Maryland - Energy tax credit, solar rebates and incentives

Maryland Renewable and Solar Energy Incentives

Maryland is a Great Solar State

Maryland is a state with lots of sunshine and laws that have long been favorable for solar power.  In 2001 Maryland required that six percent of state structures' electricity originate from renewable energy.  Maryland was right up near the head of the line of states to pass this type of law.  Since then renewable energy use by all state government structures has increased steadily -- by 2010 all Maryland state buildings had reduced their energy utilization (from non-renewables) by 15%.  Keep in mind that the Federal Government currently offers a 30% tax credit for the whole installed cost of your system.  That, combined with Maryland's favorable renewable energy laws is a huge benefit to Maryland home and business owners committed to going solar.

Maryland Renewable Portfolio Standards

Maryland has very stringent RPS (Renewable Portfolio Standards).  The state requires that by the year 2022, 20% of all energy shall originate from sustainable sources such as wind, solar, biomass, and geothermal.  Utilities must meet the standards by producing renewable energy or purchasing it from their customers.  They must pay penalties if the standards aren't reached.  Rather than shelling out lots of money, utilities in strong RPS state offer solar incentives to homeowners to enable them to go solar (and in doing so, help the state reach compliance with RPS standards).  Maryland offers many solar incentives to help it comply with its excellent RPS standard.

Maryland RPS Solar Carve Out

Solar carve outs require a certain percentage of the Renewable Portfolio Standards be met with solar energy.  Maryland's solar carve out is 2% by 2022 -- a 2007 change to the RPS obligates utilities to produce a minimum 2% of their energy from clean energy from the sun by 2022.

Maryland State Electric Rates

Maryland's electric rates are in the top 25% of states in the nation.  A state's electric rates are one of the key factors in predicting whether an investment in solar panels makes sense.  The reason for this is simple:  solar power is in direct contention with electric rates.  Low electric rates make it hard for you to achieve significant payback from your solar power investment.  Higher electric rates make an investment in solar energy much more feasible.  Maryland's higher electric rates make investing in solar power very attractive.

Maryland Net Metering

Maryland offers net-metering.  This is a real plus for purchasers of renewable energy.  Net metering is a system in which home solar panels or other renewable energy generators are linked to a public-utility power grid and surplus power is transferred into the grid, allowing customers to make up for the cost of power drawn from the utility.  When you generate electricity from your solar array for your home or business, it lessens the amount of energy you purchase from your electric utility.  It also reduces your monthly electricity bills.  If your system produces more energy than you need, the excess power is sold back to the grid.  That amount of energy is deducted from your monthly bill or credited toward a future bill.

Maryland Interconnection Standards      

Maryland has strong Interconnection standards.  Interconnection standards are requirements for connecting solar and other electrical generation systems to the grid.  These rules apply to both electricity customers and utilities.  Strong interconnection standards make it easier for your utility to offer net-metering.  This is a definite advantage when trying to bring a solar energy system online and makes it much easier for a solar power system to make financial sense.

Maryland Energy Rebates

Maryland offers solar power rebates.  Solar power rebates are incentives the federal or state governments offer to reduce the cost of going solar.  Click here for the current rebate available in Maryland through the Clean Energy Grant Program (for up to 20kW arrays).  You can get a single large payment or your installer will take the amount off the final installed price.  Rebates require paperwork to be filed.  Many times installers will handle the paperwork.

Maryland State Tax Credits for Energy

Maryland offers state tax credits.  Click here to see the amount of Maryland's state tax credit. A state tax credit allows you to take the amount directly off your tax payment, rather than as a deduction from your taxable income.  You can claim the credit for your primary residence, vacation home, and for either an existing structure or new construction.  (Don't forget that you can also benefit from the 30% Federal Solar Tax Credit -- there is no cap on that credit.)

Maryland Solar Power Performance Payments (Performance-Based Incentives)

Maryland offers Solar Power Performance Payments, also know as production incentives.  Solar Power Performance Payments provide cash payments based on the number of kilowatt-hours (kWh) or BTUs generated by a renewable energy systems.  Payments based on a system's actual performance are much more effective than payments based on a system's rated capacity.  Electricity produced is credited as Solar Renewable Energy Credits (SRECs).

Maryland Property Tax Exemptions for Energy

Maryland offers property tax exemptions for installed solar system.  Property tax exemptions allow businesses and homeowners to exclude the added value of a system from the valuation of their property for taxation purposes.  A Solar PV system can make your home worth more.  Multiply your yearly electricity savings by 20 to find the  increased value of your home.  (A 5kW Solar PV array adds approximately $17000 to your home's worth.)  A property tax exemption makes it more economically feasible for a taxpayer to install a solar system on a residential or commercial property.   

Maryland Sales Tax Exemptions for Energy

Maryland offers sales tax exemptions.  A sales tax exemption means that homeowners and businesses would not have to pay any state sales tax on their solar panel system.