Maine Community Solar Policy Guide for Asset Owners & Developers

Everything you need to know about Maine’s current community solar legislation, eligibility rules, crediting mechanism, and other important market details, created by Perch’s internal policy team. We help asset owners navigate the growth of community solar in markets across the country, and as new laws are considered and passed, Perch will provide updates and perspective on how it impacts your business.

Share

Lighthouse on the coast of Maine

1. Maine’s Community Solar Program

Community solar in Maine has gone through significant but not insurmountable growing pains since the first net-metering policy was implemented in 2011. The previous governor was an outspoken opponent of renewable energy and under his tenure community solar, and clean energy in general, languished. Net metered projects were limited to 660 kilowatts (kW) and limited to just 10 customers.

In 2019 when the current governor took office, legislation governing community solar (called LD 1711) moved forward expanding project size and eliminating the customer cap, and established the Net Energy Billing (NEB) and Distributed Generation (DG) programs. In the same year legislation passed to increase Maine’s Renewable Portfolio Standard (RPS) to 80% by 2030, and 100% by 2050.

The DG program was initially intended to accept community solar procurements in five blocks of several hundred megawatts (MW), but the procurement process was ruled non-competitive by Maine Public Utility Commission (MPUC), and the legislature eliminated the DG procurement plan and instead capped the NEB program at 750 MW in 2021.

At present, a stakeholder process being led by the Governor’s Energy Office for revisions to the DG program is supposed to have recommendations for the legislature by 2023. Additionally, the MPUC is holding a rulemaking to make changes to the current tariff rate in the NEB program.

Though Maine's community solar program has had a shakier start than other states, there is still a significant opportunity to share the benefits of renewable energy with many customers, particularly in the NEB tariff program. There is momentum for Maine to have a single incentive program instead of the two it currently has, and a focus on ensuring projects are not clustered and are more distributed over the grid, easing the stress on transmission and interconnection.

2. Program & Project Specifications

Project Requirements

  • Maximum capacity of 5 MW
  • Minimum capacity of 2 MW
  • The customer and project must be in the same utility territory

There is no program capacity limit and unused credits expire after 12 months. Instead, there was a retroactive cap allowing projects that had an Interconnection Agreement (IA) or an NEB Agreement by December 31, 2020. These are some factors used in determining which projects move forward:

  • Cap on NEB development at 750 MW
  • Projects that were at least 90% subscribed were eligible
  • “Good Cause” exemptions due to external delays outside of the entity’s control may be granted by the MPUC

There are no low- to medium-income (LMI) project requirements or specifications in Maine. However, there is an arrears management program that allows utilities to take unused bill credits from the previous year and apply them to eligible participants of the program in a dollar amount.

3. Net Energy Billing Program

The NEB program is divided into two discrete programs: a Kilowatt-hour program for all energy customers, and a Tariff program for commercial and industrial (C&I) customers only.

Kilowatt-hour program

  • The kWh program is utilized by residential, commercial, and industrial customers and directly reduces the total kWh (usage) on a customer’s bill, instead of showing a financial discount.
  • Must provide kWh credits on participating customers’ electricity bills
  • Applies to both shared solar and rooftop solar

Tariff Rate Program

The tariff rate program is available to C&I customers and provides dollar credits on their electricity bills. These rates are determined annually by the MPUC.

  • Individuals may choose to have their own projects installed or share in a project with other commercial or industrial customers
  • The tariff rate is recalculated every 12 months and begins on January 1st of each year
  • C&I customers may accumulate unused bill credits and apply them against their bill over a 12-month rolling period after which they expire
  • The customer will receive no compensation for unused bill credits
  • These bill credits cannot cause a customer’s utility bill to decrease below $0 in any given billing period

These are the current rates for 2022 in the tariff program:

Customer Class  Central Maine Power  Versant – Bangor Hydro District Versant – Maine Public District 
Small Commercial   $0.192834 per kWh  $0.207552 per kWh  $0.184707 per kWh
Medium Commercial or Industrial $0.188937 per kWh $0.202088 per kWh  $0.178505 per kWh
Large Commercial or Industrial $0.145562 per kWh  $0.174322 per kWh $0.205990 per kWh

A current MPUC rulemaking is considering, and will likely adopt, a tariff rate for the small commercial rate class consisting of 75% of the effective transmission and distribution rate, and the standard office service rate for projects in operation as of September 1, 2022.

For all other projects the tariff rate for credits received in 2022 shall be the applicable tariff rate established by the MPUC for NEB credits received during calendar year 2020. Beginning on January 1, 2023, and for each year after, the tariff rate shall be increased by 2.25% each year.

4. Distributed Generation Program

Maine has been working on a new policy for its distributed generation (DG) and is in the process of crafting it to best suit the energy needs of Mainers. The Distributed Generation Working Group is developing a successor program in Maine for 2024-2028 with a final report due at the end of this year.

LD 1711 called for the procurement of a total of 375MW of distributed generation resources by July 2024, through five separate procurement blocks. For projects awarded under the procurement, Maine’s electric utilities agreed to enter into 20-year contracts with projects awarded under the procurement, at the contract rate established for that particular block.

But when it came time to procure projects, the MPUC determined bids were non-competitive and reported this to the legislature, which suspended this element of the program.

5. Market Analysis

For both programs, additional challenges exist from utility interconnection delays and a long backlog of projects. There were more than 1000 MWs of projects that met the eligibility criteria – an executed IA – than the 750 MW target.

Crafters of Maine’s program likely did not anticipate the massive amount of interest in community solar from developers. But with new stakeholder recommendations for the legislature upcoming and significant participation in the NEB program, a revamped program in Maine is on the horizon.

Electric utilities and their territories:

  • Central Maine Power (CMP) ~ 646,000 customers, an Avangrid subsidiary
    • Based in Augusta, and services the more heavily populated southern part of the state including Portland
    • Represents about 80% of Maine's customer base
  • Versant Power ~ 159,000 customers
    • Comprised of two service districts – the Bangor Hydro District in central Maine, and the Maine Public District which is rural and abuts New Brunswick, Canada

6. Appendix

Versant Power Service Territory Map
Source: Versant Power
Central Maine Power Service Area Map
Source: Central Maine Power

Anticipated Developments:

  • NEB C&I Tariff changes: September 1st, 2022
  • Distributed Generation Stakeholder Group second report: By 2023
  • Tariff rate change: January 1st, 2023

Laws, rules, and reports relating to Maine’s community solar program

  • LD 1711 - An Act To Promote Solar Energy Projects and Distributed Generation Resources in Maine
  • LD 936 – amended 1711 to remove DG procurement and set a cap
  • Chapter 313 – Rules for net energy billing
  • Interim Report – DG Stakeholder Group tasked with formulating a successor program
  • Interconnection rules

Other state community solar policy guides from Perch


Share

More Blogs

Get matched to a local solar farm and save on your electricity costs.