Commercial Solar Tax Credit: What Maine Businesses Need to Know for 2027

Published October 2026

Maine Solar Solutions crew installing solar panels on a commercial rooftop in Maine.

If you’ve been considering solar to reduce electricity costs for your Maine business, there’s a good reason to start planning now.

Qualifying commercial solar projects may be eligible for a federal tax credit of up to 40% of eligible project costs. But for most new projects, the system must be installed and operating by December 31, 2027, to qualify.

That may sound like plenty of time, but commercial solar projects involve several steps, from system design and permitting to utility approvals and installation. Some projects require more extensive planning, and installation schedules can fill up quickly.

Here’s what Maine businesses should know about the commercial solar tax credit, who may qualify, and why it’s worth exploring a project sooner rather than later.

How much is the commercial solar tax credit?

Commercial solar projects that meet federal requirements may qualify for a tax credit of up to 30% of eligible project costs. Unlike a tax deduction, which reduces taxable income, a tax credit directly reduces the amount of federal income tax a business owes.

Projects that meet federal domestic content requirements may qualify for an additional 10 percentage points, potentially bringing the total federal tax credit to 40%.

Eligibility depends on the project and applicable federal requirements, so businesses should work with a qualified tax professional to determine which incentives are available to them.

What do equipment requirements mean for your project?

Qualifying for the additional 10-percentage-point domestic content incentive requires meeting specific federal standards for U.S.-produced steel, iron, and manufactured products.

Separate federal rules also restrict certain equipment and components associated with prohibited foreign entities. For projects beginning construction in 2026 or later, failing to meet these requirements could make a project ineligible for the federal tax credit.

Because equipment selection can affect eligibility for both incentives, it’s important to consider these requirements early in the design process.

Our team considers these requirements when designing commercial solar systems and selecting equipment to help projects meet applicable federal standards.

Why businesses should plan well before December 2027

Commercial solar projects don’t happen overnight. Before a system is operating, there’s site evaluation, design and engineering, permitting, interconnection with Central Maine Power (CMP) or Versant Power, equipment procurement, installation, inspection, and commissioning.

The timeline for a rooftop installation can be very different from a large ground-mounted system or a project that requires additional electrical work.

As the 2027 deadline approaches, installation schedules may fill up, particularly during the busy summer and fall months. Waiting too long to get started could leave less flexibility for permitting, equipment availability, utility approvals, or unexpected delays.

Planning ahead gives your business more time to evaluate costs, potential savings, and project timelines without feeling rushed to make a decision.

The tax credit is only part of the return

The federal tax credit can make commercial solar a more attractive investment, but the benefits don’t end there.

Generating your own electricity can lower monthly electric bills, reduce operating costs, and provide some protection against future utility rate increases. With solar panels designed to produce electricity for decades, those savings can add up over time.

For some Maine businesses, solar is also about reducing their environmental impact and meeting sustainability goals.

There may be additional financial benefits, too, including accelerated depreciation and revenue from Renewable Energy Credits (RECs), depending on the project.

Every business is different. That’s why we design each solar system around your property’s characteristics, electricity needs, and financial goals to help maximize its value over time.

What could the numbers look like?

Here’s an example of how federal tax incentives could affect the cost of a $120,000 commercial solar project, assuming it qualifies for the full 40% federal tax credit, including the domestic content bonus.

Example Commercial Solar Project

Total system and installation cost: $120,000
Federal tax credit (40%): −$48,000
Estimated depreciation tax benefit: −$20,160
Estimated net cost after tax benefits: $51,840

What about long-term savings?

Beyond the tax incentives, commercial solar can provide ongoing electricity savings and potential revenue from Renewable Energy Credits (RECs).

For this example, the system is projected to generate:

$11,700 in annual electricity bill savings
$1,386 in annual REC revenue
$520,119 in projected savings over 30 years

These estimates are based on a modeled commercial solar project. Actual costs, savings, and financial returns depend on electricity use, utility rates, system size, site conditions, financing, and available incentives.

Federal tax credits reduce income tax liability, while depreciation deductions reduce taxable income. Neither is an upfront discount on the installation price. Actual tax benefits and financial returns vary by project. Consult a qualified tax professional regarding eligibility.

Commercial Solar Tax Credit FAQs

Here are answers to some common questions about the commercial solar tax credit, the 2027 deadline, and planning a project.

For most new commercial solar projects that begin construction after July 4, 2026, the federal tax credit is available only if the system is placed in service by December 31, 2027. Projects that began construction earlier may be subject to different rules.

Potentially. Eligible commercial solar projects may qualify for a 30% federal tax credit, with an additional 10 percentage points available for projects that meet domestic content requirements. That could bring the total credit to 40% of eligible project costs.

Yes. For projects that begin construction in 2026 or later, federal rules restrict the use of certain equipment and components associated with prohibited foreign entities. Projects that don’t meet these requirements may lose eligibility for the entire federal tax credit.

Equipment selection also affects whether a project qualifies for the additional domestic content incentive, so both requirements should be considered during system design

A solar system is generally considered placed in service when it is ready and available to operate as intended. Simply completing the physical installation may not be enough to meet the federal deadline.

Timelines vary depending on the size and complexity of the project. Design, permitting, utility interconnection, equipment availability, installation schedules, and Maine weather all play a role. After evaluating your property and electricity use, our team can provide a better estimate of how long your project may take.

See what solar could look like for your business

Interested in learning more about commercial solar? Explore our commercial solar services or schedule a free site assessment to find out what a system designed for your business could cost, how much electricity it could generate, and what the installation timeline might look like.

Schedule Your Free Site Assessment

Maine Solar Solutions does not provide tax, legal, or financial advice. Tax incentives and eligibility requirements vary. Please consult a qualified tax professional to determine which federal incentives are available to your business.