solar - reducing soft costs and accelerating adoption.

Eligible applicants include home performance contractors, technology installers, technology providers, academics, and consultants. All proposals must demonstrate cost savings of a decarbonization solution applicable to Massachusetts. The program will distribute up to $2.5 million across up to 20 grantees, with a maximum of $500,000 per grantee. The application period runs from March through May 2026, with application review and awarding occurring in May-June 2026. Selected projects will conduct demonstrations from July 2027 through June 2029.

MassCEC is fostering collaboration between industry actors through a public collaboration platform to establish value-add partnerships. The program will support demonstration activities, measurement and verification, and business support services. Outcomes will be assessed for cost reduction potential and disseminated to scale successful solutions.