Maine Solar Rebates and Incentives

How Much Can You Save on Solar in Maine?

Maine receives approximately 3,815 kilojoules per sq meter of sunshine annually, lower than the national average. As of 2022, Maine generated 612 megawatts of solar energy, enough to power about 106,193 homes.

The Pine Tree state has 5 major solar installations and 57 solar companies. Solar generation in the Pine Tree state is projected to increase 200% by 2029.

Available renewable energy incentives in Maine.

The total energy consumed per person in Maine averaged 75.4 million British Thermal units in 2020. Industrially, the total energy per capita was estimated to be 73.5 million British Thermal Units. On the other hand, commercial establishments had a total energy per capita of 47.2 million BTU.

How Cheap or Affordable is Solar Energy in Maine?

Retail grid electricity costs 13.96 cents per Kilowatt hour in the state as of 2021. Furthermore, solar panels cost $2.87 per watt on average in Maine. By implication, a 6Kw solar panel would cost $16,073 in Maine.

With the 30% Federal Solar tax credit, homeowners can save $0.86 per watt off the cost of a solar panel. With this solar credit, a 6Kw solar panel would cost $13,000 on average in Maine.

Renewable Energy in Maine

As of 2020, the state’s energy generation was 79% renewable. This dropped slightly to 72% in 2021. Major renewable energy sources include hydroelectricity, wind, solar, wood, and wood derivatives.

Hydroelectricity is Maine's largest renewable energy source, followed by wind. The state has rivers and water bodies that contribute to hydroelectric generation. As of 2022, Maine has about 52 licensed hydroelectric power stations. These power plants generate about 726 megawatts of the energy supply in Maine.

In Maine, no regulations explicitly stop power consumers from purchasing 100% renewable energy.

The state was ranked 9th in terms of wind power generation as of 2022. The state has wind turbine crests on the western coast along its borders. It also has wind resources on the state’s Atlantic west coast and Bingham.

The Bingham wind station has a capacity of 186 Megawatts. By regulation, each power retailer in Maine should supply about 30% renewable energy.

Federal Solar Tax Credit in Maine

Part of the United States' effort to encourage the adoption of solar energy in the country, the Investment Tax Credit (ITC) allows homeowners to claim credit for energy systems installed between 2022-2031.

The ITC (also commonly referred to as the Federal Solar Tax Credit) was first introduced in 2005.

The Federal solar credit is, technically, not a solar rebate. Rather than actual monetary savings, it is more like a tax offset. Whatever total amount the credit adds up to, it is added to income taxes. That way, it offsets what homeowners owe – in taxes – for the year they complete their solar installations.

In 2005, the legislation designated the credit deadline to 2024 and 30% for solar installations. The legislation was revisited in 2022 when the US government passed the inflation reduction act. The parameters of this solar tax credit were altered in this act. For one, the application deadline was extended to 2034. Also, the percentage of solar tax credit was designated to diminish until the deadline in 2035.

In the new credit schedule, homeowners can claim 30% credit for energy systems installed between 2022 and 2031. From 2032 to 2033, the solar tax credit drops to 26%. For systems installed in 2034, the credit drops to 22%. Solar energy systems installed after 2034 are not eligible to apply for the Federal Solar tax credit.

With the solar tax credit, homeowners in Maine can install solar energy systems at considerably lower prices. As a result, low-income families find energy bills less herculean to pay. The solar credit covers the cost of installation. By implication, it covers the cost of equipment, cost of labor, and cost of equipment.

Eligibility

The following are the necessary criteria to be eligible for the Federal solar tax credit as a homeowner in Maine:

• Solar Property Ownership: The solar energy system must legally belong to anyone claiming credit. Ownership could be by purchase, inheritance, or lease. Leased-off solar panels do not count.

• Installation timeline: The solar energy systems must have been installed and operational before 2035 to qualify for the credit. Tax assessors allocate credit based on the date owners complete installation and systems start operating. Systems installed after the deadline are not eligible for the tax credit, except if the legislation is revisited and repealed.

• Tax Liability: The taxpayer’s liability must be enough for the tax credit to apply. If the homeowner is insufficiently liable, credit can be rolled over until the next four years.

• Type Of Solar Energy System: The Federal solar tax credit only applies to systems that generate electricity for commercial or residential consumption. Heating systems – in baths and pools – do not qualify for a solar tax credit.

• Minimum Safety and Regulatory Requirements: Energy systems must meet the minimum safety and regulatory requirements to qualify for any solar rebate in Maine and the United States. Panels deemed unsafe and unfit are not eligible for the federal solar tax credit.

How do I claim the Federal Solar Tax Credit in Maine?

Applying for and claiming the Federal Solar Tax Credit are straightforward processes. Here are the steps to take:

Step 1. Confirm you are Eligible: Check your panel, your taxes, and your expenses against the eligibility criteria – detailed above – to see if you are fit. Most importantly, only taxpayers are eligible for the Federal solar tax credit.

Step 2. Obtain Documentation: You need documents from your installer, the solar energy company, and a property tax assessor. You also need the invoice of purchase. These documents are necessary to estimate the cost of installation, verify date, and determine eligibility.

Step 3. Complete the IRS 5695 form: You need to obtain the residential energy credits form from the Tax office in Maine. The form is necessary to estimate your tax credit and collate information about the solar energy system.

Step 4. Complete the IRS 1040 form: This is otherwise known as the primary tax form. This form is necessary to estimate your income tax returns. It is also used to collect and verify your taxpayer information.

Step 5. Submit for Evaluation: After filling out the necessary forms, you need to file them and submit them to the Tax office. Sometimes, you may need the expertise of an accountant to file them for you. Accountants are safer for tax estimates.

Net Metering in Maine

As of 2023, Maine has an advanced Net metering system known as the Net Billing System. It was introduced by the Main Public utilities commission (PUC) in 2019 to encourage renewable energy in the state.

The program is governed according to the provisions of the PL 2019 C.478 in the Maine State Constitution and the 313th Chapter of the Maine Public utility rules. Under this program, homeowners and businesses can generate their own power and share it with others.

Consumers who generate their power can offset power bills. Upon interconnection, these consumers are credited at the full retail rate per Kilowatt hour of electricity they send back to the grid.

The Net Billing program also allows joint renewable energy projects and joint benefits. There are two sub-programs under the Maine Net Billing programs. These programs are the NEB Kilowatt hour credit program and the NEB tariff rate program.

NEB Kilowatt-hour Credit Program

This is available to residential, industrial, and commercial establishments. Under this program, customers receive credits on their electric bills per Kilowatt-hour of energy they generate. The conditions are flexible; the energy system may be personal to the home or shared with a larger community of people. This program is only available for energy systems with a maximum generating capacity of 5 Megawatts.

Disclosure is another criterion for the program. For projects and utilities aiming to market power, they must be registered with the Maine Public commissions. Furthermore, they are required to disclose certain information about the projects to consumers. This information – which includes project cost and benefits – is to be presented in the NEB disclosure Tariff form. Finally, unused credits disappear after a 12-month period.

NEB Tariff Rate Program

The tariff rate program is available only to commercial and industrial consumers. Under this program, consumers receive a dollar credit on their electric bills. The credit rate is determined by the public utility commission annually.

While the project may be owned or shared, it must not have a generating capacity above 5 megawatts. Unused credit under the tariff program also expires after 12 months. Finally, entities must be registered with the Public utility commission to market this and meet the disclosure requirement.

Who is Eligible for Net Energy Billing in Maine

To be eligible for the Net Billing Program in Maine, consumers must be:

• Located within the territory of the Public Utilities commission's service
• Own or share a renewable energy system with a maximum generating capacity of 5 Megawatts. Only 4.99 MW can be used for Net Metering. Municipalities that generate more than the threshold will use the excess to offset losses. No credit is applied for power generated above the threshold.

How to Enroll for Net Energy metering in Maine

To apply for Net Billing Program in Maine, the following steps are necessary:

• Step 1. Ensure you are Eligible: Consider the eligibility criteria above and make sure you follow the provisions to the latter. Make sure your preferred utility company is eligible. Finally, make sure your energy system meets the regulatory and safety requirements of the public utilities commission.

• Step 2. Apply with the Utility commission and your company: To participate, you are required to fill out the net metering Chapter 313 application form. You are also required to fill out an interconnection agreement. The application requests important information like the size of your system, energy output, and location.

• Step 3. Install a Bidirectional Meter: Upon approval, the public utility commission authorizes interconnection. Your utility company would handle meter installation to complete the interconnection process. This allows you to send power to the grid and back.

• Step 4. Request for Permission to operate: Getting permission to operate is important for safety. It also helps to authenticate the functionality of the meter. After this, you can turn the system on and begin generation.

Maine Property Tax Exemption

The Solar and Wind property tax exemption is another solar energy incentive in Maine. Ideally, taxes increase when taxpayers acquire a new property, such as a renewable energy system.Theoretically, renewable energy systems can increase a home value – and tax – by an average of 4%.

These new properties are accessed and taxed by the tax office according to the fair market value. With this exemption, however, taxpayers do not pay an extra amount in taxes for the value of their renewable energy systems. The property tax exemption covers a period of 20 years.

Furthermore, the property tax exemption only applies to tangible properties. By implication, the exemption does any increase in property value – and tax – consequential to the installation of the solar energy system.

It also does not cover any increase in tax value due to the operation of the solar energy system. There is currently no size or capacity limit in the exemption requirements. Also, both new and old energy systems are eligible to apply for this exemption.

Residential, commercial establishments, and industries can apply to the tax assessor’s office. To get the state’s approval for a renewable energy tax exemption, you must take the following steps:

• Have a considerably positive tax-paying record
• Own a Renewable energy system that meets the standard regulatory requirements for operations.
• Obtain a Certificate of Compliance from the Maine department of environmental protection. This confirms that your solar energy system meets the minimum environmental safety requirements for operations.
• Fill out the exemption application form
• Submit a copy of the certificate of compliance and the application form to the office of the local Tax assessor.
• Adjust your property tax bill accordingly based on the exempted value of the new system.

Maine Property-Assessed Clean Energy (PACE) Financing

The PACE program allows homeowners in Maine to borrow loans for efficient energy options. However, the Maine state government does not always directly give out these loans. There are certain local organizations that the government authorized to allocate these loans, under different programs.

The state legislature signed the PACE program into law in 2010. According to the provisions, municipalities were authorized to enter efficient energy agreements with property owners and provide financing for efficient energy systems.

Property owners are required to provide PACE assessments and repay loans. Most importantly, municipalities could use Federal or state grants or available revenue to fund the program, according to respective administrative discretion.

The home energy efficiency loan falls under this program. Homeowners in Maine can borrow up to $15,000 and repay overtime for up to 15 years. There are no fees attached to loan applications. Finally, the interest rate is affordable and can be as low as a 4.99% annual percentage rate.

Eligibility

To be eligible for the PACE financing Program, you must:

• Be a Homeowner: Commercial establishments and industries are not eligible to apply for PACE. It is strictly for residential use.

• Have a Positive Credit Score: Depending on the loan option, there are minimum credit scores that homeowners must meet.

• Have a Consistent Income: There is a maximum debt-to-income ratio you must have. The ratio is dependent on the financing option you apply for.

• Be Scandal Free: Scandal, in this case, is financial. Loan recipients must be free of recent bankruptcy, repressions, or forfeiture.

• Belong to an Eligible Municipality: The PACE program is established in some municipalities. You must belong to one of them to be eligible.

State Sales Tax Exemptions in Maine

As of 2023, Maine does not have a sales tax exemption on solar energy systems. There are, however, other forms of tax exemptions and solar rebates provided for homeowners in Maine, as discussed earlier.

Home Factors to Consider Before Solar Installation in Maine

With the advanced renewable energy incentives in Maine, installations are more affordable relative to other places. Regardless, solar installations are still investments with financial implications. It is important to thoroughly weigh your options. Here is a breakdown of the factors to help you in your evaluation:

• Roofing: The Department of Energy recommends that solar panels work more efficiently on roofs tilted at an angle between 15 and 30 degrees. It is also important that the roofing is in good condition. Poorly maintained roofs may not be able to hold the weight of solar panels. You may also need to consider the orientation and the size of your roof before selecting a solar energy system. For optimal sunlight access, your panel should be facing south.

• Location: Sunlight in Maine is slightly lower than the average in the United States. Maine receives sunlight for about 192 days in a year. If your house is located under a shade or in a cloudy region, solar panels may not be the best renewable energy option for you. By convention, solar panels should receive at least 4 hours of sunlight daily to work optimally.

• Ownership: Maine laws explicitly prohibit communities, homeowners associations, and neighborhoods from banning solar installations. Regardless, if you live in a rental apartment, you need to contact the rental management company to confirm if Solar panels are allowed. If not, community or shared solar projects are alternatives. This saves you the cost of solar installation and the cost of purchase.

• Regulations: Depending on your locality, you may need to obtain some permits before you install a solar panel. You may want to consider the cost implication of applying for these permits before you fix a solar panel.

About Maine

Maine is a state in the New England region of the United State’s Northeastern part. By area, it is the smallest in the United States; by size, it is the 9th-least populous. It also ranks 13 on the list of the least-densely populated states in the United States. However, Maine is the largest by land area in the New England region. As of 2022, the state was estimated to have 1,385,340 people.