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Maryland Solar

Maryland is a small state in the United States and boasts over 72,000 solar system installations. Maryland has a variety of climates and topography, and it experiences the four seasons. It is home to the city of Baltimore, where the majority of the population is centered, and Annapolis. Maryland state government policies favor solar tax incentives. Its encouraging net metering program, great rebates and tax incentives, and strong Solar Renewable Energy Certificate (SREC) program make Maryland a favorable place for businesses and residents to install solar panels and battery systems.

Let’s learn about some of those incentives, the utility policies associated with interconnection and setup, and special solar financing plans for solar panels and battery systems in Maryland.

Maryland Solar Incentives

Maryland provides multiple solar energy rebates and incentives that help to reduce the overall cost of solar systems. Our EnergyPal Advisors can help you navigate all of the solar incentives available in Maryland and also apply them to the available solar panel offerings.

In summary:

• Maryland offers a $1,000 rebate on a solar system and a $500 rebate on solar hot-water heating systems. You can also get up to $5,000 off of a solar-battery system.
• Maryland has Solar Renewable Energy Certificates (SRECs) that vary in value.
• No sales tax on solar panels, systems and related equipment
• No property tax on any increase in property value from installing solar

Maryland Rebates and Tax Breaks

Here are more details about the incentives available in Maryland:

• The Maryland solar rebate program offers a $1,000 rebate on a solar system less than 20 kW in size and a $500 rebate on solar hot-water heating systems. Installers must have NABCEP certification. Don’t worry—our partners are all certified.
• Maryland grants Solar Renewable Energy Certificate (SRECs) to those who purchase solar systems. You receive one SREC for every mWh your panels are expected to produce per year. You can keep these SRECs for up to three years or sell them on the SREC market, where their value ranges from $70 to $80 each.

For example, let’s say you need a 10 kW system and it’s expected to produce 13,000 kWh (13 mWh) per year. You get 13 SRECs per year. Say each SREC is worth $77 and you decide to cash in this year. Your savings for the year would look like this:

13 X $77 = $1,001 savings

Assuming a similar value every year and a solar system life of 20 years, this program basically pays for the value of the entire system! Plus you get highly reduced electricity bills.

• The Maryland Energy Storage Income Tax Credit allows property owners to receive a tax credit of 30% of the total installed cost of a battery system, up to $5,000. The program is available on a first come, first served basis, and funding is limited.

• The Sales and Use Tax Exemption for Renewable Energy Equipment is a tax break where you don’t pay any sales tax on solar panels, systems or related equipment in Maryland.

• The Property Tax Exemption for Solar and Wind Energy Systems is a tax break where you won’t pay additional property taxes if your property value increases when you add a solar system (and with solar, your property value does go up!).

Other Solar Energy Incentives

The US federal government helps residents and businesses pay for their solar systems. The federal investment tax credit (ITC) allows for a tax deduction of 30% of the cost of a solar system currently. Tax credits can be rolled over if you can’t use the whole credit this year. The ITC cannot be claimed for solar leases or power purchase agreements (PPAs) where the third party financier takes the credits themselves, but that is typically baked into a reduced lease/PPA monthly for you. For the actual US government bill, see 4908 of the HR 133 (It’s a giant file, so watch out!).

If you purchased a $20,000 system, your savings from the federal tax credit would look like this:

$20,000 X 0.26 = $5,200 savings

You also would save an additional $1,000 by taking advantage of the Maryland rebate program. So if you spent $20,000 on that system, your cost would go down to $13,800. And you get yearly SRECs that can pay for the system over time.

Utility Policies

Utility policy factors determine what your utility provider pays you for the excess power you produce and what you save on your power bill by reducing electricity usage. Maryland gets a high score for utility policies.

Net Metering and Interconnection Policy

One important policy for solar customers is called Net Metering. Net Metering is a billing mechanism that allows solar customers to push electricity to the grid for credit that can be used later, like at night when your solar panels aren’t generating power. This incentivizes people to go solar, provides clean energy for others to use and prevents waste. Some states have poorer net metering policies than others, meaning that credits may not be able to be rolled over to the next month or year, or that you don’t earn full watt-for-watt credit for your excess energy.

Maryland’s Net Metering program is very favorable. You are paid the full retail amount for your excess energy in the form of a bill credit. Credits can be carried over into the next month but expire at the end of every April, when you are paid at the average commodity rate. You can cash in for up to 200% of what you consume, so you can actually get paid every year. The exact details depend on your electricity provider’s policies.

Solar Setup Fees

In Maryland, there are no application fees for systems less than 10 kW in size.

Electricity Prices

Electricity prices in Maryland are average. Usually you don’t want high prices, but with solar, the higher the prices, the more you save, and the more economical a solar system becomes.

According to the US Energy Information Administration, the average total cost of electricity in Maryland is $0.133 per kWh for residents. The national average for all states is $0.134 per kWh, ranging from $0.967 to $0.288 per kWh.

Rate Design

Rate designs are comprised of monthly fees and either a flat or tiered rate you pay for electricity. Good rate designs, which save you money when you conserve energy, are tiered and have low fixed monthly fees. Poor rate designs have flat rates and high fixed monthly fees. 

Maryland is about average when it comes to the quality of its electricity bill rate design. It has some tiered rate programs and average fixed fees (around $12–$18 per month).

You still pay fixed monthly fees when you go solar because you are still tied to the grid. Being tied to the grid is a good thing, because otherwise you might not have power at night or if your system stopped working suddenly. Even if you go off of the grid and rely on a battery source, the high cost of the battery would not outweigh the low monthly fee and the substantial savings obtained from a net metering program.

PACE Programs

PACE stands for Property Assessed Clean Energy and is a financing program for solar projects that is tied to the home instead of the homeowner. The PACE program is not available in Maryland.

Other Energy Financing

Solar systems can be financed by bank loans, solar installer financing, new home mortgages, energy loans and home equity loans or lines of credit. Cash works too. 

Talk to your EnergyPal Advisor about financing solar options in Maryland. We regularly source the best deals and terms for our customers.