Standard Offer rates for 2025 move sideways while delivery rates move higher following three years of wild swings
Despite being the 43rd ranked state by population, Maine’s Community Solar market had the second largest volume of installations in the country in 2024, behind only New York. Through December 16, 2024, some 278.7 MWAC of community solar had been installed in Maine (Figure 1). That followed a similar amount for 2023 of 283 MWAC. By contrast, SEIA reported that New York installed about 430 MWDC (~310 MWAC) of community solar in 2024 and Illinois was third with 250 MWDC (~180 MWAC).
Figure 1. Maine Community Solar Annual Installations by Program, 2019-2024 (MWAC)
A considerable number of projects remained in the queue and/or were under development in Maine. As of the date of publication for this post, the Central Maine Power (CMP) interconnection queue lists solar projects from 900 kWAC to 5 MWAC in size totaling about 440 MWAC.
Maine Community Solar Market Overview and Key Players
The Community Solar program is administered under the Net Energy Billing (NEB) program. The program is divided into Tariff Rate crediting, based on fixed annual rates for energy produced, which is available for non-residential customers, and kWh crediting, based on the kWh charges on the customer bill, which is available for all customers. Compensation for Tariff Rate projects was modified for projects that reached mechanical completion after September 2023 and the Tariff Rate program was closed to new applications as of December 31, 2023 and is currently under review. Meanwhile, the kWh program continues to accept new applications.
According to the EIA, as of October 2024, Maine had the 6th highest residential utility rates in the country. The Community Solar rates are based on close to the full value of those retail rates. Thus, the high rates combined with other attributes of the market have made it a go-to market for developers and investors.
Maine’s community solar market began taking off in 2019. In that year, Maine revised its NEB program to include projects up to 5 MWAC. Previously, the largest eligible size was 660 kWAC. While commercial developers in other states were already participating in NEB before 2019, commercial scale project developers flocked to Maine as soon as the new legislation was enacted. In 2021, the 5 MWAC size limit was reduced to 2 MWAC and in 2023, it was reduced again to 1 MWAC (though existing qualified projects were grandfathered at the higher levels).
Figure 2 shows some of the main developer/owners in this market. These companies include a mixture of developers and longer-term owners who might take ownership during construction or after a project reaches commercial operation.
Figure 2. Key Developer / Owners of Community Solar in Maine
List of Credit Rates
Table 1 shows all the different community solar rates in Maine. With three different programs, three different utilities, and three or four different rates per program, there are a total of 30 different rates.
Table 1. Maine Community Solar Credit Rates
Subscription managers mostly market to residential subscribers but sometimes a small number of larger commercial customers can account for a larger share of the revenue so it’s important to know what the revenue mix of the subscriber base will be to determine which curves a developer/owner needs.
Price Dynamics, 2019-2025
The following sections will review the market dynamics in Maine over the past six years for residential kWh charges, as well as the new prices that have been set for 2025. The kWh charges include the following:
The past few years have seen significant volatility, with electricity supply prices temporarily spiking in 2022-2023 due to natural gas prices, and delivery rates rising dramatically in the past three years due largely to unusually high storm recovery costs.
Electricity Supply Charge
In Maine, both CMP and Versant own and operate the transmission and distribution grids but purchase power from third party suppliers. For residential and small general service customers, the utilities conduct a procurement once a year in November for the entirety of the electricity supply needs for the following calendar year. Therefore, this is a fixed annual rate, called the Standard Offer. About 90% of customers in Maine are on the Standard Offer rate. The remainder elect to be supplied by a third-party supplier.
The medium general service and large general service are different in that their electricity supply charges are determined monthly. The medium general service rate is monthly, but set once per year, while the large general service rate is set monthly based on market pricing.
Electricity supply rates have seen a significant increase and then decrease in the past three years as shown in Figure 3. CMP’s rate increased 83% in 2022 and another 49% percent in 2023 before settling back in 2024 at a still elevated rate. This temporary spike was driven by natural gas prices skyrocketing ahead of the Ukraine war. Europe’s gas supply was curtailed which in turn led to increased purchases of LNG from the US (Figure 4 shows how LNG exports have grown over time since 2016; as LNG exports increase, the gas supply in the US decreases thereby increasing domestic prices). Fears of a cold winter further exacerbated the situation. However, the winter was warmer than expected, and Europe found a way to reduce energy consumption, find alternative sources of natural gas and power, and reduce, to a degree, their dependence on LNG exports.
Figure 3. Historical Residential Electricity Supply Charges in Maine, 2019-2025 ($/kWh)
Figure 4. Monthly US LNG Exports, 2016-Present (MMcf)
As soon as natural gas prices came back down in price, power prices followed suit. In fact, as evidenced by the strong correlation shown in Figure 5, natural gas price is by far the most important factor driving power prices in the short term. This is especially true for Maine because it sits near the end of the natural gas pipeline network, and fluctuations at the central location of the network (Henry Hub) are magnified because there is limited pipeline capacity in New England, causing bottlenecks. At a high level, the main factors that drive gas price include weather/temperature, geopolitics, LNG exports, and gas supply.
Figure 5. Annual Average Wholesale Power vs. Natural Gas Price in Maine, 2014-2024
Delivery Charge
Delivery charges are a function of the cost of distribution, which is set by the Maine PUC; transmission charge, which is set by FERC; stranded costs, and conservation programs.
Historically, delivery rates in Maine have fluctuated up and down but the overall trend has been generally flat to slightly up. Since 2019, however, costs have shot up. Over the past 6 years, CMP’s compound annual growth rate (CAGR) was 11% as shown in Figure 6. However, this charge is likely to decline in the future after one-time storm costs have been accounted for.
Figure 6. Historical Residential Delivery Charges in Maine, 2019-2025 ($/kWh)
The rate fluctuations have been driven by two main factors, as well as two lessor factors.
The two main factors can be seen in the breakdown of Bangor Hydro’s delivery charge by component in Figure 7. They are as follows:
Figure 7. Breakdown of Bangor Hydro's Delivery Charge by Component ($/kWh)
Other factors that have influenced these prices recently are:
Total kWh Charges
Figure 8 shows the resulting total kWh charges for CMP. The current rate effective January 1, 2025 is $0.234158/kWh.
Figure 8. CMP Total Residential kWh Credit ($/kWh)
Andrew Kinross is a Director at Power Advisory and can be reached at akinross@poweradvisoryllc.com.
Power Advisory is a leading forecaster of Community Solar rates for Maine and all other state markets across the US.