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Welcome to the Ultimate Guide to Solar Panels in Maine

This page is a complete guide to the complicated and sometimes confusing process of installing solar panels on your Maine home. Since there's a lot to consider, we've separated the page into sections to help you find what you are looking for. If you find this page useful, please share it with someone who might also find it interesting!

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** What's new for 2020 **

Mainers saw a big win for home solar in 2019, with new governor Janet Mills reversing the “gross metering” policy of outgoing dumpster fire Paul LePage, and reinstating net metering for all Mainers. That’s the kind of change the state’s voters asked for in 2018, and they got it! Read on to see how that change impacts your home savings estimates for going solar in Maine!

Questions? Our network of solar experts are on call to assist you. Simply sign up for personalized assistance on our special solar deals page. You can get discounted on-grid pricing as low as $4,000/kW! This is paired with the Maine solar incentives you see below.

What you'll find on this page:

The Solar Strategy section is focused on the 3 ways of paying for solar in Maine, so you can decide which is best for you. We've created a tool that asks you a few questions and recommends whether you should pursue a solar lease, loan, or outright purchase. Then, we provide detailed analysis of how each works.

The Policy Information section contains all our latest research on the rules set by lawmakers and the Public Utilities Commission, which determine how easy it is to go solar in Maine. These policies and rules govern everything from renewable energy mandates to interconnection, and have a huge effect on the viability of solar.

Finally, the Solar Incentives section includes information about money-back rebates and grants, tax credits, and tax exemptions for going solar in Maine.

Click any of the boxes below to go to that section of the page, or scroll down to read the page in order.

Generate an accurate online solar estimate for your home

Your Solar Strategy in Maine

Figuring out the best way to go solar in Maine can be a little daunting. From loans and leases to power-purchase agreements, there are a lot of options out there. To help you pick the one that might be best, we've created the handy decision tool below.

We'll ask you a few simple questions about you and your home. Once you're done, we'll recommend a good option. Further down this page, we provide cost estimates and example return-on-investment calculations for all the various options:

How should you pay for solar?

Use our decision tool to find out!

How to pay for solar panels in Maine

The chart above shows the 25-year returns for an investment in solar whether you choose to purchase a system with cash or pay over time with a loan. Even with its great RPS, Maine isn't quite financially right for leasing yet, so we included two different sizes of solar loans—one for people with a lot of equity (or credit), and one for people with just a little.

As you can see, the purchase option leads to the highest dollar-amount returns over time, but it also requires a big up-front investment. If you take a solar loan or home equity line of credit (HELOC), instead, you'll reap all the benefits of owning a system, while offsetting loan payments with electricity bill savings. On top of that, you'll put $0 down and end up with a big, big tax break at the end of the year.

No matter which option you choose, solar makes sense in Maine, and you'll be seeing big savings long into the future.

Read on to find out more about each option.

How much can solar panels on roof save you?

Option 1: Paying cash for solar

Paying up front used to be the only way to get panels on your roof, and it's still the option that allows you the most control. But it isn't the best option from a percentage return on investment standpoint—that award goes to the solar loan option.

Still, an outright purchase returns the most money over time, because you own the system from day one and reap all the benefits. You get the 30% Federal solar tax credit and electricity savings to bring your first-year costs way down.

In our example, you put down $18,750, but by the end of year 1, incentives and energy savings will erase a bunch of it. Over 25 years, your system will have produced more than $15,000 in income.

Net Present Value: $1,512

Net Present Value (NPV) measures how good of an investment something is, compared to the best alternative. We use a 6% return to evaluate all solar investments, and Maine's $1,512 NPV on a 5-kW solar system means you'd be that much better off investing your money in solar over 25 years than in, say, stocks. Good job! But check out what happens to NPV if you buy the same system with a loan that you can pay back over time.

Here’s how the numbers work for a Maine purchase of a 5-kW rooftop solar system:

  • Installing a typical 5-kW solar system should start at about $18,750. Don’t worry if that sounds high–tax credits and energy savings will make it a lot cheaper after year 1.
  • Since the Feds calculate their incentive based on actual out of pocket costs, no state rebates means a bigger tax credit. You'll get 30% of the intial cost back the year after you install panels. That's $5,625. Thanks, Uncle Sam! Note: you can take the credit over as many years as neccessary if you don't owe $6,000 in Federal taxes this year.
  • Next, you'll subtract your first-year energy savings. That will add up to about $952, bringing your cost after the first year to $12,173. Those savings will continue for the life of your system, and will only get bigger over time, considering that utility companies raise their rates 3.5% annually on average.
  • By the time your system pays itself back in year 13, you’ll be seeing over $1,100 per year in savings until the end of your system’s life.
  • When all is said and done, our 25-year estimate shows a total net profit of $15,307, with an internal rate of return of 7.3%. That's a better return than a 25-year investment in the stock market!
  • On top of those returns, your home's value just increased by just about $21,000, too (your expected annual electricity savings over 20 years)!
  • And speaking of doing good for the environment... your system will create some green for the earth by not using electricity from fossil-fuels. In fact, the energy you’re not using has the carbon equivalent of planting 99 trees a year, every year your solar power system is humming.
Keep in mind, the numbers above are based on an average home in Maine. If you're ready for a custom quote for a solar panel system, our network of experts are on call to assist you. Simply sign up for personalized assistance on our special solar deals page.

Option 2: Using a loan to pay for solar

It's simple: taking a loan to pay for solar is a great idea. Someone else (your bank) puts down all the cash, while you get the big first-year tax credits—then your system produces electricity that helps offset the cost of loan payments. It's like investing in a business that's already successful.

As you can see from the chart above, you'll start out with a big windfall, because even though you're not putting any money down, you get the Federal 30% tax credit for the whole installed cost of your system. Then, over the 15-year repayment term of your loan, you'll be spending a little more than you're saving in electricity costs, essentially investing a total of about $600 per year as you pay the loan off.

But from there, it's up-up-up! After your loan is paid off, you'll be saving $1,200 (and growing) per year in electricity costs from your fully-owned solar panels. You'll end up more than $9,000 to the good after 25 years, which is great for an investment where you put nothing down!

A solar purchase like this will make sense for you if the following is true about you and your current situation:

  • You can get a solar loan or home-equity line of credit (HELOC) for $18,750, with a fixed rate of 4% or lower and a 15-year repayment period.
  • You love the idea of making money with a long-term investment, while also producing benefits for the environment.

Net Present Value: $3,037

Net Present Value (NPV) measures how good of an investment something is, compared to the best alternative. We use a 6% return to evaluate all solar investments, and Maine's $3,037 NPV on a solar loan means you'd be that much better off investing your money in solar over 25 years than in, say, stocks. That's a huge number, and it shows how getting a loan for solar is so much better than the alternatives. You can rest easy with an Maine solar loan knowing you're doing right for your pocketbook at the same time as you're doing right by the planet!

Here’s how the numbers pencil out for a Maine solar purchase with a loan:

  • Installing a typical 5-kW solar system should start at about $18,750. That's how big your loan will need to be to cover it.
  • The electricity you'll save in the first year of operation would have cost $952, but your loan payments will total $1,664, for a difference of $712, or about $59 per month.
  • That's not so bad when you consider your tax savings for the year will be $5,625! You'll come out almost $5,000 ahead in year 1, which should help ease the burden of loan payments for a few years, at least.
  • When your loan’s paid off after year 15, you’ll see about $1,200 per year in savings until the end of your system’s life.
  • And at the end of our 25-year estimate, you'll have saved $9,093 in electricity costs. That's a HUGE amount of money, all for an investment that you didn't need to put a penny down for.
  • Finally, the environmental benefits cannot be overstated. Operating your system will take as much carbon out of the air as planting 99 trees every year!
Keep in mind, the numbers above are based on an average home in Maine. If you're ready for a custom quote for a solar loan, our network of experts are on call to assist you. Simply sign up for personalized assistance on our special solar deals page.

Option 3: Buying the electricity, not the panels with a Power Purchase Agreement (PPA)

Maine does not offer solar Power Purchase Agreements or leases. Perhaps it would be a good idea to contact a solar advocacy organization and ask them to fight for solar in your state!

Calculate solar panel cost and savings for your specific home

Maine Solar Policy Information

Ever wonder why solar seems to be everywhere in some states, but not in others? We did too.

State legislatures and public utilities commissions can enact rules to make solar power accessible for everyone. Favorable rules explain why some of the cloudiest states—New York, New Jersey, and Connecticut, are doing so well with solar, and yet some of those with the most natural solar resources—like Alabama, Mississippi, and Georgia—are doing so poorly.

Below is important information about the public policy, rules, and economic reasons that affect your ability to go solar here in Maine:

Maine's Renewable Portfolio Standard

100% by 2050

Grade: A

Maine's Renewable Portfolio Standard grade

Alongside the positive changes in the governorship post, we get a very strong standard for renewable energy for all Mainers to enjoy. We also thought it was smart lawmakers included an intermediate goal of 80% renewables by 2030. That’s a challenging target, just 10 years away.

Learn more about Renewable Portfolio Standards

Maine's Solar carve-out and SRECs

None

Grade: F

Maine's Solar Carve-out grade

If the RPS contained specific carve-outs for clean and efficient solar technologies, or mandates for the environmentally necessary increases in distributed generation, you’d see even stronger incentives for residential solar power. Sadly, there is no specific solar requirement included in Maine’s RPS.

Learn more about Solar Carve-outs

Maine Electricity Prices

$0.17/kWh

Grade: A

Maine's Electricity cost grade

Maine homeowners pay an average of 16 cents/kWh for electricity. That’s noticeably above the national average of 13.6 cents/kWh, but it’s also noticeably below the New England regional average of 18 cents.

We know you hate those electric bills, but here at Solar Power Rocks, we actually think electricity prices are too low, at least for current production methods. Most of our electricity still comes from burning millions of tons of fossil fuels. The cost of those fossil fuels in dollars and cents may be low (for now), but the environmental costs are astronomically high. Switching to solar power now saves you money (and helps save the planet); when scarcity and regulations drive up the monetary costs of fossil-fuel based energy, the early switch to solar power is going to be saving you piles and piles of money. Just remember to thank us.

Find out why electricity prices matter

Maine Net Metering

Full retail, unused credi

Grade: B

Maine's Net Metering grade

With kudos to governor Janet Mills, Maine has re-established 1-to-1 net metering credits at full retail for solar home solar energy. However if you have unused net metering credits at the end of the year, they get reset to zero and cannot be credited toward your January bill from December. Therefore, it’s important to size your home solar system well, to ensure you aren’t running over and unable to use credits after the year is up. Connect with a local solar expert to help get your system sized well and calculate your savings.

Learn more about net metering

Maine Interconnection Rules

Statewide

Grade: B

Maine's Interconnection Standards grade

Maine also has a very strong interconnection law, covering all utilities and project sizes under a tiered system. Your residential system is likely to be in tier 1 (10 kW or less), which means you get simplified procedures and an application fee of only 50 bucks. Your system is also exempt from any insurance coverage requirements.

Learn more about solar interconnection rules

Maine Solar Incentives

Next to high electricity prices and net metering, solar incentives have traditionally been the most important factor for whether home solar power makes financial sense in a state. In the past, some states with otherwise lousy policy had tremendous incentives that drove down the up-front cost of going solar so much that homeowners could save oodles of money even without net metering or a good RPS.

These days, the big incentive most people can get is the Federal Solar Tax Credit that earns you 26% of your total system costs back after just 1 year. State incentives play less of a role than in the past, but some really good ones are still out there, ready to help homeowners go solar and save money before you know it.

Let's see how Maine measures up:

The availability of state solar incentives for residential solar systems was sourced from the Database of State Incentives for Renewables and Efficiency, utility company websites, and the state public utility commission.

Maine Solar Power Rebates

None

Grade: F

Maine's Solar Rebates grade

Maine used to have a small rebate program for homeowners who installed solar panels on their homes. Unfortunately, that rebate program has gone the way of the great auk. There is no current solar rebate program available to Maine residents.

Learn more about solar rebates

Maine Solar Tax Credits

None

Grade: F

Maine's Solar Tax Credits grade

Maine lacks any tax credits for solar power. We think the legislature can do more by offering you a personal tax credit to help offset the cost of switching to solar power. Don’t worry that much, though. There is still the big, beautiful federal tax credit to help ease your transition to solar.

Learn more about state solar tax credits

Property Tax Exemption

None

Grade: F

Maine's Solar Property Tax Exemptions grade

Maine also doesn’t offer a property tax exemption on all the extra value your home will have with panels installed. We think that’s a shame in a state with a great RPS. It might be time to let the lawmakers in the state House know that Maine needs this exemption to spur additional solar development.

Sales Tax Exemption

None

Grade: F

Maine's Solar Sales Tax Exemption grade

The best states for solar exempt the purchase and installation of panels from any state sales tax. Unfortunately, that’s not the case in Maine, where you’ll pay a premium of 5.5% on your system.

Learn more about tax exemptions for solar

Low-income Solar Programs

None

Grade: F

Maine's Solar Sales Tax Exemption grade Learn more about low-income solar programs available in the U.S.

The consensus on Maine solar power rebates and incentives

When it comes to states that get a lot of sun, Maine isn’t on the top of the list. But thanks to some smart policymaking by the state government, Mainers can still benefit from home solar panels! We’re pleased the days of Paul LePage are behind us, and encouraged by the recent improvements to Maine’s renewable standard law and net metering.

Here’s to many sunny days in your future, Maine!

13 thoughts on “2020 Guide to Solar Panels in Maine | Incentives, Rebates, and Tax Credits

  1. Avatar for Leslie Leslie says:

    We’re confused as new solar panelers – how does the CMP delivery fee factor in when we generate electricity?

  2. Avatar for Nancy Nancy says:

    Have Maine’s solar policies changed since your analysis? Thanks.

  3. Avatar for jen jen says:

    Hi –

    I have the opportunity to purchase a home that currently is not powered by our local power company.
    It does not currently have electricity, so I would like to know the cost of installing both a stand alone 2kW solar power system with battery bank for 35-40 kW/day usage.
    I would also like to know the cost of a grid tied 2 kW solar power system, with the potential to add a batter bank.

    Also, being able to add a 1-2kW wind turbine. If you do wind installations.

    Thanks!

  4. Avatar for Terry Terry says:

    Haven’t you folks heard of solar LEASING?
    No upfront investment, no need to become a financial expert to justify your investment.
    No waiting for rebates.
    No headaches with the city and the utility; let us handle the engineering, procurement, and construction.
    With our flat monthly rent and our “Performance Guarantee” you can generate your own, renewable electricity and pay for the rent with your savings. Since your Agreement will show the amount of energy your system can generate, it is simple to calculate your savings.
    Hassle-free operating and maintenance; it’s handled by the experts.
    Actual hedge against future utility price increases: you can “lock in” your rates for the electricity generated from the solar system at your home for a period of up to 10 years, far longer than the guaranteed rates offered by other electricity providers.

  5. Avatar for Anthony Ball Anthony Ball says:

    Besides 54k being really high, especially without batteries for net metering, if you do the math specified, 1,300 * .143 * 12 months is $2,230, making the payoff more like 20 years assuming rising prices.

  6. Avatar for Anissa Roberts Anissa Roberts says:

    As a Maine homeowner I am very disappointed that Maine does not have better incentives. It seems to me that as usual the legislature has neglected to factor in that about 90% of Mainers live at or below the poverty level but that does not mean we don’t own homes. Being one of those I would love to be able to go solar, but the cost is just too overwhelming.

  7. Avatar for kj kj says:

    horrible incentives for such a tree hugger state. Maine needs to put its money where its mouth is….

  8. Avatar for Guy Marsden Guy Marsden says:

    I take issue with your assumption that a Household uses 1300KWH a month! That’s more than 2X our consumption. There’s no point in installing solar if you haven’t already reduced your consumption to the bare minimum by addressing energy efficiency.

    I live about 30 miles north of Portland, Maine. I’m installing my own 3.6kW system at a cost of about $21,000. Our monthly electric consumption is about 550KwH, so this will cover a significant portion of our energy needs on an annual basis.

    1. Avatar for Tor a.k.a. "Solar Fred" Tor a.k.a. "Solar Fred" says:

      Guy, you’re absolutely right. We use a lot more electric air conditioning out here, so it’s probably not a good comparison for Maine, which I’m sure relies more on gas heating.

      Reducing energy consumption as much as possible is key, especially with Maine’s state rebate only being $2000. But everyone has the Federal government’s 30% tax credit to take advantage of until 2016, so that’s a significant chunk there in addition to the $2000 from the State o’ Maine. Thanks for your comment.

    2. Avatar for David polizzotti David polizzotti says:

      I use a lot more than the average so I put in a system that will generate that usage. What harm am I doing the sun is free.

  9. Avatar for Cal Cal says:

    Wow someone uses 700kw per month, gasp. I have consistently used less then 150 in fact often do not break 100kW per month. Obviously I heat with other then electric but the biggest thing people need to do is search out why they are useing so much. I would be ashamed to use what so many use. Also do a little math there is no way solar works from a capitaliztion standpoint. There is too much math for the involved for this space so; Lets assume $54,000 cost, 12.5 cents per kW (maine is high) no loan you have the cash. Since paying cash we will ofset inflation because you are not earning money. At 1000 kW per month that is 36 years of prepaid electric service. Average system life is still only 15 years. So solar even after credits will cost you 240% more then current supplies. While I would love to see solar work and it might in the future no business should ever get a subsidy. Business needs to succeed or fail on its own merits. Wind and tidal have a great potential even though wind is still costing 130% premium.

  10. Avatar for Mike White Mike White says:

    The Maine Renewable Energy Sources Act, a feed-in tariff bill has been submitted this session 3/24/09.

  11. Avatar for henry fossett henry fossett says:

    Ive just started researching this alternate power source, but either i’m reading things wrong, or maybe theres just confusing terms here: First, my house used about 700kwh last month, so what good is it for me to max out the credit allowance and get a system that peaks 100kw? also, I was just researching a system that will give me about 1000kw a month, but needs 312sqft of roof, why does this 100kw system need 700sqft? thats a pretty big roof (and likely one side, too)

    While this tax credit is a nice gesture, its just that, a gesture. How is it that the power company gets to keep my overage free of charge? I’m sure they will be charging the next person down the line recieving it the going rate. With only 100kw max (for the credit), I wont likely be seeing any overage anyway, like I stated earlier, my house runs about 700kwh… Whats a 100kw equal? a fridge and a nightlight? I truly hope it is a misunderstanding of terminology here, as it seems like this credit is not designed to get Mainers off the grid, but mainly to satisfy a special interest group that dabbles in solar power. (I realize the author(s) of this page merely report what is, I am simply trying to express what a lot of other people I have spoken to about this have opined)

    I also would like to point to the wide range in estimating the payoff timeframe. 2-13 years? why such a large gap? I’m sure there are a lot of reasons for this; A list of pros and cons to solar power in Maine would be nice, with a more detailed reason for the huge estimate swings; some insights on living with solar power in a State with such seasonal and daylight availability as we have here. How about some input from some of our neighbors who have taken the plunge, so to speak.

    I am still investigating this as an feasible alternate energy source, but until the average person gets some serious cost relief from the massive initial installation layout and some long term incentive (like getting a check from CMP for all overages), It is simply out of reach for most of us in the short term, and the long term payoff for running and maintaining a system is too little, too late.

    Thank you for your time, Henry Fossett

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