Maryland - Energy tax credit, solar rebates and incentives

Maryland Renewable and Solar Energy Incentives

Tax Credit for Clean Energy Production (Residential/Commercial)

Maryland homeowners who produce electricity through geothermal, biomass, hydropower, wind turbine and solar panel generators are offered a tax credit.  Generated energy must be exclusively sold to non-family members.

• The credit is used to offset the state income tax, amounting to $0.85/kW produced.
• Incentive is capped at $2.5 million for a given household, which is paid over 5 years.
• For a system to qualify, it must have been installed and initiated production after Jan. 1, 2006 and prior to Jan. 1, 2011.
• Residents who enroll in this program must first receive an Initial Credit Certificate from the Maryland Energy Administration.
• If there is a surplus of credit during a taxable year, it transfers over to the next taxable year until the credit is either used up or the credit expires, which will occur on after 10 years.

Property Tax Exemption for Solar and Wind Energy Systems (Residential/Commercial)

Solar energy and wind systems utilized for power generation or heating and/or cooling purposes are completely exempt from property tax proportional to their value.

• Qualified systems: Solar Panel (PV), solar thermal and wind power.

Clean Energy Rewards Program – Montgomery County (Residential)

Homeowners residing in Montgomery County are given a monetary incentive for buying a maximum of $20,000 kWh/yr of renewable energy.  An incentive of $0.05/kWh of renewable energy is offered to subscribers.

To qualify, applicants must agree to buy at least 50% of their yearly electricity consumption from renewable energy sources.

• The customer’s utility provider will present the credit on the customer’s monthly electric bill.

Property Tax Credit for High Performance Buildings – Montgomery County (Commercial)

Commercial buildings in Montgomery County are eligible for a property tax credit if it utilizes renewable energy systems.  The more energy-efficient the building is, the greater the degree of the tax exemption and the duration of the tax exemption.

• Depending on the certification achieved and the type of building, property tax credits range from 10%-75% for 3 to 5 years.
  • There is a total maximum incentive of $5 million/fiscal year per building.  For gold rated buildings, incentive is capped at $2.5 million/fiscal year.  For silver rated buildings, incentive is capped at $1.5 million/fiscal year.

Buildings must adopt minimal LEED requirements (EB, NC or CS) or pertinent building codes stipulated a director of permits, inspections and licenses.

• Qualifying systems: Solar panel (PV), wind power, solar space heat, solar water heat, passive solar space heat, geothermal pumps, small hydroelectric, biomass and daylighting.
• Attained property tax credits are appended to the property and do not change even if there is a change in property ownership.
• Building certifications and relative tax exemption percentages and durations can be found online or at the Department of Finance.

Property Tax Credit for Solar Energy Equipment – Anne Arundel County (Residential)

Homeowners in Anne Arundel County are granted a single-use credit of 50% of the total equipment and installation costs or $2,500 (lesser value prevails) if they utilize solar energy for electricity production, space heating, space cooling and water heating purposes (except pool heating).

• For a system to qualify, it must have been installed and placed into production after Jan. 1, 2007.

Property Tax Credit for Solar and Geothermal Systems – Harford County (Residential)

Residencies that utilize solar or geothermal systems to heat space, cool space, or generate electricity are qualified for a tax credit.  The building will be completely exempt of a full year of property taxes.

• Credit is limited to a maximum of $2,500.
• To qualify, systems must adhere to national safety and operational regulations.

Property Tax Credit for Solar and Geothermal Systems – Howard County (Residential)

Residencies that utilize solar or geothermal systems on their property are eligible for a tax incentive of half the cost of installation and equipment (lesser value prevails), which is capped at $5,000 for solar panel photovoltaic systems.  Incentive is capped at $1,500 for solar water heating systems.

• Excess credit may be transferred over to the next two years, however this must not surpass property tax liability.

Property Tax Credit for Energy Conservation Systems – Montgomery County (Residential)

• Residencies that utilize solar or geothermal systems qualify for a credit covering 50% of the property taxes.
• Residencies that utilize conservation energy systems qualify for a credit covering 100% of the property taxes.
• Incentive is capped at $1,500 for systems used for water heating, $5,000 for systems used for electricity production or space heating and $250/year for conservation energy systems.

Property Tax Credit for Solar and Geothermal Systems – Prince George’s County (Residential)

Residencies that utilize solar or geothermal systems qualify for up to a 50% property tax credit, which includes installation and equipment costs.

• Incentive is capped at $1,500 for systems used for water heating and $5,000 for systems used for electricity production and space heating.

Use and Sales Tax Exemption for Solar Panel, Wind Energy and Geothermal Equipment (Residential/Commercial)

All solar, wind and geothermal equipment is completely exempt from Maryland sales tax.

• Qualifying systems: solar water heat, solar space heat, solar panel (PV), solar thermal, wind energy, geothermal heat pumps.

Solar Energy Grant Program – Maryland Energy Administration (Residential)

The MEA offers residents incentives to assist in the purchase and installation of PV systems and solar thermal systems.

Available grants:

• Solar water heating - $2,000 or 30% of the installation costs.
• Solar Panel (PV) systems - $1.25/watt DC for the initial 2 kW, $0.75/watt DC for the next 6 kW and $0.25/kW for the following 12 kW.  Awards are capped at $10,000.
• To qualify, systems must adhere to pertinent safety and operational regulations.
• Systems must not exceed 20 kW in size to be eligible.

Solar Renewable Energy Certificates – Maryland Public Service Commission (Residential/Commercial)

This is a market—based incentive that was enacted to require energy distribution companies to utilize renewable energy-derived power to produce a cleaner composition of energy usage in their retail sales.

Solar photovoltaic systems that generate electricity are eligible to take part in this incentive program.

• This incentive is dependent upon market stability, but is currently set at $0.36/kWh.  Incentive is capped at $0.40/kWh
• Systems must be grid-tied in order to qualify for this incentive.

Property Tax Credit for High Performance Buildings – Howard County (Commercial)

Commercial buildings in Howard County are eligible for a property tax credit if it utilizes renewable energy systems.  The more energy-efficient the building is, the greater the degree of both tax exemption and duration of exemption will be.

• Depending on the certification achieved and the type of building, property tax credits range from 10%-75% for 3 to 5 years.
• Buildings must adopt minimal LEED requirements (EB, NC or CS) or pertinent building codes stipulated a director of permits, inspections and licenses.
• Qualifying systems: Solar PV, wind turbine, solar space heat, solar water heat, passive solar space heat, geothermal pumps, small hydroelectric, biomass and daylighting.
• Attained property tax credits are appended to the property and do not change even if there is a change in property ownership.
• Building certifications and relative tax exemption percentages and durations can be found online or at the Howard County Government offices.

Net Metering (Residential)

Maryland offers net metering to utility company subscribers who produce electricity by using wind, solar, biomass, hydropower, or geothermal systems.  Systems must be equipped with gauges able to read the transfer of electricity both to and from the device.

• If there is any net excess generation (NEG) produced by a renewable energy system, the homeowner will be given credit on their monthly bill the following month.
• Systems must not exceed 2 MW in size.
• To be eligible, systems must adhere to all efficiency criteria.

Federal Tax Credit (Residential/Commercial)

Taxpayers are granted a personal tax credit of 30% of the total expenses, which include installation of residential solar-electric systems, solar thermal systems, fuel cells and labor expenses.  Residential wind energy installations and geothermal pumps are also subject to a tax exemption.

• Solar electric systems and solar thermal heaters have no cap on their incentive.
• If there is excess federal tax credit, it may be carried over to the subsequent taxable year.
• This may continue on through consecutive years until 2016, under which unused credit may or may not be expunged.

Federal Energy Conservation Subsidy Exclusion (Residential)

• Public utilities provide residential purchasers with an exemption of 100% of energy conservation subsidies.
• The overall worth of an installation or renewable utility regardless of the energy conservation capacity, will be excluded from the buyer’s gross income.
• Customers who participate in a utility company’s energy conservation program may be given a reduced rate of electricity utilized or a nonrefundable credit of the price of electricity on the customer’s monthly electric bill.

Energy-Efficient Mortgages (Residential)

With this federal loan program, homeowners may utilize energy-efficient mortgages (EEM) to either supplement or completely fund renewable energy systems.

 
Example: 4KW System – Residential Installation Cost

Average Electric Bill: $250/mo

Projected Annual Bill Escalation: 5%

Cost Per Watt: $6.50

-         Estimated System Cost: $26,000

-         Federal/State Tax Credit: $6,643

-         State/Utility Rebate: $4,000

-         Net Cost: $15,357

-         Cumulative Lifetime Savings (25 Years): $34,181

-         Investment Return: 8.9%

Savings of 41% on the total cost of your solar system through incentives