Installing solar panels has many benefits, including lowering energy bills and reducing greenhouse gas emissions. However, many homeowners don’t realize the additional financial incentives available if they switch to residential solar. These take the form of “renewable energy credits” (REC).
These credits can help you recoup your installation costs and contribute to Maryland’s quest toward sustainability, provided you qualify and apply for the credits within the window. If you are considering installing a solar array for your Maryland home or business, continue reading to learn more about renewable energy credits and how to use them in your situation.
What are Solar Incentives?
Solar incentives include any financial benefit given to homeowners who install solar arrays in their residences or businesses. They can be offered at the state or federal level, helping legislators meet clean energy requirements while providing residents with access to benefits.
For example, Maryland has CARES (Clear and Renewable Energy Standard), which mandates benchmarks for clean energy production. By incentivizing homeowners to switch to solar, the state can more easily meet its quotas for energy renewability.
Additionally, local utility suppliers have their quotas for clean energy production. In Maryland, energy suppliers have the Maryland Renewable Portfolio Standard (RPS) to dictate their clean energy production goals. Offering homeowners solar incentives gives them an additional resource to meet these goals.
For example, power grids often go out during storms, leaving residences without power and local state suppliers at potential risk for liabilities involving spoiled food and medications, additional living expenses, and more. Solar panel arrays take pressure off the grid, reduce liabilities, and improve emissions, all while saving homeowners money on monthly energy costs.
What Are the Types of Solar Incentives?
Solar incentives can be broadly separated into three categories:
- Federal tax credits: These credits, also known as ITC or Investment Tax Credits, allow homeowners to claim a tax credit of up to 30% on significant home improvements such as solar array installations. This credit even has fine print for low-income homeowners, allowing them to save a portion of the credit they would have earned in a higher income bracket for a later year.
- Tax exemptions: In Maryland, solar panels are exempt from sales and property taxes. This allows homeowners to increase their property value for mortgage purposes without proportionally increasing their property taxes or paying extra on the initial installation.
- Local tax credits: Maryland offers several local tax credits by county and state. These include the Maryland Solar Access Program and the Renewable Energy Credit.
Regardless of the type of solar incentive offered, Maryland homeowners should consider them as an additional benefit to installing solar arrays.
What is the Maryland-Eligible Renewable Energy Credit?
The Maryland-Eligible Renewable Energy Credit (REC) is an example of a local tax credit offered in Maryland as part of CARES. A REC gives Maryland homeowners a financial incentive to invest in clean energy through credits. The number of credits a home earns is calculated per 1 Megawatt-hour (MWh) of solar energy it produces.
These credits can be sold to utility companies to help them meet their goals for renewable energy, such as the new quotas laid out in the Maryland Renewable Portfolio Standard. This allows state suppliers to benefit from residential solar installations. At the same time, homeowners can lower their energy bills and pay back their installation costs sooner.
Maryland is currently offering a 150% renewable energy credit and additional tax rebates as part of a subsidy program initiated by the 2024 Brighter Tomorrow Act. For solar panel arrays installed on July 1, 2024, or later, homeowners can apply for the program provided they meet certain criteria. These include:
- Being located in Maryland
- Being eligible for the RPS (renewable portfolio standards)
- Installing the array between July 1, 2024 and January 1, 2028
- Meeting minimum and maximum energy output requirements
Visit the Maryland Solar Access Program website to learn more about your eligibility for RECs.
Schedule a Consultation With an Experienced Solar Panel Installer to Learn More
Maryland provides numerous solar incentives for homeowners who have installed solar panel arrays. Using credits, homeowners can help utility suppliers meet clean energy mandates. At the same time, homeowners reap the benefits of using solar power, which include lower utility bills, a cleaner environmental footprint, resistance to outages, and more.
At Energy Select, our experienced team of solar panel installers offers high-quality installations customized to your home’s needs. Our installations help homeowners qualify for Maryland’s Renewable Energy Credits while increasing their property value and lowering their energy costs.
Contact our team today to learn about our solar energy solutions and how you can qualify for RECs. We take pride in helping homeowners meet their goals for renewable energy installations in Maryland, including assisting them in qualifying for these essential benefits in financially trying times.