Cozy Maine house in the middle of winter with thick snow on the ground

Everything you need to know before switching to heat pumps in Maine

By Raine Raynor

DID YOU KNOW that heat pumps are now more common than oil heat in new homes built in Maine? That’s because they offer highly efficient heating, air conditioning and dehumidification in one machine. Heat pumps aren’t just limited to new builds—they can replace boilers and furnaces in existing homes, too.

Maine has long been an outlier in its reliance on oil to heat homes, but the state is now leading the United States in delivery of heat pumps. In Maine, heat pumps are now more common than oil heat in newly built homes, and over 140,000 residential heat pumps have been installed as of February 2024.

This progress towards efficient and fossil-fuel free heating can be attributed to Maine’s aggressive climate reduction goals outlined in the Maine Won’t Wait climate plan. Introduced in 2020, Maine Won’t Wait sets goals and strategies to reduce Maine’s greenhouse gas emissions, foster clean energy careers, conserve natural resources and protect communities from the harmful effects of climate change. Governor Janet Mills originally set a goal of 100,000 new heat pumps installed by 2025; this goal was surpassed in 2023 and revised to 275,000 new heat pumps by 2027 (or an additional 175,000 on top of the original goal).

“For homeowners, heat pumps are a win-win,” says Hannah Pingree, director of the Governor’s Office of Policy Innovation and the Future. “It is an efficient technology that can be a cheaper way to heat your home. And this industry produces good-paying jobs.”

Are heat pumps in the future for your home? We cover the basics below to help you make an informed decision.

Heat Pumps in Use

You may be wondering…how exactly does a heat pump work? It’s the same technology as an air conditioner, but a heat pump can be used to both heat and cool your home. The unit extracts heat from outside and uses it to heat the interior of your home. To cool, it absorbs heat from inside your home and dumps it outside. Modern heat pumps are highly efficient and run entirely on electricity. You can use them year-round without backup, including at temperatures below 0° F. When you combine heat pumps with a renewable energy source such as solar, you can keep your home warm in the winter and cool in the summer without needing to use fossil fuels.

Using a heat pump is simple—it’s often recommended by installers to “set it and forget it.” You might be used to turning down the heat at night to save money, but not so for heat pumps. It requires more energy for a heat pump to reheat your home if you turn down the heat for a short period of time than for it to maintain a constant comfortable temperature.

Wall unit heat pump

Floor unit heat pump

Ceiling cassette heat pump

Ducted heat pump

Myths vs. Facts

There are many misconceptions about using heat pumps in cold climates. Let’s debunk some common myths:

Myth: Heat pumps need backup in the cold.
Fact: High-efficiency heat pumps can heat your home without backup at outdoor temperatures as low as negative 22° F.

Myth: Heat pumps only work in super-insulated homes.
Fact: Insulation and air sealing are great ways to improve your home’s efficiency, but you don’t need to wait to install a heat pump. They work in any home.

Myth: Boilers and furnaces are more efficient than heat pumps in the cold.
Fact: Even at temperatures below 0° F, heat pumps that are eligible for Efficiency Maine rebates can be more than 2x as efficient as the most efficient boiler or furnace.

Myth: When switching exclusively to heat pumps, you need to leave your boiler on to prevent it from leaking and pipes from freezing.
Fact: Instead of leaving your boiler on, you can install new gaskets or drain it to prevent leaks. You can also minimize the risk of frozen pipes with insulation, heat tape on at-risk pipes or space heaters set to keep the temperature just above freezing.

Myth: Home insurance is not available for homes heated exclusively with heat pumps.
Fact: Many companies offer insurance policies for homes heated exclusively with heat pumps, including Allstate, Amica, Horace Mann, State Farm and Liberty Mutual as of February 2024. Efficiency Maine maintains an up-to-date list on their website.

Source: Efficiency Maine Heat Pumps Myths & Facts

Let’s talk finances: Tax credits, rebates and more to pay for your heat pump in Maine

Heat pumps are not only environmentally friendly—they are also budget friendly.

Tax credits and rebates can help offset the cost of installing heat pumps and upgrading your circuit panel. Heat pumps are eligible for a 30% federal tax credit, up to $2,000 a year plus $600 a year for circuit panel upgrades. You can claim this credit over multiple years. Efficiency Maine also offers $4,000-$8,000 rebates depending on your income level which can be stacked on top of the tax credit.

The operational cost of heat pumps is also much lower than boilers and furnaces. According to Efficiency Maine, heating bills with heat pumps are about ½ the cost of heating with an oil or propane boiler! Check out Efficiency Maine’s Home Heating Costs calculator to estimate your annual heating costs with different heating systems, including heat pumps, wood stoves, natural gas, oil, propane, electric baseboards and more.

Electricity bills do increase when you switch to heat pumps, but there are special rate programs available for electric customers with above-average electricity usage—and it is still usually less expensive to heat with a heat pump than with oil, kerosene or propane. Or, to put it in numbers: “For every dollar your electric bill goes up, your oil/propane bill will likely go down by $2,” says Andy Meyer, Senior Program Manager at Efficiency Maine.

Special electricity rate programs from Central Maine Power and Versant Power

Central Maine Power’s Electric Technology Rate is available to all residential customers, and there is no limit to how many people can enroll. Households that use at least 800 kWh a month benefit the most from this program, which aims to help Mainers adopt electric technologies such as heat pumps, electric vehicles and EV charging. The Electric Technology Rate program offers a lower year-round delivery rate, but it has an increased monthly service charge over the standard rate. This plan provides the most savings with high electricity usage, such as from running heat pumps and charging an electric vehicle.

Central Maine Power also offers a Seasonal Heat Pump Rate program designed to offset higher winter heating costs through a significantly reduced kilowatt hour (kWh) delivery rate during November through April, and a higher one in the summer. Consider your electricity usage throughout the entire year: if you plan to use heat pumps for air conditioning or dehumidification in the summer, the Seasonal Heat Pump Rate could result in significantly more expensive summer electric bills.

The Seasonal Heat Pump Rate carries a higher monthly service charge, and unlike the standard service charge, the Seasonal Heat Pump rate does not include the first 50 kWh of use, though the first 750 kWh is free of sales tax. It is limited to the first 5,000 signups, and you must own or plan to install heat pumps to qualify.

Versant Power also offers a discounted residential heat pump rate called the Home Heating Eco Rate, which applies to both Maine Public District and the Bangor Hydro District. It is available to homes that use electric heat such as heat pumps and/or a heat pump water heater. To be eligible for the lower rate, 50% of the home’s electricity use must be attributed to use of a heat pump and/or heat pump water heater.

Both Versant and Central Maine Power have online calculators to help you determine the pros and cons for your household. Efficiency Maine also has calculators to compare your current usage against the CMP rates and the Versant Power rates for the Maine Public and Bangor Hydro Districts.

If you produce or plan to produce most of your own electricity with solar panels, you may find that the regular rate with the lower $21.55 service charge could total out lower.

Central Maine Power residential electricity rates

Effective January 1, 2024

	Standard Rate A	Electric Technology Rate	Seasonal Heat Pump Rate
Monthly service charge	$21.55	$37.71	$37.71
Summer kWh rate (May 1-October 31)	$0.085717 all months	$0.050736 all months (About 40% off Rate A)	$0.137508 (About 60% more expensive than Rate A)
Winter kWh rate (November 1-April 30)	$0.085717 all months	$0.085717 all months (About 40% off Rate A)	$0.004317 all months (About 95% off Rate A)

Calculate your Maine electricity bill with different rates:

Efficiency Maine: Central Maine Power Residential Rates calculator
Efficiency Maine: Versant Power Home Heating Eco Rate
- Maine Public District
- Bangor Hydro District
Central Maine Power: Electric Technology Rate
Central Maine Power: Seasonal Heat Pump Rate

How to select the right heat pump company for you

When is the best time of the year to contact a heat pump installer? Any time! Heat pump companies install and service units year-round.

A white man wearing a black hat and t-shirt services a wall-unit heat pump.

Here are a few questions to ask a heat pump company you’re considering hiring:

Does the warranty cover labor or just parts?
What training does the installation team receive, and how often?
Do you offer maintenance or service?
Will you perform all aspects of the proposed upgrade (plumbing, electrical, sheetrock, etc.)?
Do you use subcontractors?

Efficiency Maine also suggests asking prospective vendors how they plan to handle Efficiency Maine rebates and financing:

Will you handle all the paperwork needed to ensure that I get all the Efficiency Maine rebates possible?
Will you discount my bill by the Efficiency Maine rebate, or will the rebate come directly to me?
Will you help me apply for Efficiency Maine financing?

Be proactive about reaching out—you don’t want to wait until your existing heating system has died. It is a good idea to contact at least three companies to best compare quotes and timelines. Visit Efficiency Maine’s Registered Vendor Locator for a directory of certified heat pump installers in your area.

Green & Healthy Maine HOMES also has multiple resources to research heat pump companies. Visit our Green Homes Business Directory to find Maine experts that specialize in efficient and sustainable homes. Our annual Green Home + Energy Show in early April brings together the leaders in Maine and New England’s sustainable home and energy industries, including heat pumps, solar, electric vehicles, sustainable landscaping and more. Sign up for our newsletter to stay updated on future events.

Reach out now and get started on your path to enjoying year-round efficient comfort in your home!