This solar array between Route 26 and the Maine Turnpike in Gray has 14,000 panels covering 20 acres. The 6.5-megawatt array constructed by ISM Solar can power up to 2,000 homes. Gregory Rec/Staff Photographer

The solar power industry, which has spent millions of dollars taking advantage of a 2019 Maine law meant to spur the growth of local generating farms, is facing partly cloudy skies.

While some community solar projects have come online in Maine, hundreds have languished in studies required to determine how or if the projects can safely connect to the electricity grid. Many developers are now finding that unexpected, costly upgrades will make their solar farms unprofitable. Some developers may try to downsize their projects or even pull the plug before a key financial incentive sunsets at the end of 2024.

“There are tens to hundreds of millions of dollars the development community has to supply to meet the 2024 deadline,” said Alex Schild, development director at Soltage LLC of Jersey City, New Jersey, “and there’s no light at the end of the tunnel.”

The state’s Office of Public Advocate and an industrial energy lobby say a solar scale-back is OK.

Provisions in the 2019 law created too-generous incentives that put a mounting financial burden on electricity customers, which the critics claim will outweigh the benefits of community solar as it’s currently structured in Maine.

Maine residents will begin feeling the impact on their electricity bills on July 1. That’s when an accounting mechanism used by the Public Utilities Commission will fold the payment costs of existing community solar projects into bills for Central Maine Power and Versant Power customers.


The timing is especially bad. Mainers have just endured a winter of record-high electricity supply rates, which were partly fallout from last year’s spike in wholesale natural gas prices.

Here’s how the costs of community solar are breaking down, based on calculations by the utilities.

The average CMP household customer who uses 550 kilowatt-hours of electricity a month will see a monthly increase of $5.70, based on a total of $113.8 million in costs. That figure represents incentives for 240 community solar projects now operating in CMP’s service area, with a total capacity of 276 megawatts.

The average Versant Power household in the Bangor Hydro district will see a monthly increase of $15; the hike will be $11.67 a month for customers in the Maine Public district.

The Versant increases are based on over $28 million of solar incentives and 41 projects with a total capacity of 112 megawatts in the Bangor area. Incentives total $6 million for 37 projects with a capacity of 101 megawatts in northern Maine.

Neither CMP nor Versant, Maine’s two largest electric utilities, generate power. They don’t make or lose money on community solar. They just pass along the power costs to ratepayers.



These solar costs aren’t the whole story, since the increases that customers see on their bills this summer will actually be higher.

Additional costs, chiefly other renewable power contracts, will push the typical 550-kWh CMP customer bill to $9.02 a month. The average Versant Bangor Hydro customer will notice a $15 change, while a Versant Maine Public household will see a hike of around $11.

These new costs will add more pain to already high electric bills – there’s no dispute about that. But the long-term cost of community solar is unclear and hotly debated, with conflicting numbers tossed around amid a shifting business and political landscape.

Estimates revolve around two questions that no one can precisely answer today: How many projects will get built before a key incentive expires at the end of 2024, and how much total generating capacity will they represent? These are critical calculations, because more megawatts of community solar capacity translate into more financial developer incentives, which ultimately are paid by customers.

The numbers keep shifting as new information becomes available. The Industrial Energy Consumer Group, which represents manufacturers and other big electricity users, has been a longtime critic of community solar incentives. The group fears that most projects will eventually come online, and has been circulating fact sheets estimating that Maine customers may have to pay an additional $400 million a year.


The Office of the Public Advocate has been adjusting its assessment downward based on CMP’s and Versant’s new estimates and is now pegging the total cost at $220 million. That could add $23 or so a month to a typical residential electric bill after 2024, the OPA says.

But the solar industry disputes these figures and is pushing back. It says the vast majority of the 800 or so initially proposed projects ultimately will be forced to drop out – maybe 80% to 90% of them.

Led by a national trade group, the Coalition for Community Solar Access, the industry has produced a handout called “The Real Facts about Maine’s Community Solar Program.” The handout says the current impact is closer to $1 a month, although it omits any estimates of future costs.

These wildly different numbers around community solar costs are circulating just as the Maine Legislature is looking at whether to further refine the incentive programs, known as net energy billing, or wait and see how the interconnection challenges play out. This moment represents the latest chance to tweak a policy that came under intense scrutiny and led to changes last year.

Community solar farms, like this 6.5-megawatt array in Gray, have become more common sights in Maine since a 2019 law went into effect. Gregory Rec/Staff Photographer

Community solar programs can give residents without the means or desire to install their own solar panels small bill savings for using cleaner energy while creating jobs and tax revenues and beefing up the electric grid. The program is considered a key component in the state’s plans to fight climate change by moving Maine’s economy away from oil and natural gas.

But any further increase in electric bills this year won’t sit well with Mainers struggling with inflation and a winter of high heating prices. How lawmakers perceive the costs and benefits in the weeks ahead could influence how much solar power is developed in Maine over the next couple of years.


“We’re at a transition point,” said Sen. Mark Lawrence, D-York, who co-chairs the committee that handles energy and utility matters. “We’re going to see how net energy billing is playing out in reality, and what actually is going to get built.”

That’s not exactly what the community solar industry wants to hear. It’s lobbying for an updated net energy billing program that retains enough incentives to keep investors interested in Maine.

“Without a clear signal to the solar marketplace that Maine remains open for the clean energy business,” said Jeremy Payne, executive director of the Maine Renewable Energy Association, “many companies may choose to abandon their project pipelines and pull their investment capital from Maine and redeploy it elsewhere.”

The community solar industry stresses that it’s not to blame for the soaring electricity supply rates shocking Mainers. Spikes in the wholesale price of natural gas are the leading cause, the industry says. Gas fuels roughly half of the power plant generation in New England and prices surged after Russia’s invasion of Ukraine shook up export markets. They’ve settled down recently but remain volatile.

Electricity supply in Maine comes from unregulated generation companies, not distribution utilities such as CMP and Versant. The state’s standard offer supply rate in CMP’s service territory shot up from 6.4 cents per kilowatt-hour in 2021 to 17.6 cents this year. That represents a $61 a month increase for a typical household – roughly 10 times greater than the impact from net energy billing.

Payne said discouraging community solar now would lead to a damaging outcome, “precisely the moment when the state is trying to reshape its energy future to protect consumers from pricing volatility and offering Mainers greater control over the sources of electricity powering their homes and businesses.”



Whatever happens at the State House, community solar developers are trying to navigate a changing landscape.

Novel Energy Solutions of St. Paul, Minnesota, has 70 projects under development in Maine representing 115 megawatts of capacity. But the company has only 20 under construction and one in operation. Novel said it already has invested tens of millions of dollars and is unsure how many projects will make it through long-delayed interconnection studies by the end of next year, and at what cost.

“Even if you can afford to do it, the law will expire,” said David Shaffer, the company’s director of policy and governmental affairs.

In a filing last month at the PUC, Novel laid out the issues facing two proposed 5-megawatt projects in Limington. The filing detailed how CMP’s initial upgrade estimates of roughly $500,000 for each site ballooned last winter to $10 million apiece, with no construction expected until at least 2028.

“This cost, as well as the length of time before those upgrades will be in service, would render Novel’s projects uneconomic,” the company wrote.


Upgrading the grid for multiple projects in that geographic area of southwestern Maine, known as a cluster, will total $247 million, CMP estimated. Novel said that will have a cascading effect on other projects. As some developers drop out, the survivors would have to shoulder a larger share of the upgrade costs. As a solution, Novel is asking the PUC for permission to modify interconnection agreements to downsize the projects to roughly 2 megawatts, which it says could connect without upgrades.

Julie Rosenbach, sustainability director for the city of South Portland, stands near a solar array built last fall on top of the city’s capped waste landfill. Gregory Rec/Staff Photographer

Soltage, the New Jersey developer, has three projects online and eight tied up in studies. It said the costs and timeline delays — and unknown actions by the Legislature to change net energy billing – are creating an atmosphere in which banks and investors will shy away from Maine.

“There’s no certainty, Schild said, “and no bank is going to finance these things.”

Some developers say CMP is dragging its feet on completing the cluster studies, an issue that led to an investigation and settlement last year at the PUC. The utility says it’s doing the best it can amid overwhelming demand and labor and supply shortages. Jon Breed, a CMP spokesman, also noted that the company has created an online heat map to show which parts of its distribution and transmission system can best accommodate new solar connections.

“I would say our role is to safely interconnect,” Breed said. “Some locations, you can interconnect for less money. There’s more room. Others, there’s not.”



The solar industry’s transition is being watched closely by Bill Harwood, the state’s public advocate.

“The timing is really unfortunate,” he said of the increases. “Ratepayers are going to be very unhappy when they get their bills this summer.”

Harwood said he’s concerned that this first sizable impact of net energy billing will accelerate next year, if nothing’s done to further reduce incentives. It may make sense, he said, to return to the policy prior to 2019, when only small rooftop-scale solar projects qualified under the program.

“I feel bad for the solar developers who are caught in these cluster studies,” he said. “But you can’t just by government fiat impose a program and say, ‘it should work.’”

Lawmakers on the Energy, Utilities and Technology Committee are at the forefront of trying to find a path forward for net energy billing. Recently, they considered a bill backed by Republican leadership and presented by Rep. Steven Foster, R-Dexter, who said he felt the current net energy billing program is unnecessary.

At the bill’s hearing, Harwood again sounded his warning on community solar costs. And he highlighted what he saw as major flaws with the current program, which includes locating solar farms too far from grid infrastructure and confusion by customers who sign up for community solar.


“Our office,” he said, “receives a steady flow of NEB customers who are confused and angry because the invoices they receive from the utility and the invoices they receive from the developer do not match up and often seem to be addressing different ratepayers.”

The hearing followed a technical presentation for the committee on April 6, on the interconnection challenges and related costs to developers, consumers and utilities. It featured Philip Bartlett, the PUC chair, and management teams from CMP and Versant.

Referencing the pending July 1 bill impact, Bartlett noted that some of the cost is for solar farms that the utilities expect to be built, but aren’t online this year. It may be possible, he said, to reduce the immediate bill impact by deferring those costs. His agency is studying that possibility.

Attention now turns to what will happen to Foster’s bill and any similar efforts, before the Legislature adjourns. Foster said he isn’t ready to replace net energy billing until he sees how projects in the queue shake out.

Lawrence, the Democratic co-chair, may have a similar view.

“I think we’ll have a clearer indication this year how many projects get through the process,” he said.

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