Maine Solar Incentives, Tax Credits & Rebates (2024 Guide)
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Maine has a few solar incentives to help you save money on installing a solar panel system and reduce ongoing electricity expenses. The state has a high electricity rate but an average solar system cost of $17,550.* That’s lower than the national average, making it a good state for switching to solar.
We recently researched the best solar companies nationwide and compared them on warranty coverage, price, customer reviews, and more. We also learned about the solar incentives each state offers its residents to help them save money on solar equipment. See which solar incentives Maine homeowners can get below.
*Cost data via EnergySage
What Are the Available Solar Incentives in Maine?
Maine doesn’t have as many solar tax credits and rebate opportunities as some sunnier states, but residents can take advantage of a few ways to save money when investing in solar panels.
Efficiency Maine Home Energy Loan Program
The Efficiency Maine Trust is a part-independent, part-state agency that supports energy efficiency programs in Maine. Efficiency Maine offers home energy loans, called Property Assessed Clean Energy loans (PACE), to help low-income homeowners pay for energy upgrades such as installing solar panels. The loans are without fees and with interest rates as low as 5.99%.
Eligible participants must:
- Legally live in Maine
- Be applying for solar upgrades on a residential, not commercial, property
- Have a minimum credit score of 580
- Have a maximum debt-to-income ratio of 70%
- Have no recent bankruptcies, foreclosures, or repossessions
An Efficiency Main Residential Registered Vendor must install the upgrades. You can apply on Efficiency Maine’s website. A program administrator will walk you through the next steps if you’re approved. This includes verifying your income, employment, and residence and choosing an approved installer.
We like this program for its ability to help low-income homeowners make an investment that can increase their home value and one day eliminate or reduce their electricity bills without making a large up-front investment. However, PACE financing adds your monthly loan payment to your property tax bill. That means your annual property tax bill will be a larger lump sum, but it’s still far cheaper than paying for a solar system in full up-front. The savings you see on your utility bills should offset the larger tax bill. We recommend this option over a solar lease since you’ll own your system from day one.
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Maine Property Tax Exemption
Installing solar panels increases your home value, according to a Zillow report. That usually means higher property taxes. However, Maine is a state that waives property tax hikes due to solar-based home value increases. Some states want to encourage adopting solar energy solutions because they reduce the load on the local electric power grid and residents’ carbon footprints through renewable resources.
If installing solar panels or other solar equipment on your home leads to a home value increase, the state won’t tax you on the increased amount. You’ll continue paying the same taxes as if you hadn’t installed solar equipment.
This won’t save you money on your system, but it will save you from an ongoing expense that could make your decision to invest in solar energy more appealing.
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How Does the Federal Solar Tax Credit Work?
The federal solar investment tax credit (ITC) is the most financially rewarding incentive for solar buyers. The ITC is the basis of a nationwide government program that allows you to claim a percentage of your solar energy system’s cost on your federal tax bill the year you install it. The percentage has changed since the program’s origin in 2005 but will remain at 30% through 2033. This gives homeowners the chance to save thousands of dollars.
This tax credit is not a reimbursement but rather a decrease in how much you owe on your tax bill. Additionally, If you don’t owe anywhere near what 30% of your solar expense equals the tax season after your solar installation, you can roll the credit over to the following year. For example, say your total solar expense is $15,000. Applying the federal tax credit would reduce it by $4,500. If you only owe $1,500 on your federal taxes the first year after you install, you can roll over the remaining balance to the next year.
Only those who own their system qualify. Those who financed their system through a solar lease or power purchase agreement (PPA) aren’t eligible. You can claim the solar tax credit when you file your yearly federal tax return, and you should let your accountant know in advance. You must complete IRS Form 5695 if you file your taxes yourself.
Does Maine Offer Net Metering?
Net metering is another way Maine homeowners can save. It doesn’t shave money off up-front but reduces ongoing utility expenses. Most solar buyers have on-grid solar systems, and they send excess power to the grid when their system is producing more than their home is using. Net metering means they get a one-to-one credit for this excess power to offset their electricity consumption at night and on cloudy days. This prevents you from paying out of pocket for times when you rely on the utility grid.
Learn more about the state’s net metering programs through the Maine Public Utilities Commission.
How Much Do Solar Panels Cost in Maine?
Maine doesn’t offer as many solar incentives as other states, but the cost of installing solar panels is lower than the national average. The national average system cost is $20,650, according to EnergySage. The average cost of solar panel installation in Maine ranges from $14,918–$20,182 for a 5-kilowatt (kW) system. You can get a customized quote by contacting a solar company in your state. Read our guide on the best solar companies in Maine to see them all.
Is Going Solar in Maine Worth It?
Going solar in Maine is worth it. The Pine Tree State has one of the highest electricity rates in the country, so residents stand to see big savings by reducing their dependency on the power grid and relying primarily on solar energy.
Our Conclusion
Maine is a great state to switch to solar power because of its generous solar incentives and lower installation costs. Start by looking at your typical energy usage and getting a quote from a reputable solar company in your area.
Our research shows that the best solar companies in Maine are Summit Energy, and Maine Solar Solutions. We recommend carefully reviewing each company’s policies, warranty coverage, and customer reviews before reaching out. We also suggest getting a quote from at least three companies before deciding.
FAQ About Solar Tax Incentives in Maine
Does Maine offer a state solar tax credit?
Maine doesn’t offer a state-level tax credit for solar buyers. However, the federal tax credit allows home solar system owners to make back up to 30% of their solar investment through their federal tax bill.
Can I get free solar panels in Maine?
Yes. You may be eligible for a free solar panel installation in Maine, but you’ll still have to pay for the energy the panels generate. Some Maine solar companies offer solar leasing or PPA programs in which they’ll install the panels for you at no cost, but you’ll still need to pay them leasing fees or for the energy the panels produce.
What is the new President Biden solar incentive?
President Biden’s Solar for All Justice Initiative aims to ensure that disadvantaged communities that are underserved and overburdened by pollution receive 40% of the overall benefits of certain federal investments. The program supports the move toward solar energy use to reduce carbon emissions in these areas between now and 2035.
Our Rating Methodology
We are committed to providing comprehensive and unbiased reviews to our readers. After over a thousand hours of research on solar companies, interviews with experts, and common customer needs, we’ve created a detailed rating system for solar providers based on six factors:
- Solar equipment, installation, and services (25%)
- Warranty and performance guarantees (25%)
- Brand reputation and certifications (15%)
- Financing options (15%)
- Experience (10%)
- Availability (10%)
Total scores are divided by 20 for a final 5-point rating scale.
To share feedback or ask a question about this article, send a note to our Reviews team at reviews@thisoldhousereviews.com.
