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Maryland offers a couple of great solar incentives. These policies increase the amount of money your system can generate while helping reduce the up-front cost of solar. Combined with the 26 percent federal Investment Tax Credit (ITC), you can start earning and saving more money sooner.
Residential Clean Energy Grant Program
The Maryland solar rebate program will pay eligible homeowners $1,000 to install a qualified solar PV system. The system must be under 20 kilowatts (kW) and installed at the owners’ primary home address by a NAPCEP certified solar installer.
Solar Renewable Energy Certificates (SREC)
The state of Maryland created a renewable portfolio standard goal to generate 20 percent of its energy consumption from all forms for renewable resources, including solar power, by 2020. To reach this goal, you are given one Maryland SREC for every megawatt-hour (MWh) of solar energy your system produces. These credits can be then sold to your local utility at the market rate. Prices range from $5 fo $22 meaning if you generate 8 MWh you could earn up to $160 per year.
Property Tax Exemption
Compounding from the above incentives and rebates, Maryland provides a couple of tax breaks so your tax bills will not go up as a result of switching to solar. The property tax exemption for solar PV systems makes sure you do not pay any extra taxes because of the increased value of your home when you invest in solar in Maryland.
Sales Tax Exemption
When you purchase a brand new solar PV system you will not pay any sales tax, saving you hundreds.
Net Metering in Maryland
Maryland’s net metering policies compensate you for providing clean electricity to the local utility grid. When you generate more solar power than you are consuming, the excess “spins your meter backward” earning your energy credits. These credits are valued at the retail-rate and accumulate over the year. During times of generating less energy than you need (e.g., at night), the credits are drawn upon. In essence, the grid is acting as a free battery for your solar PV system.
Federal Solar Tax Credit
Thanks to the landmark Investment Tax Credit (ITC), you can cut the cost of your solar PV system by 26 percent through this credit on your federal tax liability. Eligibility is simple. The solar tax credit applies only when systems are purchased outright with cash or with a solar loan and must have enough income for the tax credit to be relevant. For those who do not have any federal tax liability, this credit does not apply to you.
- 2020: Owners of new residential and commercial solar can deduct 26 percent of the cost of the system from their federal tax liability.
- 2021: Owners of new residential and commercial solar can deduct 22 percent of the cost of the system from their taxes.
- 2022 Onwards: Owners of new commercial solar energy systems can deduct just 10 percent of the cost of the system from their taxes. There is no federal credit for residential solar energy systems.
USDA REAP Grant for Solar
The United States Department of Agriculture (USDA) offers agricultural producers and rural small businesses grant funding and up to 85% loan guarantees through the Rural Energy for American Program, or more commonly know as the REAP Grant.
While we recommend the USDA REAP Grant for solar projects, you may also apply it to other renewable energy generation systems as well as energy efficiency upgrades.
Accepted Renewable Energy Systems
Using the USDA Grant for solar just one option of many you have. Depending on your geographic location, a different renewable energy system may be more viable.
- Biomass – including biodiesel, ethanol, anaerobic digesters, solid fuels, etc.
- Geothermal – for the generation of electricity or for direct use
- Hydropower – less than 30 megawatts
- Hydrogen fuel cells
- Wind power generation
- Solar energy generation
- Ocean power generation – tidal, current, or thermal
Accepted Energy Efficiency Upgrades
The best way to save energy is by not needing to produce it in the first place. Take advantage of the USDA REAP Grant to improve the energy efficiency of your business potentially saving you thousands of dollars each year.
- Installing high-efficiency HVAC systems
- Insulation improvements
- Lighting improvements
- Cooling or refrigeration units or improvement of existing units
- Door and window insulation improvements
- Installation of electric, solar, or gravity pumps for sprinkler pivots
- Transitioning from diesel irrigation motors to electric motors
- Replacing other qualifying inefficient equipment