Maine Solar Tax Credit

Going solar is a smart choice even in Maine. It is especially easy when you make use of an Investment Tax Credit that lets you shave off 30% of the PV system’s cost. Here’s an article on how to claim Solar Tax Credit in Maine. 

What is the Solar Tax Credit?

The ITC, or the Solar Investment Tax Credit, enables businesses and homeowners in Maine to receive a tax credit equal to 30% of the cost of a solar panel system. Unlike a rebate, the ITC directly reduces the amount of income tax owed.

The Solar Tax Credit is applicable to those who install solar panels before December 31, 2034. It decreases to 26% in 2033 and further reduces to 22% at the beginning of 2034.

How does the Solar Tax Credit work in practice?

If a household installs a $20,000 solar panel system, they can deduct $6,000 from their income taxes, effectively lowering the net cost to $14,000. Any remaining credit can be carried over to subsequent years, ensuring that the promised 30% solar incentive is realized.

How do I get a solar tax credit in Maine?

To qualify for the ITC, ownership of the solar energy system is a requirement, and leased systems do not meet the eligibility criteria. The solar PV system must be installed within the United States and must be new or used for the first time. If claiming for a PV installation on a boat or an RV, it should be designated as a second home.

The Solar Tax Credit is claimed after the solar system is installed. Keep thorough records of expenses related to the installation, including invoices, receipts, and other documentation demonstrating qualified expenditures like solar panels, inverters, mounting equipment, and labor costs. While these documents are not required to be submitted, they may be necessary in case of an audit.

To claim the Solar Tax Credit as a homeowner, complete IRS Form 5695 and attach it to the federal income tax return. Ensure that your residential energy credit information is added to Schedule 3 (Form 1040) and file the tax return by the applicable deadline.

Need help? Follow our guide!

We cover filling out the forms for claiming ITC step by step

Step-by-step guide

Benefits of the Maine Solar Tax Credit

The cost reduction provided by the Solar Tax Credit in Maine encompasses not only solar panels but also all related equipment, shipping, and labor expenses, with no cap on the claimable amount.

In addition to the federal solar tax credit, Maine may have its own state-level incentives and rebates for solar installations, further easing the upfront costs of adopting a solar energy system. Refer to our guide on Maine solar incentives for more information.

Andrey Gorichenski
Senior Editor

Andrey had been a news editor and freelance writer for a number of medias before joining A1SolarStore team. Climate change and its impact on people's lives has always been among his interests and it partially explains his degree in Philosophy and Ethics.

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