Maine Solar Incentives & Tax Credits for Residents, Businesses 

In sunny states like California or New Mexico, using solar power at home is a no-brainer. But in Maine, which gets less sunshine, the benefits are less obvious. That’s why the Pine Tree State currently ranks 30th out of 50 states in the country for solar adoption.

But even in this northern state, going solar can still be worthwhile. Residents, businesses, nonprofits, and government agencies can all save money by adding solar panels to their property. Or, even easier, they can enjoy the benefits of solar energy indirectly by signing up for community solar. 

How much does it cost to install solar panels in Maine? 

Solar power systems are priced based on how many watts of energy they produce. Sources put the average cost in Maine at somewhere between $2.83 and $3.80 per watt. That price includes all parts of a solar power system: panels, inverter, racks, wiring, and installation.

However, the average Maine homeowner does not need a very big solar power system. The typical size of a system is about 6 kilowatts (kW), depending on location. Based on a midrange cost of $3.30 per watt, the average homeowner would pay around $19,800 for a solar setup. Moreover, solar tax credits (discussed below) can reduce this up-front cost by up to 30%. Once your solar panels are installed, you can expect to see significant savings on your electric bill. Between the tax credit and energy savings, a solar setup can pay for itself in anywhere from 6 to 15 years.

What are solar incentives and solar tax credits? 

One reason solar energy is such a good deal, even in chilly Maine, is solar tax credits and incentives. Solar tax credits allow you to take part of the cost of solar panels off your tax bill. Other solar incentives offset the cost of a solar power system in different ways. In Maine, one important solar incentive is net metering, which allows your solar panels to make money for you.

Are there solar tax credits in Maine? 

The state of Maine does not offer any state-specific tax credits for going solar. However, Mainers can take advantage of a federal tax credit to reduce the cost of a new solar power system.

Federal solar tax credit 

The federal Investment Tax Credit is a one-time tax credit you can take the year you install a solar setup. To qualify, you must purchase—not lease—a new solar power system for your home by the end of 2034. If you go solar by 2032, you can take 30% of the cost off your federal tax bill. That’s 30% of the entire cost, including the panels, inverter, wiring, mounting racks, battery storage, installation, and sales tax.

As noted above, the average cost of a solar power system in Maine is around $19,800. A 30% tax credit allows you to take $5,940 off your taxes, reducing the net cost to under $14,000. This credit drops to 26% of the total cost ($5,148) in 2033 and 22% ($4,356) in 2034.

Residential and business solar incentives in Maine 

Maine offers two kinds of incentives for residents and businesses to go solar. First, it allows solar power users to earn credit for any excess energy their systems produce. And second, it exempts them from any property tax increases for adding a solar power setup.

Net metering in Maine 

Net metering is a way to earn credit for energy your solar energy system sends to the power grid. To take advantage of net metering, you must have a grid-connected system. Whenever your system produces more power than you use, the excess energy goes into the grid. Then you receive credit for that energy on the next month’s electric bill.

Under Maine’s net metering program, homeowners with solar systems earn credit for their excess power at the full retail rate. That means you earn as much for each kilowatt-hour (kWh) you produce as you pay for each kWh you use. Businesses can also use net metering, but they don’t receive the retail rate for their excess power. Instead, they earn a fixed amount per kWh set by the Public Utilities Commission. This amount varies based on the utility and the size of the business. The smallest commercial customers of any given utility earn the highest rates—up to $0.25 per kWh in 2023.

Using net metering requires a special two-way electric meter that shows when your system is sending power to the grid. It also requires you to apply for interconnection with your local electric utility. In most cases, your solar installer handles these details for you while setting up your system.

Maine property tax exemption 

According to data from Zillow, adding solar panels to your property increases its value by 4.1% on average. In Maine, where the average home costs about $383,000, that works out to a boost of roughly $15,700 in value.

Under normal circumstances, this increased home value would mean higher property taxes as well. At the state’s average property tax rate of 1.09%, you could expect to pay an extra $171 per year. But in Maine, the value added by a solar installation doesn’t count toward your property tax bill. This exemption saves the average Maine homeowner $3,420 over the 20-year lifespan of a typical solar power system.

Community solar in Maine: solar benefits without rooftop panels

Installing a rooftop solar system isn’t an option for everybody. Maybe you live in an apartment and don’t have a roof to put solar panels on. Maybe you live in a house, but it’s rented, so you aren’t authorized to put panels on it. Maybe you own a house, but the roof doesn’t get enough sunlight to make solar worthwhile. Or maybe the up-front cost of a solar power system, even after tax credits, is too much for your budget.

Fortunately, there’s another way to enjoy the cost-savings and environmental benefits of solar. With community solar, you can purchase a share of the energy from a nearby solar farm. This doesn’t mean the power from the solar farm goes directly to your home. It goes into the grid, and you get your electricity from the grid. But by signing up for a community solar share, you get to claim a portion of that solar energy as your own. Better still, you pay for that power at a discounted rate. In Maine, community solar can save you anywhere from 5% to 15% on your electric bill.

Community solar is growing rapidly in Maine. A 2019 law increased the maximum size of community solar farms from 650 kilowatts to 5 megawatts. It also removed a limit on the number of customers a community solar farm could have. Since then, the total amount of community solar capacity in the state has grown by over 200 megawatts.

Signing up for community solar is also much easier than having solar panels installed. There’s no up-front cost and no installation hassles. Just enter your ZIP code on the Perch website to be matched with a community solar project near you.

Is it worth going solar in Maine?

For most Mainers, the answer is yes. True, solar panels aren’t as cheap or as productive in Maine as they are in some other states. But between solar tax credits, energy savings, and net metering, they’ll still save you money in the long run. And if solar panels aren’t an option, Maine’s ever-expanding community solar options offer the same savings with even less effort. No matter who you are or where in Maine you live, solar power can work for you. It’s a great way to reduce your electric bill and your carbon footprint at the same time.