Given Maine’s cold climate, its large number of older homes and over-reliance on home heating oil, converting to heat pumps and solar panels for home heating is an important strategy to reduce greenhouse gas emissions as well as significantly reduce residential electricity cost. Other home energy efficiency strategies such as increasing insulation and replacing older windows and outside doors are also effective.

But these strategies, while cost-effective in the long run, are expensive investments. That is why continuing both state and federal financial incentives is so critical.

Using our own Cape Elizabeth home as an example, we are considering the installation of a rooftop solar system to defray the cost of home heating and cooling with heat pumps. Taking advantage of the federal 30% tax credit, we estimate a 12-year payback period — after 12 years our initial investment is “paid for” with electrical utility cost savings.

But, if the 30% federal tax credit were eliminated, the payback period for the solar system would be extended five additional years, to 17. Many people, including me, would be hesitant to install a solar array given a payback period that long, even though there would be significant immediate electrical utility bill reductions.

Net metering is also critical to the success of a home solar system. Obviously, a home that is heated with electricity in Maine experiences the highest electric utility bills in winter. With a home solar system and net metering, substantial energy is produced in the spring, summer and early fall months above that required by the home’s electricity needs. This “extra” energy is sent to the electrical grid and that excess energy is banked as credits that are used to reduce energy billing in the winter.

For example, the prior home we owned produced about 90% of the annual electricity needs for the home through its solar system. We banked enough electricity credits during the summer months to cover our electrical consumption through most of the winter.

But without net billing there would be little incentive to install home solar. All of the excess energy produced during warmer months would be lost by the homeowner to the grid, leaving no credits to be used to reduce utility expenses during the winter months. The only way “keep” all electricity produced by the home solar system would be to add a very expensive home battery system to store excess electricity, but the cost would be prohibitive.

There is legislation pending before the Maine State Legislature to eliminate or change net billing. Critics claim that net energy billing is the reason Mainers face such high electricity costs, but it’s not correct. The policy contributes about 4% to our electric bills, a mere fraction in comparison to the 50-60% that goes to pay for volatile natural gas on the regional market.

Net energy billing has also demonstrated greater benefits than costs for ratepayers, providing almost $30 million more in benefits than costs. If any change is enacted, the interests of homeowners who have or are considering solar system installation must be protected. Net energy billing has also demonstrated greater benefits than costs for ratepayers, providing almost $30 million more in benefits than costs.

I encourage homeowners to consider the various options that are available to make their homes more energy-efficient and to reduce greenhouse gas emissions. (Efficiency Maine’s website is an excellent source of information about the various financial
incentives that are available.)

I also encourage our members of Congress and the Maine Legislature to preserve current financial incentives to implement these strategies.