Hey there! If you‘re a homeowner in Maryland interested in going solar, you‘ve come to the right place. Installing solar panels can be a big investment, but the Old Line State offers some incredibly generous incentives to dramatically lower the cost. As an experienced solar analyst, let me walk you through all the ways you can save money on solar panels in Maryland. I‘ve crunched the numbers, and you might be surprised just how affordable solar can be!
Since 2015, Maryland has quadrupled its solar energy output from 258 MW to over 1,000 MW. This massive growth is thanks to the state‘s ambitious renewable energy goal of 100% clean power by 2040. With a target that bold, there‘s never been a better time for Marylanders like you to go solar.
The key is taking advantage of the many solar incentives, rebates, tax credits, and other programs offered in the state. I‘ll break down each one so you know exactly how to maximize your savings. Stick with me!
Federal Solar Tax Credit – Up to $6,500 Back
The federal solar tax credit is the best place to start. This program offers a 26% tax credit for systems installed in 2023. That means 26% of your total solar costs—equipment, installation labor, permits, literally everything—can be deducted from your federal taxes.
For a typical 6 kW system costing $25,000 in Maryland, you could get back $6,500! The credit will decrease to 22% in 2024, so act fast. Just remember you must own the system, not lease it, to qualify.
Maryland Solar Energy Grant Program – $1,000 Rebate
Maryland also offers a state grant program that pays out $1,000 for residential solar arrays of at least 1 kW. Straight cash back! The program has limited funding each year, so apply early.
In 2022, the program accepted applications from July 1 to October 31. Check the Energy Administration‘s website for details. A $1,000 rebate effectively lowers your out-of-pocket costs and sweetens the return on investment.
Net Metering – Monthly Bill Credits
Maryland has a fantastic net metering policy. This requires your utility to buy any excess power your solar panels generate during the day that isn‘t immediately used in your home. That extra solar energy gets credited back on your bill at the full retail electricity rate – for both generation and distribution.
Even better, those credits roll over month to month for a full year. So solar overproduction in the sunny summer helps offset your bill in the darker winter when solar output is lower. Any leftover credits get paid out to you in cash at the end of the 12-month cycle!
With net metering, it‘s like your panels keep generating savings all year long.
SRECs – Generate Over $650 Per Year
Maryland is one of the best states for solar renewable energy credits, aka SRECs. Here‘s how they work:
For each 1,000 kWh of power your solar system produces, you‘ll earn one SREC. A typical 6 kW array can generate around 13 SRECs per year. Maryland utilities are required to buy these credits, usually at around $50 each.
So if your 6 kW system produces the expected 13 SRECs annually, you‘d make $650 per year by selling them! That‘s $650 in passive income, year after year, just for going solar. Not too shabby!
No Sales Tax on Solar Equipment
Maryland offers a huge upfront discount by exempting all solar equipment purchases from state sales tax. With the average 6 kW system costing around $25,000 before incentives, avoiding the 6% sales tax saves you $1,500!
Every dollar counts when going solar. And this tax exemption lowers your overall system cost from day one. Plus, you can still claim the full pre-tax amount for federal tax credits.
No Property Tax Increase
Many homeowners worry that adding solar will increase their property tax bill. But Maryland specifically prohibits towns from raising your property taxes due to solar improvements.
This perk maintains the tax advantages of homeownership. Given solar can increase home value by around 4% on average, your future tax bills would have been substantially higher without this exemption.
30% Credit on Battery Storage
More Marylanders are pairing solar with home battery storage, like the Tesla Powerwall, for maximum energy independence. The state offers a 30% tax credit on battery systems, up to $5,000.
That means you can install a $10,000 Powerwall for only $7,000 after the credit! When combined with the federal tax credit on the full cost, you could end up with a 60% discount on batteries.
Now you can store extra solar energy for use anytime – like at night or during an outage. And Maryland rewards you for it!
Income Tax Subtraction for Sale of SRECs
I mentioned earlier how you can generate income selling your solar renewable energy credits each year. Maryland also allows you to subtract that SREC revenue from your state income taxes.
So if your 6 kW system produces $650 per year in SRECs, you could entirely avoid state income tax on that amount. It‘s yet another way to come out ahead financially with solar in Maryland.
Do Solar Loans Make Sense?
With all those incentives lowering the cost, you may be able to buy a solar system outright instead of taking out a loan. This allows you to maximize the federal tax credit and net metering savings.
But solar loans can still be a good option thanks to low interest rates. One benefit is you can finance 100% of the system cost with $0 down. And monthly loan payments are often less than your utility bill savings from day one.
I‘d be happy to run the numbers with and without a loan so you can see which is better financially. There are lots of flexible options out there!
Leasing Not Recommended
While you can lease solar panels in Maryland, I generally don’t recommend it. Leasing prevents you from claiming the federal tax credit and selling SRECs. You also won‘t get the full net metering benefit or state rebates.
In most cases, leasing ends up costing more in the long run. Ownership is the way to go to maximize savings in Maryland. But I‘m happy to compare leasing vs buying options too!
Maryland Is Serious About Renewable Energy
It’s clear Maryland is serious about expanding solar energy with incentives this good. The state passed an ambitious Renewable Portfolio Standard that requires 50% renewable electricity by 2030. Out of that, 14.5% must come directly from solar.
This regulatory mandate ensures Maryland will continue pushing incentives to hit those targets. By installing solar soon, you can take advantage of current programs before they change down the road.
Let‘s Break Down Your Savings
Now that you know all the incentives available, I want to estimate your actual solar savings in Maryland. Based on a typical 6 kW system:
- Federal tax credit: $6,500
- State grant: $1,000
- Sales tax exemption: $1,500
- SRECs: $650/year
- Net metering: $1,000+ per year
That‘s over $10,000 back in your first year alone, not counting the value of future SRECs and net metering credits. Depending on your specific home and energy use, solar pays for itself in 5-7 years with incentives this strong.
And remember, electricity rates keep rising over time. So your bill savings from solar will grow each year too.
See If You Qualify for Low-Income Programs
Maryland also offers solar incentives specifically for low-to-moderate income households. If your income falls below certain thresholds, you may qualify for additional grants, free technical assistance, and more.
Contact your utility company or local solar non-profit to learn more. Shared community solar programs are also expanding access to solar savings for all Marylanders.
Ready to Explore Solar?
I hope this overview gets you excited about all the solar savings waiting for you in Maryland, my friend! With the federal tax credit, state rebates, SRECs, net metering, and more, this is the perfect time to go solar.
Of course, every home is unique. I‘d be happy to provide a free, customized analysis of your potential solar savings and payback timeline. Just let me know! I‘m here to answer all your questions and make sure you maximize incentives for the best possible deal.
Let‘s chat more about your goals. I can explain our full process and show you solar designs for your roof. With the right support, you can start benefiting from lower energy bills and renewable power that pays for itself. Going solar is an exciting next step – now is your chance!