Maine's controversial subsidy program for commercial solar developments is coming to a close, following the passage of a law that stops new developments from receiving benefits and slashes compensation for existing solar farms.
About six years ago, lawmakers expanded Maine's Net Energy Billing program to encourage renewable energy in the state. And it worked — too well, some argue.
"The goal in 2019 was to build 750 megawatts of solar," said Maine Public Advocate Heather Sanborn. "And we have built 1,600 megawatts of solar under that program."
Net Energy Billing allows residents and businesses to install on-site solar power, then get credits on their electric bill for power they don't use and is sent back to the grid.
The expansion allowed bigger solar developments up to 5 megawatts to take advantage of that benefit and increased the number of customers each array could serve.
That led to an explosion of solar construction across the state, as solar companies rushed to capitalize on specialized electric rates subsidized by electric customers.
The expansion soon became a political flashpoint, as costs of the program rose.
Part of the problem, Sanborn said, is that the program rates were based on overall electric prices and so soared along with spikes in the price of fossil fuels or expensive storm recovery.
"The solar farms should have a predictable compensation structure but not one that is driven up by things that are not related at all to things they should be compensated for," she said.
In 2025 alone, ratepayers were on the hook for $234 million to cover the program, Sanborn said.
So lawmakers slammed the brakes with LD 1777 which was signed into law by Gov. Janet Mills in late June.
Under the measure, new developments have until the end of 2025 to enter into the net energy billing program.
But it also cuts compensation for existing solar arrays by about 20%, according to the Office of the Public Advocate. And it adds new fees for community solar farms to offset their expense to ratepayers.
And the law decouples rates paid to program participants from overall electric prices, Sanborn said.
"That’s going to give us some really important ratepayer savings and some certainty going forward that solar costs are going to continue to spiral out of control," Sanborn said. The changes do not effect net energy billing for on-site solar such has residential rooftop arrays.
But to some developers, the changes are a betrayal. Gregg Felton, CEO of Altus Power, a Connecticut-based solar developer, describes the changes as "a rug pull."
Felton said it is shocking that Maine lawmakers reneged on a compensation arrangement enacted to entice developers into the state.
"That's something that doesn't happen. It is viewed as un-American and, in this case, illegal," Felton said.
Altus built a dozen solar projects in Maine under net energy billing, according to Felton. The company and other developers invested billions into the state and financed projects expecting stable, long-term revenue, Felton said. Now some developers and solar farm customers are left holding the bag, he added.
"The change here is not modest. It is dramatic. They are materially impacting economics of these projects such that they are not able to support the debt," Felton added.
Some developers accept that compensation has to be limited to keep electric rates down. And that reigning in commercial solar developments may be preferable to proposals that would eliminate the net energy billing program entirely, including for homeowners and businesses.
But Eliza Donoghue, executive director of the Maine Renewable Energy Association, said the rollbacks send a disturbing message to future investors that Maine won't stand by its commitments.
"They are no longer going to see Maine as a safe, reliable place to invest the real capital that we need in our clean energy transition," Donoghue said.
And Donoghue said Maine is abandoning its commercial solar program at the same time as Republicans in Congress and the Trump administration are taking aim at renewable energy, including by gutting tax credits for developers and homeowners in their signature "big beautiful bill" recently signed into law.
"I think there is generally wide agreement on the egregiousness of what's happening on the federal level in regards to the clean energy policy," Donoghue said. "Then for Maine to be piling on top of that? It's a really troubling mix."
Under the new law, Maine energy officials have until September 2026 to come up with a renewable energy incentive plan to replace the net energy billing expansion.
