October 3, 2013

Details still to be ironed out with new home heating rebate program from Efficiency Maine

By Tux Turkel tturkel@pressherald.com
Staff Writer

Efficiency Maine has launched a new rebate program to help homeowners reduce their winter heating costs, but most residents won’t be able to take advantage of some of the biggest benefits — at least for now.

The top rebate provides $5,000 to buy a wood pellet or geothermal central heating system. However, the number of rebates was capped at 50, and within days after the program began last month, all were snatched up by installers who had customers lined up.

The program also will give $250 to homeowners who buy new wood-burning stoves. But the stoves must be on an approved list from the Oregon Department of Energy, and most major brands sold in Maine don’t qualify yet.

Those are two examples of early growing pains in an effort by state government to help Mainers reduce heating costs and make their homes more energy-efficient. Efficiency Maine, an independent trust that promotes energy efficiency, wanted to start the program before the heating season began in earnest, but recognized that it will take time for some program rules, such as which wood stoves qualify, to be smoothed out.

Efficiency Maine says it’s likely to tweak the rules and rebates, as officials get a better feel for how Mainers are responding. Rather than launch an advertising campaign, the state is relying on stove dealers, heating contractors and insulation installers to become familiar with the program and get the word out to potential customers.

The Home Energy Savings Program is an outgrowth of a major energy bill passed this year in the Legislature. At the urging of Gov. Paul LePage, Efficiency Maine is shifting some of its focus from targeting electricity bills to helping homeowners cut heating costs. The average Maine home will burn about $3,000 worth of heating oil over the winter, and politicians pledged last year to do something to ease that burden.

The incentive money is coming from a share of revenue the state receives from a regional plan that cuts power-plant emissions. Officials expect $6.2 million to be available each year, for at least the next three years.

Subsidizing efficiency

When the shift was first proposed, simple arithmetic suggested that each home might receive a $600 rebate. Environmental groups and some Democrats in the Legislature said any money should be spent first on making homes more efficient and airtight, rather than just buying alternative heating equipment. LePage and many Republicans wanted to leave the decisions to homeowners.

Efficiency Maine spent this summer in public forums to gather feedback from equipment dealers, insulation contractors and other interested parties. In the end, it designed a program in which buying decisions are left largely to the marketplace.

At the same time, the program has strict requirements for what qualifies for a rebate. It deliberately funnels money in ways that prompt people to make insulation upgrades and buy heating systems that are above average.

“We’re not attempting to subsidize the cost of a new piece of equipment,” said Michael Stoddard, Efficiency Maine’s executive director. “Our goal is to subsidize the difference between high efficiency and an ordinary unit.”

The program also is seeking a balance, with rebates that are enough to encourage best practices but are not too generous. “We don’t want to pay people money for something that they are going to do anyway,” Stoddard said.

For instance, the $5,000 rebates for pellet boilers and geothermal heat pumps apply only to whole-house, central heating systems. The program was capped at 50 a year, and installations must be done within 120 days.

To arrive at its rules, Efficiency Maine reviewed a similar program in New Hampshire and gauged the demand from vendors who said they had interested customers. Automated pellet boilers cost about $15,000, installed, and geothermal heat pumps can run $30,000, installed, before federal tax credits, according to Efficiency Maine.

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