Solar Power Is Growing in Maine. Here's What You Should Know About Pricing and Incentives

Maine is a smaller state in terms of solar power, but has a lot of potential for growth. 

With 612 megawatts of solar power currently installed, the Solar Energy Industries Association predicts Maine will add another 1,539 MW of solar capacity in the next five years. Residential electricity rates in Maine tend to be higher than the national average, in part because the state does not generate much electricity. A report from CNET's sister publication SaveOnEnergy shows Maine residents paid 43% more than the US average in November 2022. Natural gas makes up about 24% of Maine's total energy production, yet natural gas rates in Maine are often much higher than the US average.

While energy rates in Maine are high, the state's average energy usage is low, meaning electric bills were cheaper compared to those from many other states. Lower usage also means Maine residents could cover all of their energy needs with a smaller -- and therefore less expensive -- solar panel system.

According to the Energy Information Administration, residents of the Pine Tree State paid an average electric bill of $133 per month in 2022 or $1,596 over 12 months. Electricity rates increased significantly last year. In November 2022, residential energy rates in Maine were 33% higher than in November 2021. 

If you are considering solar panels, your potential savings with solar could continue to increase into 2023. According to the Solar Energy Industries Association, the cost of residential solar panels in Maine has dropped by almost 52% in the last 10 years. Tax credits and rebates can lower the total cost even more. If you live in Maine, solar panels could help you gain more control over your energy costs in 2023 and beyond.

Best Solar Companies of 2023 See at Cnet

Average cost of solar panels in Maine

Here's a look at the average cash price for a 5-kilowatt system before factoring in tax credits incentives, according to data from FindEnergy.com.

How to pay for solar panels in Maine 

There are financing options to make the switch to solar affordable. While some residents buy solar panels upfront, others finance them over time with a solar loan. It's also important to factor in the solar payback period, which is the time it takes to recoup your upfront investment and when savings begins. 

Here are some ways to pay for solar panels:

Solar loan: Your solar installer likely has a relationship with a bank or other financial institution to offer a loan designed for solar panels. This can be a great deal, but you'll want to get multiple offers to ensure the rates and terms are the best.

Lease or power purchase agreement: Some solar companies allow you to lease your system or enter a power purchase agreement. If you choose to lease, you won't own the solar system, you'll just pay for use of the equipment. Entering a power purchase agreement means you'll buy solar energy generated from the solar company to power your home. The price you'll pay is usually lower than the retail rate from your local utility company. Note that not all incentives are available with a lease or power purchase agreement.

Cash: This approach only works if you happen to have thousands of dollars sitting around in a bank account. If you don't have that yet, but you want solar panels in the future, consider saving money in a high-yield savings account. Interest rates are high right now, and this can help you save faster.

Home equity: You don't have to use a loan from your solar company. Financial institutions offer home equity loans and lines of credit (or HELOCs) that are commonly used for home improvement projects. These loans can be used for basically any purpose, and they may be a good fit for your solar project. Shop around and make sure you're getting the best deal.

Personal loan: You can also borrow the money through a personal loan. The main difference between a personal loan and a home equity loan is that a personal loan is typically unsecured. That means your house isn't at risk. The downside is they tend to have shorter terms and higher interest rates than home equity products.

Solar panel incentives and rebates in Maine

While solar panels have dropped in price in the last 20 years, purchasing rooftop solar is still a big investment. You can find solar tax credits and incentives at the federal, state and local levels to help make solar panels more affordable.

One of the largest tax credits is the residential clean energy credit, previously known as the investment tax credit or ITC. The residential clean energy credit is a federal solar tax credit that credits 30% of the cost of your solar panel system when you file your taxes. It's offered in all 50 states and was increased and extended when the Inflation Reduction Act was passed in August 2022.

Based on the average cost of solar panels in Maine, the federal tax credit alone could save you $9,675 and bring the average price of solar panels down to $22,575. There is no cap on this tax credit, so you can claim the full 30% no matter the size or cost of your solar system.

To apply for the residential clean energy credit, fill out IRS form 5695 (PDF). The IRS offers instructions on how to fill out the form.

There are also a few state-level solar incentives in Maine. For starters, the state offers a property tax exemption on solar panels for residents who purchase their system. Maine residents can also participate in net metering programs. Net metering lets consumers sell excess solar power generated by their system back to the grid in exchange for credits on their energy bills.

Community solar, which is growing quickly throughout the state, is also available. With an active utility account, you can buy solar power produced at another location for about 10% to 15% cheaper than the standard electric rate. While there is still room for expansion, community solar will likely continue to grow in Maine.

Maine solar panel companies

According to the Solar Energy Industries Association, there are approximately 57 solar companies operating throughout Maine, giving you the choice of a variety of solar installers. CNET compiled a list of solar panel companies that stand out in the industry. Here are a few Maine solar installation companies to research.

Maine Solar Solutions

Maine Solar Solutions is a local company operating only in the Pine Tree State. While most of its customers choose to keep their system tied to the power grid, Maine Solar Solutions does offer off-grid solar, too. (You can only participate in net metering programs if your system is grid-tied.) You can purchase your solar panels or finance them through a solar loan.

Maine Solar Solutions sources its solar products from manufacturers including REC, Hanwha Qcells, Silfab Solar and Tesla. All of the solar panels it offers have a power output warranty for 25 years and all inverters are warrantied between 10 and 25 years. Maine Solar Solutions also offers a 10-year quality-of-work warranty.

ReVision Energy

ReVision Energy is a New England-based solar installer operating in Maine, Massachusetts and New Hampshire. Founded in 2003, this installer has completed nearly 14,000 solar projects in the New England area. Currently, ReVision Energy customers can purchase their solar panels upfront or finance them over time with a solar loan.

ReVision Energy offers solar products from Qcells, REC, Tesla, Generac and other manufacturers. Customers can also choose between rooftop and ground-mounted solar panels. Rooftop solar panels are most common, but a ground-mounted system may work if you have the space and your roof is unfit for solar panels. ReVision Energy provides a 5-year quality-of-work warranty and chooses solar panels with a 25-year production warranty from the manufacturer.

SunPower Solar

SunPower Solar offers the most efficient solar panels on the market and strong warranties. The SunPower Equinox solar panel has an efficiency rating of up to 22.8%. Customers who choose SunPower can opt for the Equinox package, which includes Maxeon solar panels and Enphase microinverters. 

SunPower guarantees its solar panels will produce at 92% or more of their original capacity for more than 25 years. It also provides a 12-year roof warranty and 10-year product warranty for monitoring equipment.

Installation factors to keep in mind

Investing in solar panels is a big decision, so you should consider all elements that could determine whether it's the right move for you. Keep these factors in mind.

Is your roof right for solar? Some roofs may not be in the right condition for efficient solar panel installation. The size, shape and slope of the roof will affect how much power the system can produce. According to the Department of Energy, solar panels will be most efficient on roofs with a slope between 15 and 40 degrees. You should also consider the age and condition of your roof. If it is older or in need of maintenance, your roof should be replaced or repaired before installing solar panels.

Does your neighborhood allow solar panels? In some states, home owners associations have the power to prohibit solar panel systems. Maine law states that homeowners associations and neighborhoods are not allowed to ban solar panels, but may be able to influence your system's design or location. Check your homeowners association bylaws before entering any agreement.

Can you add your panels to your insurance policy? Most standard homeowner's policies cover rooftop solar panels, so you shouldn't need to take out a separate policy. After installing your panels, contact your insurance agency to update your policy. The specific details of your policy could vary depending on your coverage.

Is your location right for solar? On average, Maine receives 192 sunny days per year, which is slightly lower than the US average (205 days). Solar panels are designed to produce energy in all climates and areas with less direct sunlight. One rule of thumb says that solar panels make financial sense if they receive at least four hours of direct sunlight a day. If you live in a cloudy region of Maine or your roof gets constant shade coverage, a solar panel system won't produce as much electricity as it would in direct sunlight.

Do you rent your home? Renters will need to check with a landlord or rental management company to confirm whether solar panels are allowed. If not, you can consider community solar programs as an alternative to rooftop solar. Community solar is a good option for renters because your subscription can align with your lease. The solar energy is produced at another location, so there's no need for installation at your apartment or rental home.

Maine solar power FAQs