Maine Solar Rebate Program Offers a Bright Start

Maine's first solar energy rebate program in decades passed the legislature on June 17 and was signed into law on June 29 by Governor John Baldacci, one of its major proponents. The rebate should cover approximately 25% of the cost (including installation) of the average-sized residential or small business solar electric or solar thermal system, making it one of the more aggressive solar rebate programs available in U.S. states.

While the law will not take effect until ninety days after signing, the Solar Energy Rebate Program will apply to solar electric and solar thermal energy systems purchased after July 1, 2005.

And it's already having an impact, according to solar installers in the state. In addition to the strong recent sales, Inoue has been fielding many calls from inquisitive Mainers considering whether this is the time to get their own solar system.

"People have been really waiting for something like this," Inoue said. "We've asked for it, the Governor has been asked, and now here's the chance. Now's the time to walk your talk."

The reality, however, is that if hundreds of Mainers all wanted to go solar now that their state has a rebate program, many would not get a rebate before the funding for the program ran out. While he's very pleased for the new rebate program, Inoue admits that the bill's funding level is limited, especially for solar electric systems.

A total of $500,000 in existing funds will be available for rebates annually. The yearly pot of money is replenished using a current surcharge on all Maine consumers' electric bills. With an average household using approximately 500 kWh per month, the charge amounts to just under 75 cents, according to Beth Nagusky, director of the Gov.'s Office of Energy Independence and Security.

That $500,000 includes a cap of 25 percent, or $125,000 for solar PV systems, with the remainder for solar thermal. Solar electric systems qualify for a rebate of $3/watt on the first 2,000 watts of installed capacity, and $1/watt for the next 1,000 watts.

In practical terms, those funding rebates of $7,000 a piece would be wiped out after being applied to roughly 18 solar electric systems costing an average $25,000 a piece. How the exactly the money will be disbursed will be determined by the Maine Public Utilities Commission that will complete all the rules this summer. Qualified installers must set up the systems.

(If you would like to participate in, or track this rulemaking proceeding, or want to find out more about the installer requirements, go to the MPUC link at the end of the story).

The PV funding limitation isn't a big deal though for Nagusky who said that that state officials determined that solar hot water systems (solar thermal) offered a better return on investment. And despite solar electric systems often taking the media limelight, most solar and renewable energy advocates do concede this fact. Others simply call it apples and oranges, electricity and hot water.

Under Maine's rebate program, solar thermal systems designed to heat water and air qualify for a rebate of 25 percent of the cost of the system, or $1,250, whichever is less. As opposed to solar PV systems, which provide electricity, but often average around $25,000, solar thermal systems can provide the bulk of a home's domestic hot water needs (not heating) and typically cost around $5000. And with those smaller rebates, and a larger cut-out of the yearly funding, approximately 300 solar thermal systems per year could secure a rebate.

With solar PV systems fetching a much higher price, Nagusky believes solar thermal systems are the best focus for their rebate program and the best match for your average Maine residents who could not afford a solar electric system.

"We also think that there was a concern at the legislature to not create a lot of free riders," Nagusky said. "We don't want to give the rebates to millionaires."

Millionaires or not, one group of Mainers looking to tap into that small pool of solar electric funding won't qualify. The solar PV funding is limited to grid-connected systems, which take advantage of the state's net-metering legislation allowing extra energy from a solar electric system to be put back into the grid at retail market prices. While these are increasingly popular throughout the U.S., and especially California, Floyd Severn, owner of Maine Solar, a solar systems installation company based in Starks, believes this is the wrong way to go in a rural state like Maine.

"It's a good step, but I think they needed a little bit more information, more input from contractors who do this work on what's out there and what works the best," Severn said.

Severn, who admittedly secures as much as 90 percent of his business from off-grid projects, believes the best use of solar electric systems is for off-grid applications where the cost of running power lines out to a remote property or island is prohibitively expensive. And those are two things that Maine has a lot of.

"I wish they had put something in for standalone systems," Severn said. "There's a lot of remote areas out here and a lot of people move here for the remoteness."

Plus, like any solar traditionalist, Severn reminds that grid-tie systems have no storage capacity for the power and are at a disadvantage when the local grid power supply is down.

Despite the bill largely missing his market, Severn does see it as an essential first step and has seen a similar flood of phone calls like his counterpart, at Solar Market.

These intracacies, and funding limitations aside, some feel that tapping solar resources is simply the Maine way of doing things.

"Ignoring a free source of energy -- the sun -- in not the Maine way of doing things," said solar homeowner William Lord in earlier testimony before Maine's Committee on Utilities and Energy. "We pride ourselves in spending our money wisely. Embracing a technology that utilizes free energy, delivered to the home or business each day at no cost is not only Yankee-smart but is increasingly acknowledged by oil corporations, particularly British Petroleum, to be a necessary part of the future energy mix of our nation."

For more information, or to participate in or track this rulemaking proceeding, please go to the MPUC link below.