Maine solar incentives, tax credits and rebates

Financial resources for Mainers in 2024

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Do you own or rent?

lake house with solar panels

There’s no way around it: Installing solar panels is expensive. On the bright side, a federal tax credit and state property tax exemption help make it more affordable. You might also be eligible for Maine’s new Solar for All program, which helps low-income households get solar panels and energy storage batteries.

Here’s everything you need to know about how state and federal solar incentives can make installing panels more affordable.


Key insights

  • In Maine, a typical residential solar panel system costs $12,386 to $35,387, depending on the size of your system and what financial incentives you qualify for.
  • The 30% federal solar investment tax credit (ITC) is the most significant solar incentive for most homeowners buying solar panels.
  • Leasing or entering a power purchase agreement (PPA) is often cheaper upfront, but you won’t be eligible for the federal solar tax credit and other financial incentives.

Residential solar panel incentives in Maine

The federal solar investment tax credit (ITC) is the best way to save money when going solar in Maine. It reduces your federal tax liability by 30% of how much it costs to install solar panels. This is different from a deduction, which lowers your taxable income. ITC is a credit, meaning it directly decreases the amount of taxes you owe.

The ITC drops to 26% in 2033 and then 22% in 2034.

For example, if you spend $10,000 installing a solar panel system, the ITC is worth $3,000. If in the year your system becomes operational you owe $15,000 in taxes, the ITC reduces what you owe to $12,000.

Tax credits offset your tax liability, so it’s only useful if you owe federal income taxes in the first place. However, the credit rolls over to the next tax year if you don’t use the full amount. You don’t get these benefits automatically, though. You must claim your solar equipment, labor and permits on your federal taxes for the same year you started using your system on Form 5695.

Solar property tax exemption

The Renewable Energy Investment Exemption exempts solar panels from property taxes. This can significantly reduce the cost of installing solar panels on your property. To qualify, you must apply to your local town office by April 1 of the first year you claim the exemption.

  • Eligibility: To qualify for the exemption, your solar panels must be used primarily for heating or generating electricity for your home.
  • Financial benefit: This exemption can lead to substantial savings over time, as it prevents your property taxes from increasing due to the increased value of your home with solar panels.

Maine’s Solar for All program

The Environmental Protection Agency (EPA) awarded $62 million to Maine to create a new statewide program called Solar for All. The program will increase access to solar energy for low-income residents. Solar for All is expected to launch in the state by the end of the year and is anticipated to create jobs while also reducing energy costs.

What to know about net metering in Maine

Net metering lets homeowners with solar panels sell any excess electricity they generate to their local power grid. In Maine, net energy billing allows homeowners to sell excess electricity they generate back to the grid. There are two programs offered.

  • Credit Program: The net energy billing kilowatt-hours (kWh) credit program credits your bill for every kWh of electricity you generate, similar to traditional net metering. Any unused credits expire after 12 months.
  • Tariff Rate Program: The net energy billing tariff rate program offers dollar credits instead, which can be helpful to offset demand charges. Both programs have a capacity limit of 5 megawatts (MW), but systems over 1 MW installed after Sept. 1, 2022, will receive a lower rate under this program.

The Maine Public Utilities Commission (PUC) establishes the rates for these programs each year.

How much are solar panels in Maine?

After considering the federal solar tax credit, solar panel costs in Maine typically range from $12,386 to $24,771. Your system size greatly affects how much you pay overall. The typical system size for solar systems in Maine is 8.95 kW (kilowatts).

How do you know if the average size system is enough for your home or if you need a bigger one? Check the amount of electricity you used last year in kWh. You’ll find this information in your electric account dashboard online. Then, divide your annual kWh by 1,200 to find the system size you need. For example, if your home used 15,000 kWh last year, you would need a 13-kW system.

Average solar cost by system size in Maine

Solar resources in Maine

Below are some additional resources.

Find solar companies in Maine

A good solar company helps you navigate local incentives, permitting and net metering policies. Compare our picks for Maine’s top solar companies to learn more.

Do you own or rent?

FAQ

Can I get free solar panels in Maine?

There are no programs for free solar panels at this time. However, you can lease the equipment with little to no upfront costs.

» FREE SOLAR PANELS: Are they really free?

Can I get a power purchase agreement in Maine?

Power purchase agreements aren’t a common practice for residents in Maine. Public utilities in the state have signed PPAs with large-scale wind farms, but there is no best practice for the offering on a residential level.

How much can I save with solar panels in Maine?

On average, Maine homeowners with solar panels avoid $64,522 in utility costs over 25 years. Your current electric bill is the starting point for assessing the financial benefits of transitioning to solar energy. Knowing your average energy consumption helps determine the size and capacity of the solar system you need. Once you know this, you can figure out potential savings and how long it should take for your solar installation to pay for itself.

How do I know if my house is a good candidate for solar?

It’s best to have plenty of unshaded roof space that faces south or west for optimal sun exposure. It’s also smart to upgrade any old, inefficient appliances first. Reducing your electrical loads now means you can get a smaller system, which will be cheaper.

The condition of your roof matters too — if it needs replacement soon, do that before installing solar panels. Installing solar panels on an old roof might mean you have to remove the panels, replace your roof and then reinstall the panels. This will cost around $5,000 for a 19-panel setup.

Solar photovoltaic (PV) technologies, more commonly known as solar panels, absorb sunlight and convert it into usable electricity. If you have a lot of shading around your house, they might not get enough sun to power your home.

How can I pay for solar panels?

You can pay cash, but most people finance solar panels with a solar loan. It works a lot like any other type of loan — there’s an application and approval process, and you pay it back over time (with interest).

» SOLAR PANELS: Lease vs. buy

Is my HOA allowed to restrict solar panels?

Maine law generally protects your right to install solar panels on your property or put up a solar clothes dryer if you rent. There might be restrictions if you live in a condo or if your solar setup poses safety concerns or impacts the building’s appearance. This law applies to agreements created after Sept. 30, 2009.

What has Maine’s investment in solar been so far?

Total solar investments in the state amount to $1.6 billion, according to the Solar Energy Industries Association.

Bottom line

The ConsumerAffairs Research Team conducted an in-depth analysis to determine the average costs of going solar. Turns out, it’s worth it for many homeowners, particularly in Maine.

Solar costs vs. savings: Maine and nearby states

*For 100% usage offset; **Over 25 years

Article sources ConsumerAffairs writers primarily rely on government data, industry experts and original research from other reputable publications to inform their work. Specific sources for this article include:
  1. DSIRE, "Maine Programs." Accessed March 29, 2024.
  2. EnergySage, “The cost of solar panels in Maine.” Accessed March 29, 2024.
  3. Solar Energy Industries Association, "Maine Solar." Accessed March 29, 2024.
  4. SolarReviews, “How much do solar panels cost in Maine?” Accessed March 29, 2024.
  5. National Wind Watch, “State approves power-purchase contract with UMaine wind project.” Accessed May 21, 2024.
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