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.

Vendors learned of the program rules on Sept. 11, Stoddard said, and had made reservations for the 50 homes within a week. Most of the jobs are for pellet boilers.

For wood and pellet stoves, Efficiency Maine is offering $250 rebates. The stoves must meet federal specifications and be installed with makeup air ducted from outside. The wood stoves must have at least enough efficiency to be on Oregon’s list of premium stoves. Maine didn’t want to start a stove certification program because Oregon already has an established one; but as of now, only 11 stoves are listed. Stoddard said the list is expected to grow to 200 this winter.

“People are going to have to be a little patient,” he said. “Not everything is going to get done between now and the first of the year.”

Dealer discontent

Don McClure is being patient. He works in the stove department at Damariscotta Hardware and sells two popular wood stove brands, Harman and Regency. Neither is on Oregon’s list now.

Stove dealers are promoting their products with help from a $300 federal tax credit that’s due to expire at the end of this year. Adding the $250 rebate would be helpful, McClure said, but it’s not a deal breaker. Still, he’s eager to promote the Efficiency Maine rebate, when the details are worked out.

The highest rebate for a supplemental heating system is $500, for an air-source ductless heat pump. The high-efficiency electric units provide both heat and air conditioning. They sometimes are called “mini-splits” because of their two-piece, through-the-wall configuration.

At the public forums, a mini-split distributor said sales had “exploded,” and predicted that installations will double each year in Maine for the next decade. More than 3,000 were sold last year.

That market response led vendors of some other heat sources to ask why the state should provide any incentives.

“Why are they subsidizing those? They sell themselves,” said Bill Bell, executive director of the Maine Pellet Fuels Association.

Bell’s group would have liked to see more money set aside for what he calls the “pent-up demand” for pellet boilers. Pellet heat from locally harvested wood has the added benefit of keeping money in Maine that otherwise would leave the country to pay for oil, he said.

At the same time, Bell said he recognizes that Efficiency Maine didn’t want large sums of money going to one sector.

Stoddard, with Efficiency Maine, replied that despite the growing popularity of mini-splits, the experience with an incentive program last year run by Bangor Hydro-Electric Co. suggests that taking $500 off the $3,000 or so cost of a basic unit can bring an affordable heating alternative within reach of many Mainers.

“That seemed to be what it took to make people move,” he said.

No thermal storage rebate

Omitted from the program is a chief competitor of the mini-split: thermal storage heaters. The units, sold through vendors including Thermal Energy Storage of Maine, use cheaper electricity at night to store heat in ceramic bricks. They are eligible for a rebate program through Central Maine Power Co., ranging from $1,500 for space heaters to $4,500 for a whole-house heating system.

Efficiency Maine also has various incentives for insulating and air-sealing a home. They range from $400 to $1,500.

Bob Howe, executive director of the Maine Association of Building Efficiency Professionals, said his members wanted homes at least to meet minimum thermal standards before they could qualify for heating rebates.

“We shouldn’t be giving incentives for heat pumps, for example, in old, leaky houses,” he said.

Howe also said it’s important for cracks and gaps to be sealed in a home before it’s insulated, especially with fiberglass or cellulose. Otherwise, the insulation won’t be very effective. “It’s going to be up to the contractors to point this out to people,” he said.

Efficiency Maine has set conditions that are aimed at best practices. For instance, the $400 rebate for air sealing requires an assessment from a certified energy auditor, and a $200 co-pay from the customer.

A certified audit also is required for the $500 insulation rebate, along with technical standards for filling attics, walls and basements.

Professional assessments also are required on two energy upgrade “paths.” Along what’s called a custom path, homeowners can receive as much as $1,500 in rebates for projects that reduce energy use by 40 percent or more. In a typical home heated by oil that costs $3.69 a gallon, those savings could be $1,300 a year, Efficiency Maine estimates.

A second path provides a menu of options with varying rebates for both energy upgrades and heating systems, capped now at $1,500.

The current incentive design will help officials decide whether to shift more money to one facet of the program or raise or lower the rebate level, said Patrick Woodcock, the governor’s energy director.

Woodcock, a member of the Efficiency Maine board, said this is the first time Maine has been able to use state money, rather than federal funds, to set up a long-range plan to help lower heating costs. “It’s a good starting point for a new program,” he said.