This story appears as part of a collaboration to strengthen investigative journalism in Maine between the BDN and The Maine Monitor. Read more about the partnership.
Federal tax incentives for clean energy upgrades are going away at the end of this year, cutting into potential savings on rooftop solar, heat pumps and more.
In 2026, homeowners who install a heat pump will no longer be able to apply for federal tax credits amounting to 30% off installation costs or new equipment.
At the same time, a pilot program from Central Maine Power that charged a lower rate in the winter to certain customers with heat pumps is also set to expire.
This means that homeowners may see costs associated with installing and running a heat pump go up next year, particularly as electricity rates continue to climb. Maine’s average electricity prices increased at the third highest rate in the country over the last decade, a previous analysis by The Maine Monitor found.
The federal energy efficiency tax credits, established under Biden’s landmark Inflation Reduction Act, are set to expire earlier than planned because of changes made this summer in President Donald Trump’s One Big Beautiful Bill.
Federal home energy rebates for low- and moderate-income families, however, will remain in place.
Efficiency Maine Trust, the quasi-state agency responsible for energy programs, plans to continue offering several types of heat pump rebates, including up to $9,000 for low-income customers and up to $3,000 for any income level.
Efficiency Maine has no plans to modify its heat pump incentives when the federal tax credits expire, according to Executive Director Michael Stoddard. Funding for the heat pump rebates comes from a variety of sources, including electric utilities, the Regional Greenhouse Gas Initiative, the Inflation Reduction Act and a grant from the federal Office of Clean Energy Demonstrations.
Other efforts to increase heat pump adoption and make them more affordable are underway.
Maine is part of a five-state coalition called the New England Heat Pump Accelerator, a $450 million effort that launched last month to get more heat pumps installed by offering financial incentives to distributors and contractors; supporting new pilot programs and workforce development efforts; and improving educational outreach. The accelerator was funded with money from the Climate Pollution Reduction Grants program created by the Inflation Reduction Act in 2022.
Maine surpassed Gov. Janet Mills’s goal to install 100,000 heat pumps by 2025 back in 2023. Now the state is working toward installing 275,000 units by 2027.
Maine Won’t Wait, the state’s climate action plan, tallied 143,000 heat pumps installed at the end of 2024. Rebates, combined with energy bill savings, have made heat pumps a popular alternative to heating systems that use oil, gas or propane.
Whereas traditional heating systems can only turn on and off, a heat pump can ramp up and down, said Shawn LaPlante, co-owner of LaPlante Home Services in Scarborough.
“It can use a little bit of electricity. It can use a lot of electricity when it needs it, and then it can go back down to a little bit of electricity. So it has the ability to vary,” LaPlante said.
In addition to reducing carbon emissions, as The Maine Monitor has previously reported, cost savings associated with heat pumps have become a key part of the sales pitch. The clean energy think tank RMI calculated that, in Maine, a household can expect an average of $700 in energy bill savings annually after switching from delivered fuel to a heat pump.
Ryan Shea is the manager of RMI’s buildings team, which focuses on research and policies related to reducing carbon emissions and boosting efficiency. Shea said the annual cost savings calculations were made using RMI’s Green Upgrade Calculator, which factors in details about a given home, such as its size and when it was built, as well as energy rates, heat pump type and climate.
“There really is a lot that goes into quantifying energy bills, especially when you’re switching fuels,” Shea said. “What this tool tries to do is factor in all of those inputs and generate an output that’s quite accurate.”
When stacked against the cost of installation, LaPlante said most customers can expect to make back their initial investment in five to eight years, depending on their circumstances. LaPlante said there’s been a “slight uptick” in the number of customers looking to install heat pumps since the change was announced to the federal tax credits.
“This just gave them a little push to say, well, why not, because I can get the federal tax credit,” LaPlante said. “It’s an extra $2,000 potentially, so I think that allowed them to push up their timeline, but they had to have already been thinking about it.”
