Maryland Solar Incentives: How To Make Money Using The Sun
Save With Maryland Solar Incentives
Hello, friend! In this guide, we’ll cover all the Maryland solar incentives, rebates, and tax credits you may qualify for. So, if you live in Maryland and are thinking about a shift to solar, you’re in luck.
Maryland is one of the most solar-friendly states in the U.S.
That is to say; the state has a bunch of incentives that make it more affordable to go solar. They range from local to federal programs.
So, sit back, relax, and let me guide you through the bright world of Maryland solar incentives.
Maryland Solar Incentives: Driving Solar Panel System Adoption
In 2019, Governor Larry Hogan proposed CARES. In short, this set the goal of generating 100% clean electricity by 2040 with zero carbon emissions.
That’s a huge goal…
Having said that, with over 200 sunny days a year, Maryland is ideal for solar energy.
Maryland has enough solar capacity to power over half a million homes. That number continues to grow as solar installers add more systems.
So, let’s dive in and see how this can benefit you.
Save on Solar Energy Systems With The Federal Solar Tax Credit
One of the best solar energy tax credits in the U.S. is the Investment Tax Credit (ITC) because it lets you deduct a lot of the cost of installing solar panels from your federal taxes.
The Inflation Reduction Act allows for a large increase in the federal solar tax credit deduction. This can reduce the cost of Maryland solar energy systems. So, it’s worth adding to your calculations.
Here are the Details:
|Install Year||Tax Credit|
|2035 and thereafter||0%|
How Do Federal Tax Credits Work?
When you purchase a solar system for your home, you can claim a credit to lower your tax bill.
To be eligible, you must have a tax liability. This doesn’t mean you owe taxes at the end of the year. It means that you have an income that you are required to pay taxes on.
For example, many W2 workers pay taxes weekly through their checks. Others, such as 1099 workers, may pay their taxes quarterly.
The point is that you are employed or own a business and must pay taxes on your income by law.
Your tax bracket sets the total amount you pay. Whether you get a refund or owe at the end of the year means you overpaid or underpaid the total amount.
Federal tax credits aren’t about if you owe taxes at the end of the year. They reduce the total amount you are supposed to pay in the first place.
Here’s the exciting part: the ITC credit is non-refundable. This means it can offset your income tax amount dollar-for-dollar.
But if the credit exceeds your tax liability for the year, don’t worry! You can “roll over” the unused portion to future years as long as the credit remains in effect.
This allows solar installers to offer programs where you can own your system for $0 down.
What Costs Are Covered By The ITC?
The ITC covers energy-saving equipment and related costs.
This includes solar equipment that generates electricity or heats water and solar power storage equipment. Starting in 2022, a size of at least 3 kilowatt hours is required.
The credit also applies to installation and labor costs. However, it doesn’t apply to solar energy systems you lease or use solely to heat a swimming pool or hot tub.
How To Qualify For The ITC
To qualify for the ITC, you need to meet certain criteria:
- Your solar installation must occur by December 31, 2034.
- The solar installation must have occurred at your primary home in the U.S.
- The installed solar panels, solar batteries, or other equipment should be new or used for the first time.
Also, you must:
- Purchase your solar panels with cash or financing. It can’t be a lease or agreement to pay a solar company for the generated electricity.
- Purchase interest in a community solar project separate from your home. The electricity generated must be credited against your home’s electric consumption and can’t exceed it.
Claiming The ITC
To claim the Federal ITC, you must file IRS Form 5695 as part of your tax return. This form will help you calculate the credit you’ll enter on your 1040 form.
Remember, if the credit is more than your income tax due, you can’t get money back from the IRS. But you can carry over the unused portion to the following tax year.
Maryland Solar Incentives: Putting Money In Your Pocket
The Residential Clean Energy Rebate Program
We often get asked about Maryland Solar Rebates.
The Residential Clean Energy Rebate Program (R-CERP) offers a $1,000 rebate for residents who purchase and install a solar power system.
You must live in Maryland and install the system at your primary home to qualify.
Who is Eligible?
The R-CERP is a great opportunity. However, it does come with some eligibility criteria.
Let’s break these down in simple terms:
- Time Frame: You must submit your application within one year of installing your system.
- Your Home: This rebate applies to residential properties and must be your primary residence when you apply.
- Property Ownership: The property may not be held in an irrevocable trust.
- System Size: Your system needs to exceed the following minimums:
Minimum Size and Rebate Amounts:
|Clean Energy Technology||Size||Rebate|
|Solar Photovoltaic (PV)||Minimum 1kW-DC||$1,000|
|Solar Shingles||Minimum 1kW-DC||$1,000|
|Solar Water Heating||Minimum 10 Sq. Ft.||$500|
|Geothermal*||Minimum 1 ton||$3,000|
Applying for Your Rebate
At Sustainably Solar, we handle all the nitty-gritty work of applying for your rebate. That’s right, no paperwork or long forms for you to fill out – we cover that!
But we understand you may be curious about how this rebate works. So, here’s a simple explanation.
What You Need To Apply
- Clear Photos: Take clear photos showing all the parts of your system. Make sure you can see all the panels or collectors if it’s on your roof.
- Paid Invoice: Have a copy of your final invoice showing a zero balance.
- Permits & Inspections: Gather copies of your permits and inspections. You need a ‘Passed Final Inspection’ report, sticker, or photo.
- Proof of Residence: Show that the install address is your main home. You can use a printout from the State Department of Assessments and Taxation. If you’re active duty military or the SDAT result is incorrect, you can call the MEA to discuss other ways to prove your residence.
After collecting your documents, you’ll submit your application. You can do it online or by mail.
- On the application page, Fill in your details and upload your documents. This includes the IRS W9 Form that confirms your mailing address.
- Check Your Email: After submitting, check your email for a message from firstname.lastname@example.org. They will send you a signature sheet.
Sign & Mail:
- Print the signature sheet, fill it out, sign it, and mail it to MEA. Keep an eye out for this email and check your spam folder.
Your application can only be processed once they get your signed and complete signature sheet. But once they do, they’ll review it and get back to you.
Maryland Solar Incentives: Property Tax Credits By County
Maryland Solar Incentives By County
Besides statewide Maryland solar incentives, there are several county property tax credits.
Here are some of the local solar incentives you may qualify for:
|Prince Georges County||Property Tax Credit||$5,000|
|Anne Arundel County||Property Tax Credit||$2,500|
|Baltimore County||Property Tax Credit||$5,000|
|Howard County||Property Tax Credit||$2,500|
Energy Storage Income Tax Credit: Tax Credits For Solar Batteries
The Maryland Battery Tax Credit is an incentive the state offers to promote the purchase and use of battery energy storage systems.
This credit aims to encourage investment in energy storage technology because it can help reduce energy costs. Also, it can improve the strength of the electric grid.
Maryland Battery Tax Credit Eligibility
To be eligible for this tax credit, you must be a Maryland taxpayer who installs an energy storage system. These systems could include different types of solar batteries.
Both residential and commercial taxpayers can apply for this tax credit.
It is worth 30% of the cost of the storage system or $5,000, whichever is less.
- If you buy a 10 kWh storage for $10,000, the tax credit would be worth $3,000 (30% of $10,000).
- If you buy a 20 kWh storage for $20,000, the credit would be worth $5,000. Because $5,000 is the max credit.
Battery and Federal Tax Credits Combine
The Maryland Battery Tax Credit and Federal Residential Clean Energy Credit can be combined. The Federal tax credit is also worth 30% of the cost of a battery project, and it has no max value.
Because of the Inflation Reduction Act, this federal tax credit now applies to standalone battery storage not connected to a solar system.
Combined, these two tax credits can help reduce the cost of battery storage by up to 60%.
Here’s how it works for the two systems mentioned above:
|Cost Breakdown||10 kWh System||20 kWh System|
|Gross Project Cost||$10,000||$20,000|
|Maryland Battery Tax Credit||-$3,000||-$5,000 max|
|Federal Battery Tax Credit||-$3,000||-$6,000|
Combining State and Federal tax credits significantly reduces the cost of your battery storage system.
Thus, making it a highly beneficial financial strategy for those looking to invest in clean, renewable energy sources.
Applying For The Maryland Battery Tax Credit
Applying for the credit is simple. Either you or your solar installer must complete and submit an application to the Maryland Energy Administration by the specified deadline.
If approved, the MEA will issue a tax credit certificate. You then attach it to your state income tax return to claim the credit. Remember, it must be installed at your primary home.
Additionally, it must pass all necessary permit inspections in the same tax year you apply for the credit.
Solar Renewable Energy Certificates
While the tax credits for solar are enticing, it gets even more exciting: Homeowners can earn money with solar panels through the Solar Renewable Energy Credits (SRECs) program.
By the way, Maryland is one of only seven states that have an SREC program.
Here’s how it works…
For every 1,000 kWh of electricity your solar energy system produces, you earn one SREC. Sometimes you may hear these credits referred to as Solar Renewable Energy Certificates.
These credits can then be sold or traded, creating a fantastic income opportunity for solar panel owners.
This is because the government forces energy companies to produce a certain amount of clean energy, or they fine them.
But the government allows companies to purchase SRECs from homeowners for slightly less money.
This ends up being a big win for everyone.
Homeowners make money selling their SRECs. Companies save money on fines, and the government gets homeowners to install solar panel systems.
Net Metering in Maryland
Another benefit for those with solar panels in Maryland is net metering.
Net metering allows homeowners to sell excess solar energy back to the grid. This means that when your solar panels produce more energy than you use, excess electricity can be fed back into the power grid.
This earns you credits on your electric bill.
Net metering helps you benefit from your solar energy system, even when you’re not using all the energy it produces.
Increase Your Property Value with Solar Panels
Installing a solar energy system can bring various benefits, including financial incentives and energy bill savings. It can even increase your home’s value.
Let’s explore how solar panels can increase your property’s worth.
Solar Panels and Higher Selling Prices
According to a Zillow study, homes with solar panels sell for 4.1% more than those without solar. This adds an average value of $17,908 for a median-valued home at the time of writing.
The Berkeley Lab conducted an analysis across eight states. They wanted to see how solar panels influenced home selling prices. They found homes with solar panels were worth, on average, $15,000 more than similar homes without solar.
The Increasing Value of Solar Panels
Another exciting aspect of investing in solar panels is their increasing value.
In the early years of the study, each kilowatt of solar power installed added roughly $4,000 to home values. However, this value rose to nearly $6,000 per kilowatt in later years, indicating a positive trend.
In summary, investing in solar panels contributes to a greener future. Plus, you’ll enjoy financial savings and increase your home’s overall value.
Solar Property Tax Exemption
In Maryland, any increase in home value from solar installations is exempt from property tax assessments. This includes solar PV systems and solar water heating systems.
The solar energy system must be installed on your property and used to generate electricity.
Maryland Solar Panel Sales and Use Tax Exemption
Another incentive in Maryland is the Solar Panel Sales and Use Tax Exemption.
This makes you exempt from the 6% state sales tax when you buy solar panels. It applies to both solar PV systems and solar water heating systems. In other words, this is a discount on the purchase, reducing the upfront costs of going solar.
The Hidden Costs of The Inflation Reduction Act
Remember The Inflation Reduction Act?
Well, it’s not all sunshine and rainbows. Behind the scenes, some sneaky taxes and fees are lurking that could hit your wallet hard
Let’s break it down…
New Taxes and Fees on Energy Companies
The government is imposing new taxes and fees on energy companies.
And guess who’s paying for them?
That’s right, it’s us.
In short, the Act brings back a tax on crude oil and petroleum products. This adds a huge $1.2 billion burden on energy producers each year.
Targeting Oil and Gas Production Methane Emissions
They’re also adding new taxes on oil and gas production methane emissions.
In short, these fees could discourage energy companies from making improvements. In turn, this could lead to higher costs that increase our energy prices.
Not cool, right?
Raising Costs for Oil and Gas Leases on Federal Lands
And here’s the kicker: they’re also raising the costs for oil and gas leases on federal lands. And those expenses will also be passed down to us.
Use Maryland Solar Incentives To Take Control of Energy Choices
So, to put it simply, all these taxes and fees mean trouble for our wallets.
But fear not!
There’s a solution…
It’s time to take control of our energy choices. We can protect ourselves from rising costs by using the various Maryland solar incentives to switch to solar power.
Plus, subsidies and incentives are available right now to help us transition.
So, let’s be proactive and protect our money. Say goodbye to hidden costs and hello to solar energy. It’s time to take charge and save money!
Maryland Solar Incentives and Future Energy Costs
Why The Government Is Funding Solar
Before we wrap up, it’s important to understand why solar is being subsidized in the first place. You might ask yourself: why is the government encouraging solar energy so strongly?
And the answer is twofold.
Solar Benefits The Environment
First, the government is promoting solar power because it wants to shift from polluting energy sources like coal and natural gas. This shift will reduce greenhouse gas emissions.
Also, this will help slow climate change and keep our planet healthy.
Solar power is a clean source of energy that reduces our reliance on fossil fuels. And the government is helping fund it through various rebate programs and tax credits.
Financial Reasons for Maryland Solar Incentives
Beyond environmental benefits, there’s also a financial reason for these incentives. The government is using the “carrot and stick” approach.
On the one hand, there’s the carrot: the various incentives and credits designed to make solar energy more affordable. You can take advantage of these benefits right now. They will protect you from future energy inflation.
Rising Energy Costs and Lower Incentives
On the other hand, there’s the stick: the rising cost of energy.
We all know gas prices have gone through the roof. We also know they’ll continue to increase.
But imagine that 20 years ago, you were allowed to lock in your gas rate at a slightly increased price.
When everyone else is getting taken to the cleaners at the gas pump, how good would you feel about your investment today?
You’d feel like a genius…
Now, imagine that you didn’t lock in your rate. You’d be kicking yourself.
That’s the opportunity solar offers today.
Except, solar panels don’t cost more. Almost all of our clients save money immediately. They pay LESS to own their systems than they pay their utility company.
But 80% of people have no idea these incentives exist.
And most people who do know don’t fully understand the carrot being dangled in front of their faces. They also have no idea there’s a stick.
But eventually, they’ll be beaten by it, and it’ll be too late.
…The incentives will be gone.
This is why taking advantage of these financial incentives now is so important. They help you lock in today’s rates and protect yourself from rising energy costs.
Because, down the line, incentives such as SRECs, property tax credits, and the R-CERP will most likely be lowered or no longer exist.
Early Adoption and Increased Equipment Prices
Many of the incentives currently available, including some local and state programs, operate on a first-come, first-served basis. This means that early adopters are more likely to receive these benefits.
Also, equipment prices might rise as the market grows due to increased demand. As a result, installing a solar system in the future may cost more.
The Importance of Net Metering Programs
Finally, it’s essential to mention net metering programs. As mentioned, these allow you to sell excess solar energy to the grid.
These programs improve the financial benefits of solar.
However, some states want to change these programs to benefit utility companies. They are trying to reduce the value of the energy you can sell back.
Going solar lets you lock in the current, more favorable net metering rates. This locks you into the 1:1 ratio program.
Maryland Solar Incentives: Powering A Greener Future
So, in summary, the message is clear: there’s no better time than now to go solar. By acting today, you can take full advantage of the “carrot,” avoid the “stick,” and invest in a cleaner, greener future.
Benefits of Installing Solar Panels
There’s More to Solar Than Just Tax Credits!
When you install solar energy equipment, such as a solar panel system, you have the power to:
Slash Pollution: Reduce your carbon footprint and contribute to a cleaner world.
Cut Costs: Lower the costs of powering your home, sell excess energy to your utility company, and enjoy long-term savings.
Go Green: Support a greener environment and promote healthy living.
Take Control: Become energy-independent and own your power.
Outsmart Inflation: Shield yourself from rising energy costs and lock in savings.
Make an Impact: Experience the satisfaction of positively impacting our planet.
Maryland Solar Incentives: Embrace Solar Panels and Reap the Rewards
So, is it worth going solar in Maryland?
The various incentives such as tax credits, solar renewable energy certificates, energy savings, and increased home value suggest so.
Plus, you’ll play an important role in reducing pollution and advancing toward a cleaner future. Welcome to the world of solar—it’s a sunny place to be!
Take the first step toward solar energy today! Find out if your home qualifies and start saving. Click here to get a free solar quote!