Your 2019 guide to getting solar panels for your home 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!
** What's new for 2019 **
Known for a bit of everything from beaches to quaint seaside towns and windswept rocky coastlines to fantastic mountain hiking trails and thousands of lakes, Maine is an outdoor wonder. All that wonder is full of energy too. The wind, the tides, and most importantly, the sun are all at work keeping Maine fueled. The real question is how has the legislature done in promoting all the energy that’s just lying around for the taking? Keep on reading to find out.
Recently, the state's Public Utilities commission has come up with a new way for solar owners to get paid back for the power they provide to the grid. News flash: it's less than you'll get for that electricity if you get solar panels installed before it takes effect, so connect with a solar expert today to be sure you'll get the best payments for your solar energy.
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.
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.
|Your Maine Solar Strategy|
|Comparing Solar Investment Options|
|Paying Cash for Solar in Maine|
|Solar Loans in Maine|
|Solar PPAs in Maine|
|Solar Purchase Payback Time in Maine|
|Maine Solar Policy Information|
|Renewable Portfolio Standard (RPS)|
|RPS Solar Carve-Out|
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 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.
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!
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:
40% by 2017
A Renewables Portfolio Standard (“RPS”) requires utilities in the state to eventually source at least a certain percentage of their electricity from clean, renewable sources like solar panels.
Maine has one of the strongest Standards in the nation, paving the way in aggressive renewable policy with a requirement that 40% of total retail electric sales come from renewable resources by 2017, including a 10% requirement “new” resources installed after 2005 that eliminates some of the less efficient and environmentally unfriendly power generation methods. Utilities must currently generate 5% of electricity from these new resources. That requirement will raise 1% per year until the target is reached.The program could be even better if it had specific targets for Maine’s solar panels.
Maine’s RPS is critical to strong renewable energy policy. Utility companies aren't really all that gung-ho about you producing your own power. After all, it costs them money when you use less of their electricity. They also don’t naturally want to give you big payments for energy you're feeding back into the grid. The main reason the utilities are aiding your transition to lower electric bills and offering you incentives to put solar on your roof is because the state forces them to. If the utilities don't hit their RPS numbers, they have to pay large fees back to the state.
What's an RPS? Your state legislature paves the way for strong solar energy incentives to flourish by setting standards for renewable energy generation within their territories. Those standards are called the state’s renewable portfolio standard (RPS). If utility companies do not meet these standards, they must pay alternative compliance fees directly to the state. Many utilities then determine the best ways to source their energy from renewable sources that are less expensive than this fee.
An RPS is a mandate that says "Hey utilities! Y'all now have to make a certain percentage of your electricity from renewable sources. If not, you'll have to pay us huge fines." The consequences are good, because utilities usually try to meet these RPS standards by creating solar power incentives for you, the homeowner. Read more about Renewable Portfolio Standards.
RPS solar carve out
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.
What's a solar set aside? A solar set aside guarantees a specific portion of the overall renewable energy mix generated comes from the sun. For those states with progressive standards, high alternative compliance payments, and clear solar carve outs, the faster those areas become ripe for solar.
Some states have higher alternative compliance fees than others, and some states have more progressive alternative energy standards and deadlines than others do.
For instance, New Jersey has an overall RPS of 22.5% by the year 2021. That requires local utilities to source 22.5% of their energy mix from renewable sources by the year 2021. Pretty good. However, New Jersey also has a specific solar set aside of 4.1% by 2028. That’s the type of firm commitment which really gets the industry rolling forward. No wonder why New Jersey is one of the hottest solar markets right now!
Maine Electricity Prices
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.
Why are electricity prices so important? Because that is what solar power is directly competing against. The cost to produce power with solar is relatively constant (of course how much sun hits your area has an effect), so if you are paying $0.40 per watt for power, then you make FOUR TIMES AS MUCH as the guy or girl paying $0.10 per watt electricity.
The caveat here is that if the $0.10 per watt person has a HUGE rebate, they may be better off than the $0.40 per watt person. Because of that, states without any renewable standards tend to be heavily reliant on cheap coal for electricity, and also have very low electricity prices. When electricity prices are artificially low, that hinders the ability of solar energy to achieve meaningful payback in the state.
Maine Net Metering
Net Metering requires your utility to monitor how much energy your solar power system produces and how much energy you actually consume, and make sure you get credit for the surplus.
Maine currently requires all utilities to offer net metering to individual customers. Net excess generation in any month is credited to your bill for the following month. But that's probably all going to change soon. The Maine Public Utilities Commission has been tasked with comnig up with new rules for solar reimbursements, after the legislature failed to act when net metering limits were recently reached. They've come up with a draft proposal that eases the state into new rules, but it hasn't been adopted yet. No matter what happens, current solar owners will get to keep net metering for at least 15 years, so connect with a local solar expert to see if it's the right time for you to go solar now.
What is net metering? Net metering is the billing arrangement where you can sell excess electricity back to your utility for equal the amount you are charged to consume it. The more customer friendly net metering policies, the higher the grade.
The grade here specifically reflects individual solar system capacity, caps on program capacity limits, restrictions on “rollover” of kWh from one month to the next (yep just like cell phone minutes), metering issues (like charges for new meters), Renewable Energy Credit (REC) ownership, eligible customers and technology (the more renewables the better), being able to aggregate meters across the property for net metering, and safe harbor provisions to protect customers from solar tariff changes.
Maine Interconnection Rules
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.
Interconnection rules are a little technical, but they basically allow you to “plug in” to the electric grid with solar panels on your roof. The more complex, out of date, or nonsensical the state rules are for plugging into the grid, the lower the grade.
Specifically, the grade reflects what technologies are eligible, individual system capacity, removing interconnection process complexity for smaller systems, interconnection timelines and charges, engineering charges, prohibiting the requirement of unnecessary external disconnects, certification, spot interconnection vs. wide area interconnection, technical screens, friendliness of legalese, insurance requirements, dispute resolution, and rule coverage.
Solar Incentives in Maine
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 30% of your 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:
Maine Solar Power Rebates
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.
How do solar rebates work? Similar to getting a rebate card from your local big box store for a dishwasher purchase, state legislatures also provide rebates for solar panel purchases to spur on investment and create new jobs. If you purchase the solar panel system yourself, you qualify for this free cash, which many times is a lump payment back to you. Some solar installers like to take this amount directly off the total installed price, and they'll handle the paperwork for you to make things a lot less complex.
The availability of state and utility rebates were sourced from the Database of State Incentives for Renewables and Energy Efficiency. The better the rebates, the higher the grade.
Maine Solar Power Tax Credits
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 30% federal tax credit to help ease your transition to solar.
About state solar tax credits: State tax credits are not technically free money. However, they are 'credits' and not 'deductions' which means that if you have the tax appetite to take advantage of them, then they can be a 1-to-1 dollar amount off your taxes instead of a fraction of the cost of the system. So that means they can be an important factor to consider. In certain circumstances, state tax credits can provide a very powerful incentive for people to go solar.
(Keep in mind, we are not tax professionals and give no tax advice so please consult a professional before acting on anything we say related to taxes)
The availability of personal tax credits for solar energy were sourced from the Database of State Incentives for Renewables and Energy Efficiency. The higher the tax credit amount, the higher the grade.
Solar Power Performance Payments
Maine currently offers no performance payments of any kind. You're missing the boat, Maine!
Explanation of performance payments: Performance payments represent a big chunk of the financial rationale for going solar, and in many instances they make your decision a wise one. For certain states, if you’ve got solar panels on your roof, not only will you be cutting your electric bill down to size, but you'll be getting paid additional cash from your utility company. Pretty awesome, huh? Not only are you generating electricity for yourself, freezing your own popsicles with sun, and feeling like you’re doing something smart for your children or any of the other 4 reasons people go solar, but you are getting PAID!
Utility companies are paying people with solar panels on their roofs because their states say they have to, otherwise they will pay a fee. Therefore, the payment amount to homeowners is typically a little bit less than the amount they would be billed for by the state. For states with these alternative compliance fees, Solar Renewable Energy Credit (SREC) exchanges have popped up. In the above chart, we outlined an estimate of yearly payments a homeowner might expect from the utility company for the SREC credits from their solar energy system.
Expected SREC payments were calculated by using the latest trade values in the SRECtrade database. The availability of feed-in tariffs were sourced from the Database of State Incentives for Renewables and Energy Efficiency. The higher the expected monthly payments, the higher the grade.
We've got a great article if you like to read more about what SRECs are and how to earn them.
Property Tax Exemption
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.
About solar property tax exemptions: Property tax exemption status is a pretty big factor when putting together your investment considerations. Some argue that solar power adds approximately 20 times your annual electricity bill savings (if you are owning the system and not leasing). Other studies seem to indicate a home price premium about equal to the cost of installing the system, minus any incentives like the federal solar tax credit.
For many average-sized solar power systems on a house, that can mean adding $20,000 to your home value. And if you don't believe us, believe the bean counters: Many banks and solar financing companies now offer traditional style equity-based home loans for installing solar. An additional $20,000 in property tax basis in many states amounts to a big chunk of change owed back to the state. However, many states have complete exemptions from added taxes when you install solar on your home!
The availability of a property tax exemption for solar energy was sourced from the Database of State Incentives for Renewables and Energy Efficiency. Grades in this category are basically all-or-nothing. Either you got it or you don't. Thankfully, many states have "got it.".
Sales Tax Exemption
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.
What's the deal with solar power sales tax exemptions? When states give you a sales tax break on solar, we notice. You should too. State sales tax exemption status for the purchase of solar energy systems were sourced from the Database of State Incentives for Renewables and Energy Efficiency. Sales tax exemptions, if present, were all 100%. A handful of states are completely exempt from sales tax regardless, and therefore received ‘A’ grades by default (OR, DE, MT, AK, and NH).
The consensus on Maine solar power rebates and incentives
Solar policy is a bit stop and go here. The RPS is one of the strongest we’ve seen – a whopping 40% by the not-very-distant 2017. Strong net metering and interconnection laws make sure that you can get onto the grid and take advantage of higher than average electricity costs for higher than average savings. On the other hand, Maine lacks rebates, tax exemptions, and performance payments that have helped promote solar power elsewhere. That kind of mixed policy suggests a mixed grade, and so does that 11-year payback timeframe – not terrible, but certainly not great. Maine ranks in at a “C” for now, but there is room for fast improvement under the umbrella of that strong RPS. We’ll check back in soon and see how solar policy progresses here.
Again, if you are confused about how these numbers work and would like some personalized assistance or a quote of your own, simply connect with our network of solar experts. They’ll help sort out all the pricing, get you access to special deals, and they’re super friendly to boot!