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Over $135 million, and more is on the way. Gov. Janet Mills says the incentives are reducing the state's reliance on heating oil.
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Steve DeZenzo, left, and Travis Roux, workers for Royal River Heat Pumps, set an outdoor unit into position at a home in Cumberland on Friday. The number of Maine homes using electric heat pumps has doubled in the last decade, but still lags behind oil for home heating, despite subsidies to expand heat pump usage. Ben McCanna/Staff Photographer
Oil is still the dominant source of home heating in Maine, but it’s being chased by electric heat pumps in a race prodded by Gov. Janet Mills and financed by federal taxpayers, state ratepayers and other funding sources.
The governor has made electric heat pump installation a centerpiece of her administration’s energy and climate policy, bringing national attention to Maine. It’s come at a price: More than $135 million has been spent over the last decade to subsidize installation of electric heat pumps in Maine, and at least $125 million more is on the way.
“With close to one-third of Maine’s carbon emissions attributed to buildings, efficiency improvements to heating and cooling are a key strategy for reducing the state’s greenhouse gas emissions,” Mills said in a statement on Oct. 4.
Mills credits the rising use of heat pumps for a noticeable drop in Mainers’ reliance on heating oil. Census Bureau data show that the number of homes using electricity for heat in Maine nearly tripled to 79,160 in 2023, from 28,040 in 2014, when a state program encouraging heat pump installations began. Heating oil use declined to 323,666 houses from 342,185, a 5.4% drop in the same period, according to the American Community Survey’s one-year estimates.
Heating oil still dominates home energy sources, accounting for 52.5% last year, down from a 62.2% share in 2014. The share of homes using electricity for heating more than doubled, to 12.8% of all energy sources in 2023.
Maine is “still highly dependent on fossil fuels,” Mills said, referring to Census data that also tracks homes’ use of natural gas supplied by utilities, liquid propane gas and coal. Wood heat, which was used in about 58,000 homes in 2023, was down one-fourth since 2014 and accounted for roughly 9% of home heating.Advertisement
Solar power in homes is small, at 2,137 last year, up from a barely noticeable 451 in 2014.
Heat pumps use electricity to heat and cool buildings, often replacing oil or gas furnaces that contribute to greenhouse gases. The pumps extract heat from outdoor air or underground and transfer it inside, instead of heating a coil in a furnace, for instance. They also pull heat from indoors and dispatch it outside or underground, cooling homes down.
Andrew Price, president and chief executive officer of Competitive Energy Services, a Portland consulting group, said electric heat pump conversions are “indeed the primary source of the drop in oil use.”
“I expect electric heat pumps will continue to take significant market share away from oil in the years to come,” he said in an email. “Conversions from oil to natural gas also play a secondary role – but this is obviously limited to more urban areas that already have natural gas pipeline service.”
Efficiency Maine, the state’s quasi-state agency that promotes energy efficiency, could not break down how much money has been spent on heat pump incentives each year but provided information on spending in periods of several years. Executive Director Michael Stoddard said the group spent $25.6 million on heat pump incentives from fiscal years 2014 through 2019. The program ramped up slowly and most of the money was spent in the final two years, he said.
In July 2023, Mills announced Maine met one of its key climate plan goals two years early, installing 100,000 heat pumps by 2025. Maine had provided rebates for the installation of 104,000 pumps. Efficiency Maine said it spent about $61 million in incentives for heat pump installations in the state’s 2020-23 fiscal years that ended June 30.Advertisement
In fiscal year 2024, Efficiency Maine spent $32.7 million toward a new target set by Mills: another 175,000 heat pumps installed by 2027. That totals $119.3 million since 2014.
None of the funding was from state tax revenue. Efficiency Maine tapped the Regional Greenhouse Gas Initiative, a cooperative program among Maine and 10 other states to cap and reduce carbon dioxide emissions from the power sector; federal pandemic relief funds; electricity ratepayers; a settlement with the New England Clean Energy Connect transmission project; and revenue from a New England energy auction.
Travis Roux, lead installer for Royal River Heat Pumps, hangs an indoor unit at a home in Cumberland on Friday. Ben McCanna/Staff Photographer
MaineHousing, the state’s housing authority, also has invested several million dollars to install heat pumps in its own, income-based programs. The authority spent about $15.7 million in federal heating assistance funding and from the U.S. Department of Energy to install heat pumps in 4,236 households from 2020 to 2024, said Scott Thistle, spokesperson for MaineHousing.
Efficiency Maine expects that Mills’ target of installing 175,000 heat pumps in the next three years will partially be advanced by consumers who purchase heat pumps without tapping an Efficiency Maine rebate.
More money for electric heat pumps is on the way. Mills announced in July that Maine will receive between $45 million and $72 million from the U.S. Environmental Protection Agency to install electric heat pumps.
The EPA grant has not yet been received by the prime recipient, Connecticut’s Department of Energy and Environmental Protection, which is sorting out paperwork, Efficiency Maine said. A significant amount will likely be used for heat pump water heaters in Maine.
An additional $35 million from the U.S. Department of Energy targeted for heat pump installation has begun coming to the state. A second phase will add another $35 million, expected to start arriving in early 2025. The grant money will be spent over several years.
In addition, a separate $10 million federal energy grant to expand heat pumps in manufactured homes and mobile homes is expected in the next few months, Efficiency Maine said.
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