Maine is the northernmost state in the continental United States. Winters are long and cold, and the state has a disproportionately high reliance on fossil fuels, especially fuel oil, for home heating. In fact, according to Buildings Hub’s Residential Building Characteristics dashboard, almost half of Maine households rely on fuel oil for primary space heating — the highest per capita share in the nation. To put it in perspective, only 4 percent of total U.S. households rely on fuel oil to heat their homes.
Simply put, Maine is not a very electrified state. As of 2020, only 10 percent of Mainers reported using electricity for primary residential space heating, with 49 percent of households using fuel oil, 17 percent piped gas, 16 percent propane, and 8 percent wood (Figure 1).
Source: Buildings Hub 2020 Residential Building Characteristics Dashboard
But policy can grease the wheels to effect change. Maine Governor Janet Mills is working hard to reduce her state’s overreliance on polluting fuels for space heating and has championed building electrification to cut heating costs, curb emissions, and improve indoor air quality. In 2019, she signed an executive order establishing an ambitious statewide goal of installing 100,000 heat pumps in Maine by 2025, at a time when the state had few heat pumps deployed, with installations pushing passed 100,000 this year (Figure 2). Driven by political support and financial incentives, heat pump adoption quickly outpaced the original target. Aiming higher, Gov. Mills recently re-upped the statewide goal to an additional 175,000 heat pumps installed by 2027. If Mainers can achieve that aim over the next four years, that will mean a cumulative total of 320,000 heat pumps deployed across the state.
Source: Maine Governor’s Office
Motivations to Fuel Switch
The widespread use of fuel oil in Maine and across the Northeast has myriad negative externalities, including for public health and safety. A recent Buildings Hub data story shows how fuel oil is 40 percent more carbon intensive than even natural gas, and that burning it releases several pollutants that drive respiratory illnesses. In addition, fuel oil is also relatively expensive for residential customers, particularly in rural areas. Recent historic price peaks of $5.92 per gallon in May 2022 and $5.71 per gallon in November 2022 are the highest in at least the last twenty years. Another complicating factor is that fuel oil is a delivered fuel, as in customers must wait for it to arrive on a truck even amid winter storms that can paralyze deliveries. Likewise, fuel oil can contaminate soil and groundwater if spilled, or trigger fires if spilled indoors.
Incentives Drive Change
These concerns have incentivized tens of thousands of Mainers to make a change and switch fuels, made all the easier by Efficiency Maine’s (EM) energy efficiency rebates. The quasi-state agency offers $1,200 to single-family households of all income levels to purchase and install an air source heat pump, with that offering doubling to $2,400 for income-qualified households. EM also provides up to an additional $8,000 rebate for insulation and air sealing — a necessary first step in the heat pump installation process. Further, various commercial heat pump water heater and HVAC rebates are available based on business size, in addition to specific multifamily funding options.
The rest of Efficiency Maine’s rebate ecosystem is rich, with many appliances and upgrades available for rebates, including clothes washers, heat pump water heaters, and geothermal heat pumps. Moreover, the Main Housing Authority offers a no-cost heat pump purchase and installation program for qualifying low-income homeowners. These rebates and other Maine building-related policies can be found on our Spotlight States dashboard.
Crucially, Efficiency Maine’s rebates can be stacked with federal tax credits and rebates. This includes an annual credit of up to $2,000 for a heat pump and $1,200 for weatherization and panel upgrades. Moreover, Maine has received upwards of $70M through two federal IRA funding programs, collectively known as the Home Energy Rebate programs. Over the course of the next year, the Maine state government will launch rebate applications and everyday Mainers will be eligible for up to $8,000 in point-of-sale heat pump discounts.
In combination, assertive electrification policy, state rebates, and federal incentives will continue to accelerate heat pump adoption in Maine. Similar action across the fuel oil-dependent Northeast will help enable the transition from expensive, dirty fuels to cheaper, energy efficient electric appliances.
Even in the coldest parts of the country, heat pumps can work. Maine’s quick adoption rate signifies that not only are heat pumps feasible in cold climates, but that with the right policy and financial drivers, residents will buy into the technology. Maine’s current success story sets an important precedent and offers a valuable case study for other cold-weather states with ambitions to electrify.