Now more than ever, home and business owners in Maryland are transitioning to solar energy. From increases in the efficiency of systems to Maryland solar tax credits that incentivize switching, many factors are driving the increased interest in renewable energy. For those still on the fence about whether a solar array is right for them, being aware of the many incentives available to make solar more affordable can help better inform that decision.
Maryland offers numerous financial programs to encourage residents and businesses to join the movement toward green energy. Tax credits, exemptions, and other incentives all result in lower costs, decreased taxes, and even the possibility of exchanging excess power for utility credits. Here are the main Maryland solar tax credits and other programs that make solar more accessible.
Maryland Solar System Sales Tax Exemption
For some, one of the biggest factors influencing their decision to go solar is the cost. They may worry that while the cost of the solar system itself is manageable, the sales tax on the entire purchase may push the project outside their budgetary constraints.
For this reason, the Maryland has created a solar system sales tax exemption, which exempts Maryland taxpayers from having to pay sales tax on their solar equipment. The final price of installation is just that—final, with no additional sales tax added.
Maryland Renewable Energy System Property Tax Exemption
Another reason that some people may not have embraced solar yet is because they fear what an array will do to their property value. Some people assume that the energy cost savings will be offset by an increase in property taxes each year, since the solar installation will add value to their home.
Maryland’s renewable energy system property tax exemption prevents this scenario. Maryland home and business owners will not be taxed on the property value added by the solar array.
Maryland Energy Storage Income Tax Credit
Not all of Maryland’s solar incentives are exemptions. The energy storage income tax credit provides a one-time credit to property owners who install some type of energy storage, such as a solar battery. The credit is worth 30% of the cost of the system or $5,000, whichever is less.
Property Tax Credit for Solar Devices
On a more localized level, some jurisdictions offer their own credits and incentives for solar installations. In Baltimore, Harford, Montgomery, Prince George, and Anne Arundel counties, residents can claim a credit on their property taxes for a solar panel system. How much the credit is worth varies by location, but the value ranges from 50% to 100% of the system cost.
Other Incentives
Maryland is home to quite a few solar tax credits and exemptions on a local and state level. However, other types of incentives also exist that do not fall into these categories. They include:
Net Metering
Maryland participates in a net metering program with its utility providers. Net metering is a system in which a home can install a specialized energy meter that can both receive and output energy. When a home or business’ solar array produces more energy than the structure uses, that excess can be returned to the municipal grid for other buildings to use.
In exchange for this extra energy, the utility company credits the home that produced it—typically with credits on their energy bill. In this way, homes can earn extra compensation for producing more energy than they use. In some cases, homeowners elect to store their energy in a solar battery and then tap into the battery during peak usage times, when the compensation for excess solar production is at its highest.
Federal Tax Credit
Maryland residents can benefit from the federal solar investment tax credit, also called the ITC. This credit reduces a property owner’s tax liability by 30% of the cost of the solar installation. However, in order to take advantage of this option, home or business owners must owe taxes. If they do not owe sufficient taxes to fully realize the value of the tax credit, they can roll the value of the credit over up to five years so that they do not lose any of the value of the incentive.
Embrace Solar Power With Energy Select
A solar installation is an important choice, whether you are a homeowner or a business owner. Maryland is making solar power more accessible and affordable through its variety of tax credits, exemptions, and other incentives. By taking full advantage of these offerings, you can maximize the return on investment of a system and go solar sooner. The experts at Energy Select make solar solutions a simple part of your home’s energy plan. Contact Energy Select to schedule a free quote or to ask any questions about the process.