Governor Mills Announces $43 Million in New Funding to Support Installation of Heat Pump Water Heaters

Rebates of over $1,000 for heat pump water heaters will help save Maine households hundreds annually on electric bills

Governor Janet Mills today announced $43 million in new Federal funding for Maine to support the installation of high-efficiency heat pump water heaters, which can reduce energy bills by hundreds of dollars annually for Maine households.

The funding is through the New England Heat Pump Accelerator, a collaborative multi-state initiative supported by a Federal grant to rapidly increase the adoption of heat pump technology across the region. The Accelerator is led by the Connecticut Department of Energy and Environmental Protection in collaboration with energy officials in Maine, Massachusetts, New Hampshire, and Rhode Island.

Incentives funded by the Accelerator are now available for eligible households through Efficiency Maine rebates of over $1,000, which is provided as an instant discount on heat pump water heater purchases at participating Maine distributors and retailers.

More than 70,000 heat pump water heaters have been installed in Maine since 2018; the goal of the Accelerator funding is an additional 30,000. Water heating accounts for about 18 percent of a home's energy use, making it the second largest energy expense for most households after heating. A heat pump water heater uses less than half the electricity as a standard electric resistance water heater and can reduce electric bills by as much as $650 annually.

In addition to lowering household energy costs, energy efficiency investments support a growing clean energy workforce in Maine. In its latest report on Maine's clean energy industry, the Department of Energy Resources found the sector supported more than 16,000 jobs in 2024, of which 60 percent are energy efficiency roles, and contributed $3 billion to the state's economy.

"Maine families know every dollar counts, and heat pump water heaters can save hundreds of them every year," said Governor Janet Mills. "With this new funding, we will help even more households lower their energy bills, cut their reliance on expensive fossil fuels, and stay comfortable in their homes. This investment also means good-paying jobs for plumbers, electricians, and businesses doing the work right here in our state."

"Heat pump water heaters are one of the most powerful tools we have to cut energy costs right now -- and over the long term," said Dan Burgess, Acting Commissioner of the Maine Department of Energy Resources. By making this technology accessible to tens of thousands of households across the state, we're putting real money back in people's pockets, reducing our dependence on costly and unpredictable fossil fuels, and building a stronger, more resilient energy future for Maine."

"As we approach the end of the heating season, now is a good time for homeowners and landlords to make a plan for replacing old boilers and water heaters nearing the end of their product life," said Michael Stoddard, Executive Director at Efficiency Maine. "A good first step is to check out the Efficiency Maine website where you will find helpful information about high-efficiency heating systems, rebates and a list of participating contractors who can assist you in dramatically reducing your exposure to imported fuel prices."

Under the Governor's leadership, Maine's reliance on home heating oil has fallen sharply, dropping nearly 20 percent between 2018 and 2024 -- the lowest in decades --driven by expanded access to cost-saving, energy efficient heat pumps for heating and cooling.

In 2023, Maine exceeded the Governor's goal of installing 100,000 heat pumps two years early and set a new target of 275,000 heat pumps installed by 2027. The number of heat pumps installed in Maine has doubled in the past three years to surpass 200,000.

Earlier this week, Governor Mills also signed LD 1949, a bill that would require the Maine Public Utilities Commission to consider affordability when setting new electricity rates and measure the impact of electricity bills on total household energy costs.

Recently, Efficiency Maine announced an added incentive of $500 for eligible households to install heat pumps, which is now available through the end of the year.

Today's announcement complements existing efforts to help households invest in energy efficient technology, such as Maine's Home Energy Rebates program, which launched in 2024 with $36 million in Federal funding. The program is now helping income-eligible residents in multifamily and manufactured homes upgrade to heat pumps and cut their energy bills. Since launch, the program has committed funds to help outfit more than 700 homes with heat pumps.

For more information about heat pump water heater rebates, or other energy efficiency incentives and programs, visit efficiencymaine.com.

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About the New England Heat Pump Accelerator

The New England Heat Pump Accelerator works with distributors, contractors, policymakers, program administrators, and community organizations to bring efficient, affordable heating and cooling to the region. Through December 2029, the program will expand heat pump adoption in homes across Connecticut, Maine, Massachusetts, New Hampshire, and Rhode Island through market growth, local innovation, and educational resources. For more information, visit nehpa.org