Abrupt end to tax credits brings turbulence to Maine’s heat pump and solar industries

by Cameron Levasseur 9 hours ago

EXCERPTS

As part of the Republican Party’s sweeping domestic policy bill signed into law on July 4, federal tax credits of 30 percent for residential clean energy improvements will end on Dec. 31, instead of lasting through the 2030s as they were previously intended to.

That means in less than six months, customers of the North Yarmouth-based solar company could pay thousands more for installation — with the average price range jumping from roughly $15,000 to $20,000 now, to between $21,000 and $28,000 without the credits.

And it’s not the only cost credit delivered by the 2022 Inflation Reduction Act for home efficiency upgrades that’s now going away.

Another program getting cut is the Energy Efficient Home Improvement Tax Credit, which offers a 30 percent credit up to $2,000 for qualified heat pumps and an additional $1,200 for certain energy efficient home improvements.

On Dec. 31, it too will be eliminated.

But other Inflation Reduction Act funding for heat pumps remains. Maine was allocated nearly $72 million in 2024 as part of a $450 million grant from the Environmental Protection Agency funded under the legislation to support residential heat pump installation in New England states.

The funding is distributed as rebates by the quasi-state agency Efficiency Maine. Payments can be as high as $3,000 for each heat pump unit for a low income household, with a lifetime limit of $9,000. For a moderate income household, rebates can reach $2,000 per unit with a lifetime limit of $6,000.

“The loss of certain federal tax credits increases the overall payback period on investments in energy efficiency measures,” Stoddard said. “That said, Mainers have always proved to be savvy consumers when it comes to energy. If they see that they can save money over time by insulating their home, installing heat pumps or switching to EVs, and there are state-based incentives available to help, Maine consumers are smart about making those investments regardless of whether there are federal tax credits in place.”

Dan Burgess, director of the Maine Governor’s Energy Office, said in a statement that the office is “reviewing the federal law and working to understand the full scope of potential impacts to Maine.”

“This bill is widely expected to lead to increased energy costs for Maine people and businesses by slowing our transition to affordable, reliable renewable energy,” Burgess said. “It will also create significant uncertainty within Maine’s burgeoning clean energy economy, which is supporting thousands of good-paying jobs across the state, reducing energy costs for homeowners through heat pumps and weatherization investments, and reducing our state’s reliance on fossil fuels.”

https://www.bangordailynews.com/2025/07/17/business/business-energy...

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