Going solar has numerous benefits, from preserving environmental health to reducing utility bills and making a home more resilient against grid outages. However, many homeowners are not aware that the cost of solar may be even less than they think! Solar incentives and rebates are available at the federal, state, and even local levels to make residential solar panels affordable for homeowners ready to switch.
If you are considering a solar array for your home or business, take advantage of the many financial incentives to make this purchase even more beneficial. From tax credits to rebates and more, there are many options to decrease the cost of a solar installation.
Understanding Solar Incentives
Solar incentives are an entire category of potential cost savings for installing a solar array. Some are based on the size or production of the panels. In contrast, other incentives apply because the array was installed or because the homeowner elected to include other favorable elements, such as solar batteries. There are two primary types of incentives: tax credits and rebates.
Tax Credits and Exemptions
A “tax credit” is an incentive that constitutes a dollar value an individual can claim on their taxes. The amount of income tax they owe is directly reduced by the value claimed. In other words, a tax credit causes someone to pay less in taxes; the higher the credit, the less taxes owed.
Federal Tax Credit
The Federal Investment Tax Credit (ITC) is the primary tax credit available to most households in the U.S. It allows homeowners to claim a 30% tax credit based on the value of the solar system installed. If an individual does not owe enough in taxes to take advantage of the full value of the ITC, they may utilize a portion of it and save the rest for a future year.
Property and Sales Tax Exemption
Maryland has approved numerous financial benefits for those who choose a solar installation. Solar panels are exempted from property and sales taxes, which reduces the system’s upfront cost and establishes that homeowners do not pay more in property taxes due to the increase in property value that the panels provide.
Local Tax Credits
While Maryland manages numerous state rebate offerings, residents of certain counties can also find incentives specific to their location. Prince George’s County offers a property tax credit of up to $5,000, which may be extended into a second year if the designee does not owe enough taxes to use the tax credit in the first year fully.
Similarly, the counties of Harford and Anne Arundel also provide their property tax exemption, this time for 100% of the property tax bill (up to a maximum of $2,500) for the year the solar array was installed.
Solar Rebates
Rebates are financial incentives (such as money back) that a buyer receives solely for purchasing a product.
Residential Clean Energy Program
Maryland offers the Solar Access Program, which provides a rebate to homeowners who install solar. While there are income and installation documentation requirements, it is broadly accessible across the state.
SRECs
Solar renewable energy credits, or SRECs, allow homeowners to receive credit for the solar energy they produce. These SRECs may then be sold on the market to help utility companies meet their renewable energy goals. SRECs are currently worth around 50% more than they have been in previous years, so there is no better time than the present to take full advantage of Maryland’s SREC program.
Embrace Credits and Rebates to Bring Solar to Your Neighborhood
Solar panels are an important financial decision that can have long-lasting and positive effects on your home’s utility bills and value. Both federal and state-wide sources seek to make solar energy more accessible to families and businesses. Anyone considering making the switch should take full advantage of the credits, rebates, and other incentives that can lower the price of a solar installation.
The professionals at Energy Select can help you understand which incentives you qualify for and how to apply. Contact Energy Select today to schedule a consultation, get an instant estimate, ask questions about your solar viability, or learn more about complementary solar options, such as batteries. At Energy Select, we know energy!