Maine Solar Incentives: Net Metering Options, Rebate, Solar Tax Credits Maine

For the average resident, investment in one of these projects, or in a personal residential project will be the best way to make a profit and benefit the environment with solar power.

Most of the savings, which will come from the federal solar investment tax credit, available throughout the US, can be used to immediately decrease the cost of installing a solar panel system for your home.

Other programs such as Net Energy Billing (also called ‘net metering), renewable energy credits, state financing options and other options allow residents to reduce their energy consumption costs for many years to come.

This complete guide explains how Maine solar incentives work and provides the available ways to reduce the cost of solar panels in Maine for homeowners and businesses.

Solar Power Technology (Solar Panels Maine)

When speaking of “solar power” there are PV or photovoltaic systems which are the most common type seen on rooftops or large solar farms.

PV systems convert sunlight directly into AC electricity.|

The other type of system is CSP or concentrated solar power. In this type, reflective surfaces such as mirrors or lenses focus sunlight which heats water to generate steam which drives an electric turbine.

In this way it is similar to how nuclear fission reactors produce electricity, except concentrated light is used to produce the initial heat, instead of a fission reaction.

PV technology is the kind that will be used in almost every residential rooftop solar system or community solar project. These systems are extremely safe, well developed from a technological perspective, and can be beneficial both to the environment, and your wallet.

Maine Solar Incentives

Solar incentives vary by state, but by far the best of the Maine solar incentives to reduce the cost of solar panels in Maine will be the federal solar tax credit.

It is available to the entire US. The incentive structure or solar stimulus program at the state level is not robust, although some additional options will be reviewed below.

Maine Community Solar

This program is basically designed to give Maine residents the benefit of having their own solar panels, while getting to choose their level of investment, and not having to place panels on their own property. Usually, having a solar system means that you invest thousands of dollars into your own system, and that system produces electricity, some of which goes to your home, and some of which goes to the utility grid, offsetting your electrical bills and saving you money over time.

With Maine community solar, an individual basically invests in a Maine solar farm, for example, Solar Gardens Maine (although there are many others).

The solar farm sends electricity to the grid, and the individual receives credits on their electrical bill commensurate with their investment in the farm.

It is an excellent option for those who want to save money and invest in green energy, but cannot pay for solar panels upfront or cannot have them installed on their property. For example, many renters prefer this option.

Here is more information on Maine Community Solar.⁵

Federal Solar Tax Credit

In the United States, the most significant federal solar incentive is the federal solar tax credit. It is also commonly called the Solar investment tax credit (ITC), however, the ITC refers to a larger program that is offered to businesses, etc, so for the purpose of clarity the term Federal Tax Credit will be used.

Basically, the policy allows those who install and utilize solar power on their residence to deduct 30 percent of the associated cost from their federal taxes. So for example, if you were to spend $15,000 installing a solar system for your residence, you could claim a $4,500 deduction in federal income tax for the year in which the installation is completed.

It should be noted that this percentage is for systems installed between 2022 and 2032. The credit amount is programmed to drop to 26% for systems installed in 2033, and to 22% for those installed in 2034.

The tax credit is set to expire completely in 2035, however, it is likely the US Congress will vote to renew it. The great thing about the Federal Tax Credit is that there is no limit to the dollar amount of credit that can be claimed.

And, the credit allows you to include certain costs, such as the materials needed to install the panels, installation costs, and approved storage systems (batteries).

None of the information here should be financial advice. Interested parties should consult the IRS or professional consultation.^4,6

To take the ITC in Maine, complete IRS Form 5695 with your standard Form 1040.¹²

How Does the Tax Credit Work if I Don’t Owe Taxes?

You might be wondering, ‘how does the solar tax credit work if i don’t owe taxes?’ or if the amount of income tax you owe would be smaller than 30% of the cost of your solar system installation.

Well unfortunately the tax credit is considered non-refundable. This means that you will not get paid any money if the deduction would bring you into ‘negative taxes.’

However, the good news is that any amount of the credit which is unused can be applied to income tax for the next year.

Are You Eligible for the Solar Tax Credit?

To be eligible for the federal solar tax credit, your new solar system should be installed at your USA property residence within the year at the end of which you will claim the tax deduction.

Ownership of the system is another issue. Obviously buying outright in cash is the best and probably most common option.

Those who used loans or various financing to buy the system are also usually eligible.

Do Power Purchasing Agreements Qualify for the Solar Tax Credit?

Power Purchasing Agreements (PPA) by which solar installers install systems for free and charge their clients per unit of electricity generated are usually disqualified from Federal Tax Credit eligibility.

Although most residential systems are installed by homeowners, it is also possible to obtain a tax credit for a shared system you invested in.

For example, some tenants at apartments or co-ops can claim credit for a system on or for their building to which they contributed financially. The system does not even have to be connected to an electrical grid or installed on a roof.

In general, if you own a PV system and it generates electricity for residential use, you should be eligible.

What Is Maine Solar Tax Credit?

The state of Maine itself does not offer its own tax credit. However all Maine residents, as US residents, are entitled to the Federal Tax Credit outlined above.

It allows someone who has installed solar power at their residence to deduct a percentage of the cost from their income tax for that year (and additional years if the credit is greater than the amount of taxes owed).

Cost of Solar Panels in Maine: Which Expenses Can Be Credited?

Theoretically, any/all expenses associated with the installation of your PV solar system can be claimed.

The lions’ share of these will be the costs of the equipment (panels, inverters, mounting, batteries for off-grid) and the price paid to the installation company.

Construction costs and inspection fees are also eligible.

Maine Solar Rebates (Grants for Solar Panels)

Maine has a Home Energy Loan program which is basically a subsidized loan for solar panel installation.⁷

To qualify, applicants must be residents of the state of Maine, and fit financial qualifications such as credit scores and debt-to-income ratios, although this depends on the exact loan the applicant is seeking.

Solar applicants should not have recorded frequent bankruptcy, foreclosure, or repossession. Qualifying applicants can receive a loan of up to $15,000 for up to fifteen years with a fixed interest rate.

Maine also offers a Renewable Energy Investment Exemption. This is basically a property tax exemption.

Since solar energy systems increase the value of the property on which they are installed, this policy exempts the owner from paying the tax increase commensurate with the property value increase.

Net Energy Billing (Maine Net Metering)

‘Net metering’ is the general method by which grid-tied solar systems can send excess energy back to the grid and accumulate credits which are automatically applied to offset the cost of energy they consume from the grid.

In other words, you send the grid your excess electricity, and in return get free grid electricity when you need it. This benefits both the customer and the utility company.

You get energy credits for passive generation, and they receive relatively cheap, green energy in their system. Most solar-equipped homes in the Atlantic Northeast can produce excess energy in the summer and a deficit in the winter.

Maine Peak Sun Hours by County

So during the summer, you will likely accrue a surplus on the meter which will be depleted in summer.

The metering is conducted automatically by your local utility company.

Over the lifetime of your solar panel system, you can expect to save tens of thousands of dollars by offsetting the need for grid electricity.

You may be wondering, what if the value of electricity I send to the grid is greater than the value I need from the grid? Your credits roll over month to month and expire at the end of the year.

An average residential solar system in Maine is unlikely to produce an annual surplus.

There are technically two programs under NEB: the kWh Credit Program and the Tariff Rate Program.

The kWh credit program is available to all electric utility customers. It provides credits in the manner described above to renewable generator projects less than five megawatts in size.

It applies to a resident’s own project or to Maine Community Solar projects.

The Tariff Rate Program is for non-residential Maine customers. It still supports renewable generators under 5 megawatts in size and still applies to own or shared products with other non-residential customers.

Here is a guide on Maine net energy billing.⁸

Solar Panels: Maine Solar Incentives

One common question in the Atlantic Northeast is, are solar panels worth it in Maine, due to the frequent clouds and rain? The answer is yes, despite these two concerns

As you are likely aware, Maine has some of the highest electricity costs in the nation, around 40% higher than the national average. Solar systems can function well even without ideal weather, benefiting the environment and your wallet.

Many homeowners in Maine have been reaping the benefits for years. One of the reasons for this are the exorbitant costs of electricity in the state of Maine.

They make producing one’s own electricity particularly lucrative.

Solar Panels for Home in Maine

From start to finish, the entire process of setting up a PV system for your residence can take around 3 months. Usually the installer company you chose will send both an engineer and a representative to visit your property to assess suitability and take measurements.

They will check things like the roof and home electrical systems.

Another part of the process is the paperwork. Building permits will likely be required depending on the location.

Your installer will be aware of the requirements for your situation and may even complete the paperwork on your behalf. Also, you will want to be sure to take advantage of all solar rebates from the government (both State and Federal) as outlined below.

Once everything is ready, an equipment order will be placed. The most expensive pieces will likely be the panels themselves along with one or more inverters.

Your installer will likely have preferred brands, but it is worthwhile to do some research to make sure that they are the best brands for you, as your installer may receive some benefits for recommending specific brands and/or products.²

Does Solar Increase Home Value?

‘Does solar increase home value?’ Solar absolutely increases home value.

Almost all the costs of a solar system are upfront. They require very little maintenance.

And of course, they provide lasting reductions to electricity costs, thousands per year. The National Renewable Energy Laboratory (NREL) estimates that for home buying, every dollar saved on energy through solar increases home value by $20.

To figure out exact numbers, residents can consult real estate websites and compare solar-equipped homes with conventional homes to get a sense of price differential. Thanks to the Renewable Energy Investment Exemption, Maine residents are exempted from paying tax on the value of their home added with a solar system.

Rooftop Solar Panel Installation (Solar Panel Installation)

The physical installation of the solar panels and their associated equipment can take a few or more days. The roof will need to be prepared with cleaning, and wires laid which connect the electrical panel and power system.

Usually (depending on the material, slope, and aspect of the roof), racking will be installed and the panels mounted atop them. Inverters are connected last.

They convert the direct current (DC) energy produced by the PV system into alternating current (AC) electricity used by residential electrical systems and the power grid for a while.

A government (local or federal) official will perform an inspection to verify the system. Then last, a representative from your utility company will arrive to perform a final inspection and connect your system to the grid.^2,9

If the system is off grid, this final step isn’t required.

Cost of Solar Panels in Maine: How Much Are Solar Panels in Maine? (Maine Solar Panel Cost)

According to sources, the average price for a 5-kilo-watt solar system without (or before) receiving a fax credit is around $11,500-$15,500. This high up-front cost of solar panels in Maine is one of the biggest reasons for interest in Maine solar incentives.

The biggest two are Net Energy Billing and the Federal Solar Tax Credit.

There are three main ways people buy solar systems. The first is outright with cash, the second is with financing through loans, the third is some type of leasing or purchase agreement.

With cash, you own the solar system immediately, can benefit from all government credits and rebates, and avoid any interest or loan fees. It is the recommended option. Financing can be done through banks or other lenders, however, they carry obvious risks and additional charges.

Perhaps the best financing option would be to take a loan out through a trusted solar installer. Many times purchases under such loans can still be eligible for the federal solar tax credit.

The third option is leasing. This involves a long-term contract with a solar developer by which they install solar panels on your property and charge you a monthly rate to use the energy.

In this case, all government incentives almost always go to the developer, since they own the technology. A power purchase agreement (PPA) is similar, but instead of a fixed rate, the developer charges you a price per kilowatt hour for the energy generated.³

Solar Panel Installation Cost Maine (How Much Does It Cost To Install Solar Panels in Maine?)

The cost of solar panels in Maine should be estimated at around 10% of the total solar system cost (around $1,500). Of course, there is significant price variation among installers and desired systems.

Some people prefer panels of differing sizes and wattage. This price estimate does not include any reductions from Maine solar incentives or federal energy credits.

However, even at full price, most systems will pay for themselves in around 7-8 years.

How Much Is the Cost of Solar Panels in Maine?

Panel costs vary by installer company and various panel specs. But a standard 5-watt system averages around $15,000 in the state of Maine.

This estimated cost of solar panels in Maine does not take into account any solar incentive programs or rebates, which could easily drop the average around to under $10,000.

In addition, even when accounting for full price, most residential solar systems pay for themselves within a matter of years.

Pros And Cons of DIY Installation

The pros of DIY installation are the potential reduction of the usual 10% fee charged by the installer on top of equipment costs etc. and any time saved by not having to coordinate with the installer.

The cons are usually much greater. They include the opportunity costs of time and energy and the likelihood of making a mistake that will cost more money in the future.

Also, DIY installers will not benefit from any installer warranties. For almost all systems, professional installation is recommended.

You are far more likely to save time energy and money in the long run by paying an extra 10 percent up front. Especially as that ten percent will be eligible for incentive rebates like the Federal Solar Tax Credit, and because, if operating smoothly the solar system will likely pay for itself in a matter of years.

Solar Panel Cost Calculator Maine

There are many calculators available on the internet. Here is one.¹⁰

You can also use this solar panel calculator:

Free Solar Panels Maine

Maine does not currently have a pathway by which to obtain truly free solar panels.

The only options which could be marketed as free solar panels are the lease and PPA agreements discussed above.

In these cases there is no specific charge for the cost of solar panels in Maine, however the customer is charged either per month or per watt produced. Another possibility is Maine Community Solar.

Is There a Free Solar Panels Option in Maine?

You may be thinking about how to get solar panels for free, or how to get free solar panels from the government. Most promises of free solar panels are simple marketing ploys for plans that will likely be more expensive in the long run.

For example, with a PPA plan, a solar developer will install ‘free’ solar panels on your property. You do not actually own them and have to pay the developer company per unit of electricity generated.

Because you do not own the solar panels, you do not benefit from government incentives. In fact, sometimes the developer does.

It is recommended to own your own solar panels to reap all the long-term benefits. If the up-front costs are simply too much, financing is an option.

Another option is Maine community solar, by which you invest in a solar development, and reap proportional rewards.

Environmental Impact of Solar Panels

Solar energy is considered a form of clean or green energy, and the consensus among environmentalists is that it is better for the preferred to fossil fuel energy. However, there are still environmental detriments associated with its generation.

For land use, rooftop solar systems do not require habitat destruction. In fact, they make double use of land already been designated for housing.

With water use, PV systems do not directly use water to generate electricity. But large amounts of water are required for manufacture, during which it is usually subject to a high degree of waste and pollution.

The vast majority of environmental detriments associated with solar power have to do with the mining, manufacture and disposal of the panels themselves, specifically regarding the sourcing and processing of hazardous materials.

The amount and sort of chemicals vary significantly, with thin film PV cells associated with a much higher degree of danger and environmental damage.

Many of the chemicals present severe human and environmental danger simply to extract from the earth. They are often taken from countries with very little worker safety or environmental regulations or enforcement.

Then, during the manufacturing process, risks remain. For example, factory workers risk inhaling silicon dust. In general, the sourcing, processing, and disposal of these toxic materials is by far the greatest environmental hazard associated with solar power.

Another issue is greenhouse gas emissions. Manufacture, transportation, installation, disposal processes, etc. all contribute to emissions calculations. You can learn more about the carbon footprint solar panels.

But many estimates put life emissions for PV systems between 0.07 and 0.18 pounds of carbon dioxide per kilowatt-hour. You can learn more about total carbon offsets using this carbon footprint calculator.

Fortunately solar is one of the power types with the least carbon footprint. It is mainly for this that it is valued as environmentally friendly.

The best way a solar customer can ensure their purchase does not harm people or the environment more than necessary is to buy from the most ethical and reputable dealer possible and to ensure the supplier has a strong recycling system.

Maine Solar Panel Disposal

The question ‘why are solar panels so expensive?’ usually comes down to the scarcity and variety of materials from which they are constituted, including silicon, aluminum, copper, and plastic.

When solar panels are disposed of in landfills, these materials are lost and often leak into soil and groundwater, posing hazards to humans and the environment. The good news is that many of these materials are recyclable.

Glass accounts for a large amount of solar panel waste by weight, and fortunately, most first-world countries have well-developed glass recycling infrastructure.

Similarly copper wire from the panels and its aluminum. The panels’ toxic metals are the biggest concern.

One issue is that many models of PV panel feature a polymer seal, which is designed to increase weather resistance. This seal though greatly impedes disassembly and therefore recycling.

Usually a large amount of heat must be applied to remove it, increasing cost, risk, and environmental impact. There are other PV system components to consider such as the paneling, which would be simply scrap metal, and the inverters which would be more standard E-waste.

The best short-term avenue for improvement is a program to recycle the toxic metals within the panels. From a consumer perspective, the best way to ensure this is to buy from a supplier with a panel recycling program.

Solar panel recycling, and electronic recycling is still developing industry. As financial incentives and public support increase, companies are trying to figure out the best ways to reuse as much material as possible from various forms of electronic waste.

There are various recyclers in Maine, and the coming years should witness significant progress. The best way to recycle your solar panels is to contact your supplier or installer, type a quick internet search for solar recyclers in your area, or see this State page on solar decommissioning.^1,11

Maine Green Power Program (Maine Green Energy)

This program is an opportunity for businesses and individuals to support green energy production. When you enroll, there will be an extra line on your electric bill for $8.95 per block.

The program purchases renewable energy certificates which guarantee that electricity from green energy sources is delivered to your regional power system. The energy sources include solar hydro wind and biomass, among others.

Maine Green Power is run by the Maine Public Utilities Commission and anyone who receives an electric statement from Central Maine Power or Versant Power, is eligible to enroll.

The program works by using RECs per kWh.

The kilowatt-hour (kWh) is the standard billing unit of electricity in the United States and represents 1000 watt hours, about double what the average Maine residence consumes in a month. A renewable energy certificate (REC) basically represents the amount of renewable energy produced by an individual’s solar system.

The ultimate owner of the SREC owns the “solar-ness” of the power.

While the Green Power Program is not one of the Maine solar incentives, it is a statewide solar program designed to benefit the environment, and help lower the cost of solar panels in Maine.