For about 20 years, Americans interested in improving energy efficiency in their homes could lean on a federal income tax break to help pay for insulation, new windows, and other improvements.
That benefit was eliminated as part of President Donald Trump's "One Big Beautiful Bill Act" tax and spending law passed by Congressional Republicans over the summer. The tax breaks end at the beginning of 2026.
Elise Brown, executive vice president at Evergreen Home Performance said it's a shame that energy efficiency was politicized. Evergreen performs energy audits and weatherizes homes in the midcoast and Portland areas.
"Most People call us because they're cold, because their fuel bills are too high, or their electrical bills are too high and they're really looking for help so they can remain in their homes," Brown said.
Now Brown and other vendors are working hard to explain to confused consumers that even though the tax break is gone, there's still state money available to help with projects.
The Energy Efficient Home Improvement Credit provided a $1,200 income tax benefit for certain upgrades, and that helped to defray homeowners costs, Brown said. But Efficiency Maine offers bigger rebates of up to $8,000 for insulation, she added.
The problem is that many prospective customers believe that changes to federal law eliminated all incentives, according to Brown.
"That has a real impact on us," Brown said. "That means we're doing a lot to communicate with the public about the fact that Efficiency Maine rebates are alive and well."
The Internal Revenue Service provided about $21 million in home improvement tax credits to about 18,000 Mainers in 2023, according to the Building Performance Association trade group.
Association senior policy advisor Skip Wiltshire-Gordon said the industry employs 9,500 Maine workers. And if the loss of the tax breaks hurts home performance firms, it could have downstream effects on suppliers and other companies involved in the business.
"It is going to be a challenge, because this was a tax credit that folks in Maine were using, and they were using it a lot," Wiltshire-Gordon said. "So that's a challenge to the home performance contractors, that they won't have that kind of incentive that they can offer."
About a third of Maine's greenhouse gas pollution comes from heating homes and buildings. To change that, the state's climate plan calls to weatherize tens of thousands of homes to lower energy use. The plan also calls to install 275,000 high-efficiency heat pumps to get homeowners off heating oil and other fossil fuels.
Tim Adams, owner of Norway-based heat pump installer Ecoheat, said although state rebates up to $9,000 are still available for heat pump installs, other changes in the market could make it a down year for his industry.
Soaring electric bills have made some customers wary about the cost of running electric heat pumps when oil is comparatively cheaper. But Adams said a federal mandate to use a less refrigerant in new units is causing a production backlog and increasing costs.
"We've seen a significant spike in all our supplies, probably averaging at least 15% and probably closer to 30% in our costs," Adams said. "At the same time, the tax credits are going away."
Efficiency Maine Executive Director Michael Stoddard acknowledged that policy changes and customer confusion could blunt momentum in the campaign to make more homes energy efficient.
"We're already seeing it. You know we're getting fewer calls coming into us, we're processing fewer rebates in the last month or two, so it absolutely has an effect," Stoddard said.
His agency is still processing thousands of rebate applications, Stoddard said. It will take some time before it becomes clear whether the slowdown is a blip, or if Efficiency Maine needs to change its marketing strategy to remind the public about available state rebates.
"Maine is continuing to do as well or better than any other state in the country when it comes to these kinds of home improvements and business improvements," Stoddard said.
"So I'm still pretty optimistic that we're going to see a lot of activity."
