Did you know that Maryland ranks as the 18th highest solar installer by state in the country and has created enough solar power to generate energy for over 200,000 homes? One of the reasons for Maryland’s solar boom is its incentive programs.
If you are thinking about installing solar panels on your home or business in Maryland, you may be wondering how to afford the upfront cost of the system.
The good news is that there are several grants and rebates available for solar panel installations in Maryland that can help you save money and reduce your payback period.
Find out what are the solar panel incentives in Maryland, how they work, and how you can qualify for them below.
Federal Solar Tax Credit
The federal solar tax credit, also known as the Investment Tax Credit (ITC), is a nationwide incentive that offers 30% of the cost of a solar system in a tax credit to consumers who install solar panels from 2023 to 2032. This means that you can deduct 30% of the cost of your solar system from your federal income taxes, reducing your tax liability or increasing your tax refund. For example, if your solar system costs $20,000, you can claim a tax credit of $6,000.
To qualify for the federal solar tax credit, you must own your solar system (not lease it) and have enough tax liability to claim the credit. The credit will drop to 26% in 2033, 22% in 2034, and be canceled in 2035 if Congress doesn’t renew the tax credit.
Maryland Clean Energy Grant Program
The Maryland Clean Energy Rebate Program is a state incentive that offers grants for homeowners and businesses who install qualifying solar PV systems. For solar photovoltaic systems, the grant amount is $1,000 for residential systems larger than 1 kW. For commercial systems, grants begin at $1,000 with an additional $150 per kilowatt (kW) for systems as large as 8 kW. This will fluctuate according to size and won’t exceed $30,000. For example, if you install a 5 kW residential system, you can receive a grant of $1,000. If you install a 100 kW commercial system, you can receive a grant of $16,000, plus an additional $100 per kW, not exceeding $20,000.
To qualify for the Maryland Clean Energy Rebate Program, you must install a new solar PV system that is at least 1 kW in size. You must also use an installer that is certified by the North American Board of Certified Energy Practitioners (NABCEP) and submit your application within 12 months of installation.
Grant applications are accepted during the fiscal year, so the deadline is June 30th of the current grant period. Funding can also run out, which means applications will no longer be accepted and you will have to apply the following fiscal year for a grant.
Maryland Energy Storage Income Tax Credit
The Maryland Energy Storage Income Tax Credit is a state incentive that offers a tax credit for solar battery installations. Tax credit for battery storage takes the lower amount of either 30% of the installed cost of the battery system or $5,000 for residential and $150,000 for commercial property.
To qualify for the Maryland Energy Storage Income Tax Credit, you must install a new battery system that is paired with a renewable energy system (such as solar), pay for the system in full, and be the owner of the residential or commercial property. The system must asl pass safety inspections and receive permits from the local authority in your jurisdiction.
Applications for this tax credit are accepted during the calendar year and battery must always be installed within the same year. Funds for Maryland solar battery storage credits will not go over the budget of $750,000, so it is best to submit your application as soon as your unit is installed.
Maryland Solar Renewable Energy Certificates (SRECs)
Maryland Solar Renewable Energy Certificates (SRECs) are a market-based incentive that allows you to earn money from the electricity generated by your solar panels. An SREC represents one megawatt-hour (MWh) of clean electricity produced by your solar system. You can sell your SRECs to utilities or other buyers who need them to meet their renewable energy requirements.
The price of SRECs varies depending on supply and demand, but it is typically around $50 per SREC in Maryland. For example, if your solar system produces 10 MWh of electricity per year, you can earn about $500 per year from selling your SRECs.
To qualify for SRECs in Maryland, you must register your solar system with the Public Service Commission (PSC) and enroll in an SREC aggregator or broker service that will help you sell your SRECs. You must also have a revenue-grade meter installed on your system to measure its output.
In addition, SRECs are only good for three years from the time they are generated. You must also own, not lease, your solar panels to sell your credits.
Other Solar Incentives in Maryland
In addition to the incentives mentioned above, there are some other benefits of going solar in Maryland that can help you save money and increase the value of your system. These include:
- Solar Property Tax Exemption: This incentive exempts you from paying any additional property taxes on the increased value of your home due to installing solar panels.
- Solar Sales Tax Exemption: This incentive exempts you from paying any sales taxes on the purchase of your solar equipment.
- Net Metering: This policy allows you to receive full credit on your utility bill for the excess electricity that your solar panels send to the grid. You can use this credit to offset your electricity consumption if your solar system is not producing enough power.
- Additional Local Incentives: Some counties and municipalities in Maryland offer additional incentives for solar installations, such as rebates, loans, or discounts. You can check with your local government or utility to see what incentives are available in your area.
Getting the Most Solar Incentives
To receive these solar incentives, you must ensure that you comply with local requirements and apply for grants and rebates on time. Installing your solar panels correctly to get permits and generate the most power is also essential. This requires using the most qualified solar panel installer in Maryland.
At Rising Sun Solar Solutions, we assess your property to install solar panels for optimal power generation, and we help you file for Maryland incentive programs and tax rebates.
Contact us today to schedule a free site evaluation and talk about more ways to save with solar.