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Get a Free QuoteThe federal 25C tax credit is gone. But Maine has some of the best heat pump financing in the country. Efficiency Maine PACE loans start at 0% APR. Income-eligible households can have up to 80% of costs covered. Here is every option, compared honestly.
The Section 25C energy efficiency tax credit was eliminated by the OBBBA. In 2026, Maine homeowners who install heat pumps receive $0 from the federal government for 25C. Any contractor advertising a "$2,000 federal heat pump credit" is wrong. The only federal incentive path remaining is through third-party ownership structures (like Propel) accessing Section 48E — but that applies primarily to solar, not standalone heat pump installations.
The good news: Efficiency Maine state rebates ($1,000–$3,000 per unit) and PACE loan financing (0–4.99% APR) remain fully funded and active in 2026. Maine's state programs are among the best in the nation.
From 0% APR state loans to cash purchase. Each option has trade-offs — here is the honest breakdown for Maine homeowners in 2026.
Most Maine homeowners — best rates by far
APR
0–4.99%
Term
5–15 yr
Loan Range
$500–$15,000
Down Payment
$0
Min Credit
~640
Solar + HP bundles, or when PACE loan is maxed
APR
9.69%
Term
25 yr
Loan Range
$10K–$135K
Down Payment
$0
Min Credit
660
Quick financing when PACE unavailable
APR
6–12%
Term
3–7 yr
Loan Range
$5K–$50K
Down Payment
$0
Min Credit
660–680
Homeowners with significant equity
APR
7–9% variable
Term
10–20 yr
Loan Range
Equity-based
Down Payment
$0
Min Credit
680+
Homeowners with available funds
APR
N/A
Term
N/A
Loan Range
Full cost
Down Payment
Full cost
Min Credit
N/A
For most Maine homeowners, the Efficiency Maine Home Energy Loan (PACE) is the clear winner. Here is why — and how to qualify.
Contact Efficiency Maine
Call 866-376-2463 or visit efficiencymaine.com. Discuss your project scope and get income pre-qualification.
Choose a registered contractor
Must use an Efficiency Maine registered heat pump installer. This ensures quality and rebate eligibility.
Get quotes and apply
Contractor submits project details and loan application through Efficiency Maine portal.
Installation and inspection
Contractor installs heat pump(s). Efficiency Maine may inspect the installation.
Rebate applied at point of sale
$1,000-$3,000 per unit rebate is deducted from invoice. PACE loan covers remaining balance.
APR Range
0–4.99%
Loan Amount
$500–$15,000
Term
5–15 years
Down Payment
$0
Repayment
Property tax or direct
Bundling
HP + insulation OK
One of the biggest advantages of the PACE loan: you can bundle heat pump installation with insulation, air sealing, and weatherization under a single loan. This is smart in Maine, where many older homes lose 30-40% of heating energy through poor insulation. A combined project (heat pump + attic insulation) may qualify for enhanced loan terms.
Maine's income-eligible heat pump programs are among the most generous in the country. If you qualify, the financial barrier to switching from oil or propane is essentially eliminated.
| Income Tier | Rebate/Unit | Max Rebate | Loan Rate | % of Cost Covered |
|---|---|---|---|---|
| Standard (Any Income) | $1,000 | $3,000 (3 units) | 4.99% APR | 15–25% |
| Moderate Income (80–150% AMI) | $2,000 | $6,000 (3 units) | 2.99% APR | 35–50% |
| Low Income (Below 80% AMI) | $3,000 | $9,000 (3 units) | 0% APR | 60–80% |
For a household below 80% AMI installing two mini-split heat pumps (total cost ~$10,000):
Total project cost
$10,000
Efficiency Maine rebate (2 units)
-$6,000
Weatherization match
-$2,000
Your cost (PACE at 0%)
$2,000
The remaining $2,000 financed at 0% APR over 10 years = ~$17/month. Meanwhile, you are saving $150-$250/month on heating oil. That is net positive from day one. Contact Efficiency Maine at 866-376-2463 for income verification.
Propel is designed for larger projects — especially solar + heat pump bundles — where the PACE loan's $15K limit falls short. Available in Maine and Texas only.
Solar + heat pump bundle
Combining a 9 kW solar system ($27K) with 3-zone heat pump ($15K) exceeds PACE limits. Propel covers the full $42K.
Lower monthly payments
The 25-year term keeps payments low. A $42K solar+HP bundle = ~$340/month vs. $500+ on a 15-year PACE loan.
FEOC compliance
Propel requires Silfab panels (FEOC-compliant), which qualifies for the 10% domestic content bonus on the Section 48E ITC for the solar portion.
Lower credit threshold
Propel accepts 660 FICO. PACE may require 640+ but with stricter income verification. For some borrowers, Propel is easier to qualify for.
APR
0–4.99%
9.69%
Max loan
$15,000
$135,000
Term
5–15 yr
25 yr
Dealer fee
None
None
Down payment
$0
$0
Min FICO
~640
660
Solar bundling
Limited
Designed for it
ITC access
No
Yes (Sec 48E for solar)
Bottom line: Use PACE for standalone heat pump projects under $15K. Use Propel for solar+HP bundles or larger projects where PACE falls short.
These are general-purpose financing tools, not energy-specific. They work, but they cost more than Efficiency Maine programs. Use them only if PACE and Propel do not fit your situation.
A Home Equity Line of Credit uses your home equity as collateral. Current rates in Maine are 7-9% variable APR. The interest may be tax-deductible if used for home improvement (consult your tax advisor).
When a HELOC makes sense:
Warning: HELOC rates are variable. Your payments can increase if rates rise.
Unsecured personal loans for energy improvements run 6-12% APR with 3-7 year terms. Approval is fast (1-3 days) and no collateral is required. But shorter terms mean higher monthly payments.
When a personal loan makes sense:
Honest take: For most Maine heat pump projects, the Efficiency Maine PACE loan at 0-4.99% APR is simply a better deal than any personal loan.
60% of Maine homes heat with oil — the highest rate in the U.S. At $3.82/gallon, the average Maine household spends $3,050/year on heating oil. Here is how heat pump financing compares to staying on oil.
2-zone mini-split, $7K after rebate, 10yr
Solar + HP bundle $42K, 25yr, offsets oil + electric
3-zone, $12K after rebate. Payback: 4 years
Every financing option produces net positive monthly savings vs. oil at $3.82/gal.
The question is not whether to switch — it is which financing path saves you the most.
Get a personalized quote showing your Efficiency Maine rebate, PACE loan payment, and estimated oil savings. No commitment required.
Complete rebate guide: $1K-$3K per unit
What heat pumps cost in Maine today
Up to 80% of costs covered
Combine solar and HP for max savings
Which utility is better for HPs
What to look for in Maine