Federal Tax Credits Expired. Here Is What Maine Still Offers in 2026

Editor's note (October 2026): Efficiency Maine changed its insulation and air sealing rebates for work completed on or after October 1, 2026. They are now a fixed amount per zone of the house (attic, walls, basement) instead of a percentage of project cost, and the Efficiency Maine rebate figures in this article are current as of October 2026. The federal 25C tax credits referenced in this article expired December 31, 2025 and are only available for qualifying work completed before that date, so any credit amounts below reflect the period when the credit was available. Amounts depend on household income and project scope. See current Efficiency Maine rebates and what has changed with the federal credits.

A homeowner in Scarborough called us last month asking if it was "too late" to get rebates on insulation. She had read that the federal energy tax credits expired and assumed everything was gone. It is not. The federal 25C credit ended, but the state programs that cover the largest portion of most projects are fully funded and available right now.

Here is exactly what changed, what did not, and what Maine homeowners can get in 2026.

What Expired: The Federal 25C Tax Credit

The Energy Efficient Home Improvement Credit (Section 25C) expired on December 31, 2025. This was the federal program that offered:

• Up to $1,200 per year for insulation, air sealing, and energy assessments (30% of costs)
• Up to $2,000 per year for heat pumps and heat pump water heaters (30% of costs)

If you completed a project in 2025, you can still claim the credit on your 2025 tax return. But for any work done in 2026 or later, these credits are no longer available.

Congress could extend or replace these credits in future legislation, but as of March 2026, there is no active proposal with a timeline.

What Did Not Change: Efficiency Maine Rebates

This is the part most people miss. Efficiency Maine rebates are funded by the Regional Greenhouse Gas Initiative (RGGI) and utility surcharges. They are state-funded, not federal. The expiration of the 25C credit has zero effect on these programs.

For most Maine homeowners, the Efficiency Maine rebates cover a larger share of project costs than the federal credits ever did.

Insulation and Air Sealing Rebates

Insulation rebates are based on household income. Since October 1, 2026, Efficiency Maine pays a fixed dollar amount per zone of the house (attic, walls, or basement) instead of a percentage of project cost. You can claim one insulation rebate and one air sealing rebate per zone.

The lifetime limit is $8,600 per home for all income tiers and $5,600 per mobile home. Moderate income means adjusted gross income up to $70,000 for individual filers or $100,000 for joint filers.

These rebates require a BPI-certified assessment and work performed by an Efficiency Maine Residential Registered Vendor. Horizon Homes has been an Efficiency Maine Top-Rated Vendor for 10+ years.

Heat Pump Rebates

Cold-climate heat pump rebates are also income-tiered:

The rebate is paid per outdoor unit, so your total depends on how many outdoor units your home needs.

Heat Pump Water Heater Rebate

Efficiency Maine offers a $1,150 mail-in rebate on heat pump water heaters, with no income tier attached. This is one of the simplest rebates to qualify for and applies to most homes with an existing electric water heater.

The Heat Pump Bonus

Here is one most people do not know about: Efficiency Maine offers an additional $500 per housing unit for eligible whole-home heat pump upgrades completed, and rebate claims emailed or postmarked, between March 1 and December 31, 2026. The bonus is on top of the standard heat pump rebate, no insulation required to qualify, though we recommend doing both.

How the Numbers Stack Up

Let's look at a real scenario. A three-bedroom Cape Cod in South Portland with inadequate attic insulation, no basement insulation, and an aging oil boiler.

Project scope:

• Attic and basement insulation (blown-in cellulose) plus air sealing
• Two cold-climate heat pump indoor units with one outdoor unit
• Heat pump water heater

Before rebates (estimated): $18,000 - $22,000

Rebate line items (standard income tier), assuming a large attic zone and a large basement zone:

• Attic insulation, large zone: $2,000
• Basement insulation, large zone: $2,000
• Attic air sealing: $150
• Basement air sealing: $100
• Heat pump, one outdoor unit: $1,000
• Heat pump water heater: $1,150
• Heat pump bonus: $500

At the moderate income tier, the same line items are $3,000 and $3,000 for the two large zones, $225 and $150 for air sealing, and $2,000 for the outdoor unit. The water heater rebate and the bonus stay the same.

Totals vary by home, so we do not add these into one number here. Your zone sizes, income tier, and the equipment you choose set your actual net cost, and your free assessment is where we work it out.

And that is before financing. The Efficiency Maine Green Bank offers loans starting at 0% APR (1-year bridge loan) or 5.99% for 5 years, with no lien on your home.

Schedule a free energy assessment and we will walk through your home, identify the improvements that make the biggest difference, and show you exactly what rebates apply to your situation.

How We Handle Rebates Differently

Most contractors bill you the full project cost and leave you to file the rebate paperwork yourself. Then you wait four to six weeks for a reimbursement check.

We do it differently. We manage the Efficiency Maine rebate process and apply the amounts directly to your invoice. You never pay the full price and wait for a check. The rebate is reflected in what you owe from day one.

This is a meaningful difference on a $15,000 project. Nobody wants to float thousands of dollars while waiting for a reimbursement that may take a month or more.

What About the HOMES and HEAR Federal Rebate Programs?

You may have heard about the IRA's HOMES and HEAR rebate programs (sometimes called "point of sale" rebates). These are separate from the 25C tax credits and are being administered differently in each state.

In Maine, the HEAR program is available only for mobile/manufactured homes and affordable multifamily housing. Standard single-family homeowners are not eligible for HEAR.

The HOMES rebate program status varies. As of March 2026, Efficiency Maine's existing programs remain the primary and most reliable pathway for single-family homeowners in Maine. We recommend focusing on the programs that are available today rather than waiting for federal programs that may or may not launch in your area.

The Bottom Line for 2026

The federal credit is gone. That is real. But for Maine homeowners, the math still works, and in many cases works better than it did with the federal credit alone.

Here is the maximum for each program if you qualify at the lowest income tier:

Each program pays separately, and your total depends on your income tier, which zones you insulate, and how many outdoor units you install. At the standard (any income) tier the insulation rebate is $1,000 or $2,000 per zone and the heat pump rebate is $1,000 per outdoor unit.

The programs are funded. The money is available. The question is whether you act while contractor schedules are open or wait until everyone else calls in September.

Get Your Personalized Rebate Estimate

Every home is different. Rebate amounts depend on your income, your home's current condition, and the scope of work. For the full income tier breakdown and current rebate amounts, see our Efficiency Maine rebates guide. The fastest way to find out what applies to your situation is a free energy assessment.

We will walk through your home, identify the highest-impact improvements, and give you a clear estimate showing your costs before and after rebates.

Schedule your free energy assessment and see what your home qualifies for. Or call us at (207) 221-3221.