A legislative proposal in Maine that would impose new fees on community solar projects is having a chilling effect on solar developers, some of whom say they may stop working in the state, or even already have.

“The problem is that they’re looking to change the rules of the market after the fact,” said Brendan Bell, chief operating officer of Aligned Climate Capital, which owns several community solar projects in the state. ​“We’ve already stopped investing in Maine because of this. Simply the risk of this happening has made us stop.”

The legislation, which was approved in late May by the Energy, Utilities, and Technology Committee, aims to reform Maine’s net energy billing program — often called net metering in other states — which pays the owners of solar panels for the excess energy they share with the grid.

Nationally, net metering programs have been contentious, with states like California, New Hampshire, and North Carolina making big changes to mixed — and sometimes litigious — receptions. Maine’s system has been under scrutiny for years, as many critics say it has created excessive profits for developers while unfairly shifting costs to consumers who don’t even use solar power.

While many renewable energy advocates and developers agree that the program needs some reform, they say the current bill goes too far. The legislation outlines a new system for compensating commercial and industrial customers who own solar panels. Currently, the compensation rate is based on standard utility electricity rates, meaning solar owners make more revenue when power prices rise. The bill would require a new mechanism of gradual, annual rate increases to avoid excessive windfalls for solar owners when energy costs go up.

Of particular concern, however, are other provisions that apply to community solar developments, larger-scale installations that sell power to multiple subscribers.

In 2019, reforms to Maine’s net energy billing program paved the way for community solar to take off in the state. As of 2021, 79 megawatts of community solar capacity had been installed; as of May, that number is up to 1,008 MW.

“Community solar is incredibly important to Maine,” said Kate Daniel, Northeast regional director for the Coalition for Community Solar Access, a national trade group. ​“It’s been the driver of the new clean energy that’s gone onto the grid in recent years.”

The bipartisan legislation now under consideration would impose a monthly fee, paid by community solar owners to utilities. The money would be intended to cover the cost of delivering the solar power to consumers. Those ​“distribution costs” would otherwise be borne by utility customers.

Projects between 1 MW and 3 MW in size would pay $2.80 per kilowatt of capacity — so $5,600 a month for a 2-MW project, for example. Larger arrays between 3 MW and 5 MW would pay $6 per kilowatt — so, $24,000 per month for a 4-MW installation. These rates would be increased as needed to keep up with the cost of maintaining and expanding the grid. The goal, proponents say, is to continue supporting solar in a way that does not add to residents’ financial hardships.

“It is really important to me that we are fighting climate change in an economically just way,” said Rep. Sophie Warren, a Democrat and one of the bill’s sponsors. 

However, renewable energy advocates and solar developers say the monthly fees could scare away new projects as well as put existing operations at risk.

“It basically … will consume all of our free cash flow and put us in a position where we may default on our loans,” said Cliff Chapman, CEO of Syncarpha Capital, a New York-based clean energy investment firm with eight community solar projects operating in Maine.

Opponents question the way these fees came to be included in the bill. They were not in the original draft legislation, but the idea was raised and voted on during committee debate. The language is in the process of being officially added to the bill so that lawmakers can report it out of committee and send it to the House floor. It is concerning that the fees received no public hearing, and many stakeholders and lawmakers are not even aware they are being added in, said Eliza Donoghue, executive director of the industry group Maine Renewable Energy Association.

Even if this bill fails to pass, the damage may already be done: Investors in all sorts of clean energy segments are becoming wary of doing business in a state that would even consider retroactively changing the rules for projects that were designed and financed under a different set of expectations, opponents said.

“It’s a retroactive policy proposal that many folks strongly believe would cause significant financial harm to the solar industry in Maine,” said Lindsay Bourgoine, director of policy and government affairs for Maine-based solar company ReVision Energy.

Opponents also worry that the bill sends the inaccurate message that increasing solar adoption makes energy more expensive, when research suggests the reverse is true. In 2024, solar development in Maine yielded about $1.42 in benefits for every dollar of cost, according to a report by state utilities regulators. As of the second half of 2024, net energy billing added about $7 per month to the average residential electric bill in the state.

Warren, however, says reining in even this modest increase could help some of her constituents.

“I know there are people on reverse mortgages, on fixed incomes, who are rationing their medicines,” she said. ​“These [compensation] rates are far too high, and unnecessarily high for what we’re getting from them.”

Bill proponents are also not convinced by claims that the new rules would cause financial problems for developers. The provisions are designed to have less financial impact on smaller companies that are less able to take the hit, said Maine Public Advocate Heather Sanborn, a supporter of the bill.

The bill also contains important consumer protections that opponents aren’t talking about, Sanborn said. Community solar operators would be required to rightsize customers’ subscriptions, preventing them from paying for more credits than they can use. Should a customer still end up with more credits than they need, the operator would be required to issue a refund. The legislation would also encourage the installation of battery storage in conjunction with solar.

“It is a responsible and balanced solution,” Sanborn said. 

For opponents, however, the community solar fees are an intractable problem that outweighs any other provisions.

“What we don’t do in America is change rules retroactively and blow up existing investment,” Chapman said. ​“Being a state that does something like this has huge implications — they’re making themselves a pariah for investors.”