Maryland

Maryland State Flag

Solar Incentives for Maryland

Maryland is a Mid-Atlantic state that gets an abundance of solar exposure all year round. The state gets an average of over 213 days of the sunshine and a good average temperature. Across the state, from the Eastern Shore to Harford and Howard counties, are many miles of solar energy installations. Information from the Maryland Energy Administration indicates that the state is exposed to about 5.3-kilowatt hours per square meter of solar energy daily.

Solar energy continues to grow in the state as homeowners and businesses alike turn to solar energy because it is cleaner and affordable long-term, and away from traditional fossil fuels which are dirtier and less affordable long-term. The reason for the enormous success and continued growth of solar energy in the state is the interest and incentives from the federal and state government.

Solar is very popular in Maryland because of the high cost of residential electricity. Maryland’s electric rates are in the top 25% of states in the nation.  Data from the U.S. Energy Information Administration (EIA) indicates that January 2017 residential electricity rates in the state averaged over $14.25 cents per kilowatt hour. These rates will continue to grow as seasonally distributed charges continue to increase. In Maryland, the Maryland Public Services Commission oversees local utility companies. These local utilities deliver homeowners electricity and charge monthly for these services.

State Specific Rebates and Incentives for Maryland

As early as 2017, it costs between $12,600-$15,500 after the 30 percent federal tax credit for solar has been added for an average 5 kW residential solar system installation in Maryland. Considering that the average homeowner will spend more than $72,000 in electrical utility bills over the period of 25 years, makes this upfront investment very affordable and worthwhile in the long-term.

Installing larger residential solar energy systems above the US average size of 5kW to a system size like 10kW, for example, will cost more, but this will provide the homeowner more savings long-term as the system will produce much more electricity. In other words, more money out of pocket, with significant reductions in utility electricity use. While the exact cost of a solar energy system depends on the applicable solar rebates and utility incentives available in specific areas; and the type of solar system installed, most solar energy companies in Maryland offer several options to help reduce the cost of installing solar energy systems.

These options range from $0-down, low-interest solar loans to solar leases which the homeowner pays nothing out of pocket. Then there is the Power Purchase Agreement (PPA) option which a third party owns and installs the solar energy system on the homeowner’s roof and sells the power to the grid. All these options are increasingly becoming popular, not only because it helps homeowners afford solar energy system installations but because they help maximize their solar savings.

Solar energy helps homeowners produce clean, affordable, and reliable electricity. Homeowners in Maryland benefit from valuable incentives on the local, state, and federal levels when they install solar energy systems on their rooftops.


1. Net Metering:
Maryland, like most states in the United States, also has a net metering program that requires utility companies in the state to compensate homeowners for the energy they feed into the grid at retail rates. This is beneficial for homeowners because the retail rates for net metering are very competitive when compared to the rates large utility power plants get paid for the electricity they provide to the Maryland electric grid.

Net metering is an awesome program because it helps homeowners maximize their solar energy investments. It lets homeowners get the full benefit from the production capacity for each kWh of electricity their system produces up to 100% of their electricity usage over the course of a year, thus not wasting this excess energy produced.

With net metering, homeowners get a special electric meter that spins forward when electricity flows from the utility into the home, and backward when electricity flows from the home to the utility.

Learn more and apply click here.

2. SREC in Maryland:
Under Maryland law, an SREC represents the generation attributes of 1 megawatt-hour (MWh) of electricity generation (or equivalent) from a qualifying solar facility. Utility electricity suppliers must purchase and retire solar renewable energy credits (SRECs) to meet their compliance obligations under the law, or pay a Solar Alternative Compliance Payment (SACP) for any shortfalls in SREC purchases.

SREC credits are generated when solar panels produce electricity. An SREC credit is created for every megawatt-hour (MWh) of electricity produced by a solar energy system. The homeowner can decide to sell the SRECs in Maryland to electrical utilities, who need to purchase them to comply with the state’s renewable portfolio standard or RPS. It’s important to note here that SRECs are sold separately from the electricity produced by the solar energy system.

Learn more about SRECs and how to sell them here.


II – Tax Credits/Rebates


1. Solar Federal Investment Tax Credit:
Maryland participates in the federal Investment Tax Credit (ITC) for solar which can help homeowners reduce the upfront cost on a solar energy system by up to 30%. This tax credit of solar energy system cost can amount to a savings of $4,875.

This is a personal federal tax credit for residential installations on a dwelling used as a residence by the taxpayer. If the federal tax credit exceeds the tax liability, the excess amount may be carried forward to the next taxable year. However, this incentive only applies to homeowners with cash or loan purchase of a solar energy system. This very generous incentive is extended till 2019 where it will steadily decrease through 2021.

Learn more about the ITC and how to apply here.

2. Maryland Residential Clean Energy Grant Program
The State of Maryland offers a solar rebate program administered by the Maryland Energy Administration (MEA).
Each homeowner who purchases a solar electric system sized less than 20 kW is eligible to receive a $1,000 grant rebate from MEA.  These grants are, however, allocated on a first come/first served basis and subject to change in amount and existence due to funding availability.  An important note is they are not currently available for homeowners who “go solar” through a power purchase agreement or lease.

Learn more about this grant here.

3. Local Solar Tax Credits in Maryland
The interesting thing about Maryland is the fact that most counties, statewide, are offering their own solar rebates and incentives to help homeowners install solar energy systems.

For example, Anne Arundel County offers Local Property Tax Credits up to 50% of your total installation costs capped at $2,500, Baltimore County also offers Local Property Tax Credits up to 50% total installation costs or $5,000, determined by the homeowner’s property taxes. Harford County also offers Local Property Tax Credits up to $2,500, and Prince Georges County’s Local Property Tax Credits offers up to 50% of the total installation costs (up to $5,000).

Tax credits and rebates for solar energy system installation projects, encourage clean technology advocates and perplex renewable energy opponents. While recent advances in research help, solar panels generate clean electricity far more efficiently and cheaply, it is hard to argue against the role tax credits, and other financial incentives play in helping the rapid adoption of residential solar energy in Maryland.

The state of Maryland has aggressively pursued the goal of generating 1,250 megawatts of electricity through renewable sources. Maryland currently has over 637.8 megawatts of installed solar energy capacity, with over 248.3 megawatts in 2016 only. Over 68,000 homes in the state have installed solar energy systems; this ranks the state 15th nationally.  

According to the Solar Foundation, rooftop solar energy installations and maintenance are driving massive employment rates in Maryland. Over $1,984.24 million has been invested in the industry with $645.51 million in 2016 alone employing over 5,429 people.

Solar is favored in Maryland. So much that in 2001, the state legislators passed a law mandating that 6 percent of all electricity consumed in government buildings come from renewable sources including solar energy. This is a powerful move in support of solar energy technology, which means that there will be a lot more solar energy installs soon.

Thanks to tax credits and rebates from federal, state and local governments, solar power prices are competitive with other energy sources. Maryland solar incentives help homeowners like you go solar. From Baltimore and Annapolis to Columbia and Frederick, join the +50,000 Maryland homeowners saving with solar by contacting us for a no-obligation review to see if solar will work for you.

SaveSaveSave