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Maine is often associated with its gloomy winters rather than abundant sunshine. However, due to the state’s high electricity prices, solar power remains a smart choice for many residents.
Although Maine doesn’t offer extensive state-level rebates and incentives for solar, it does have a strong net metering policy, making solar a cost-effective investment.
Here’s what you need to know about going solar in Maine.
Key Solar Rebates and Incentives in Maine
The most significant solar incentive in Maine is a federal tax credit.
Residential Clean Energy Credit
The Residential Clean Energy Credit, previously known as the federal investment tax credit (ITC) or the federal solar tax credit, can reduce your solar panel system’s cost by 30%. This credit applies to the entire system, including equipment, labor, permitting, and sales tax. For a 5 kW solar panel system in Maine, which typically costs around $16,909, the 30% credit lowers the cost to $11,836.
You can claim this credit on your federal tax return, but to qualify, you must purchase the system outright or finance it with a solar loan. Leasing the system disqualifies you from this credit. Additionally, you need a sufficient tax liability to benefit fully from the credit, though any unused portion can be carried forward each year until 2034. Tax-exempt entities, such as nonprofits, may be eligible for a direct payment.
Solar Property Tax Exemption
In addition to the federal credit, Maine offers a solar property tax exemption. While solar panels generally increase the value of your home, which could lead to higher property taxes, this exemption allows you to avoid taxes on the added value of your solar system. Although official documents don’t specify the exact duration of the exemption, it is suggested that it may last for the lifetime of the system.
Net Metering In Maine
Connecting your solar panel system to the grid allows you to take advantage of net metering, which is arguably the most valuable incentive for rooftop solar, surpassing even large rebates and tax credits.
With net metering, you don’t need constant sunshine to reap significant benefits from your solar panels. Essentially, your electric utility functions like a bank account for the energy your system produces each month.
When the sun is shining, your home uses energy from the solar panels first. Any excess energy is sent back to the grid, and you receive full credit for it on your energy bill.
When the sun isn’t shining and you draw power from the grid, the utility company uses your accumulated credits to cover the cost. You won’t pay for electricity until these credits are exhausted.
In Maine, net metering rules are consistent across all electric utilities, including Versant, Central Maine Power, Eastern Maine Electric Coop, and smaller providers.
Few details to keep in mind:
Credit Measurement
In Maine, credits are measured in kilowatt-hours (kWh), not dollars. Monthly fixed costs, such as meter connection fees, must be paid in cash, as kWh credits cannot cover these charges.
Credit Roll-Over
Credits roll over from month to month, but you need to use them within 12 months of generation. Any excess credits are carried over and used on a first-in, first-out basis. For example, credits from July are valid until the following July, and those from September are valid until the next September.
Net Energy Billing
Maine’s net metering policy is officially known as “net energy billing,” which can be confusing since “net billing” typically refers to less favorable terms. Despite the terminology, Maine’s policy is among the best in the U.S. for solar crediting.
Options for Financing Your Solar Panel System
Cash Purchase
You’ll own the system outright and pay for it upfront, offering the best long-term savings.
Solar Loan
Allows you to retain ownership of your system with little to no money down. Look for subsidized clean energy loans through local incentive programs for the best rates. Home equity loans or personal loans are alternatives, though private solar loans may come with higher interest rates or upfront fees.
Solar Lease or Power Purchase Agreement (PPA)
A third-party company owns the system and either leases you the panels (solar lease) or sells you the electricity they generate (PPA). These options typically offer lower savings and can involve lengthy contracts. Be sure to carefully review the terms before committing to avoid potential drawbacks.
Navigating the Solar Interconnection Process
Navigating the solar interconnection process in Maine involves several key steps to connect your solar panel system to the electrical grid:
- Select a licensed and experienced solar installer to assess your property, design your system, and handle the installation.
- The installer will design your solar system and obtain the necessary permits from local authorities. This typically includes building and electrical permits.
- Submit an interconnection application to your electric utility. In Maine, this process is managed by various utilities such as Versant, Central Maine Power, Eastern Maine Electric Coop, and others. The application includes details about your solar system and its connection to the grid.
- The utility company will review your application to ensure it meets technical and safety standards. This may involve a site visit and technical evaluation.
- After receiving approval and permits, your solar system will be installed. This includes mounting the panels, wiring, and setting up the inverter.
- A final inspection by local authorities and/or the utility company is required to confirm that the installation complies with all regulations and is safe to operate.
- Once the inspection is approved, the utility company will connect your system to the grid. This involves installing a net meter to track your solar energy production and consumption.
- With your system connected, you can begin generating electricity and benefiting from net metering or net energy billing, which credits you for surplus energy sent back to the grid.
- Regular monitoring and maintenance are crucial to ensure your solar system operates efficiently and any issues are promptly addressed.
By following these steps, you can effectively navigate the solar interconnection process in Maine and start enjoying the benefits of solar energy.
Are Solar Panels Worth It?
Yes, solar panels are generally a valuable investment, both financially and ethically. Although the initial cost of a home solar power system can be high, tax credits and other incentives can significantly lower these upfront expenses. Over time, many users experience substantial savings on their electric bills, which helps offset the overall cost. Additionally, solar panels provide the satisfaction of contributing to environmental sustainability. In most cases, the benefits of going solar far exceed the drawbacks.
