Due to recent legislation, federal tax credits for heat pumps and electrical panel upgrades are set to expire on December 31, 2025.
HEAT PUMPS
​​Heat pumps do exactly what their name implies: they pump heat from one area to another. This means they move heat, not create it, making them a more efficient heating and cooling system. The video below provides more explanation of how they heat and cool your home.​​
​​Heat pumps can be 3-4 times more efficient than traditional heating systems, providing more heat per unit of energy.​
Heat pumps serve as both a heater and an air conditioner, making them versatile year-round.
Heat pumps can last 15-20 years, offering long-term savings and reliability.
Modern heat pumps are designed to work efficiently even in temperatures as low as -20 °F.
These systems require minimal upkeep, with an annual check-up recommended.
POTENTIAL SAVINGS
Heat pumps produce the largest savings for homeowners in cold climates, meaning homeowners in Maine can see bigger savings than those in other states. Over time, heat pumps can save you close to 50% on energy bills compared to conventional heating methods like gas or oil. This means an average savings of around $950 a year. However, the exact amount of savings will depend on factors such as:
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The size of your home
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How energy efficient your home is
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How you currently heat your home
Installing a heat pump has also been found to increase home value, with one study estimating the increase to be $10,400 to $17,000.
FINANCIAL INCENTIVES
STATE REBATES​
Efficiency Maine has several heat pump rebates available; however, several are only available to low-income homeowners. The income guidelines for Efficiency Maine are:
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Low Income: A member of the household participates in MaineCare, HEAP, SNAP, or TANF
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Moderate Income: For a single filer $70,000, and for joint filers $100,000 maximum
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Any income: Individuals making above the moderate-income threshold
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Whole Home Heat Pumps
The rebate structure only applies to whole-home heat pumps. This means that heat pumps must be sized for at least 80% of the home’s peak heating load to qualify for the rebate. If the home already has a heat pump but needs a second to reach 80% of the heating load, that second heat pump would qualify for the rebate. In contrast, if a home has no heat pumps and only one heat pump is installed, it will most likely not qualify for the rebate. The rebate also only applies to single-zone units, meaning one indoor unit per outdoor unit. Finally, the heat pump must be installed by an Efficiency Maine registered vendor, a list of which can be found here.
The rebate amount is based on income:
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Low-income homeowners can receive $3,000 per eligible outdoor unit with a lifetime limit of $9,000 per home.
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Moderate-income homeowners can receive $2,000 per eligible outdoor unit with a lifetime limit of $6,000 per home.
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Any income homeowners can receive $1,000 per eligible outdoor unit with a lifetime limit of $3,000 per home.
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To learn more about this rebate or to start the rebate process, please visit Efficiency Maine.
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Manufacture (Mobile) Home Initiative
This initiative from Efficiency Maine helps low-income homeowners transition from heating with propane or kerosene to a ducted heat pump system, by covering $12,900 of the total $14,900 project costs.
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Eligible homeowners must participate in HEAP, SNAP, TANF, or MaineCare, or have an income of 80% or less of their county's median income, and reside in one of the eligible towns. To see if you qualify, please refer to this table.
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To learn more about the program and apply, please visit Efficiency Maine.
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Supplemental Heat Pump
To learn more about the program and apply, please visit Efficiency Maine. ​​
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FEDERAL TAX CREDIT
Through the Energy Efficient Home Improvement Credit, homeowners can claim a nonrefundable tax credit of 30% of the project costs, including labor costs, up to $2,000 for heat pump installations. This credit has no lifetime cap, so homeowners can continue to use it each tax year they make an upgrade. The credit can also be used in tandem with weatherization. Therefore, if you install a heat pump and air seal your home, you could receive a credit of up to $3,200.