Baltimore, MD Solar Panels

Maryland’s Property Tax Exemption for solar energy systems ensures that adding solar panels to your home won’t increase your property taxes. When you install solar equipment, it typically increases your home’s value—but under this state law, that added value is completely exempt from property tax assessment. This means you get all the benefits of a more valuable home without paying higher annual property taxes on your solar investment.

The exemption applies to any equipment installed to use solar energy to generate electricity for your home or to feed back into the electric grid, as well as solar thermal systems that provide hot water. There’s no cap on the exemption amount, so whether you install a small residential system or a larger array, the entire value is protected. The exemption continues for as long as you own the solar equipment, providing ongoing savings year after year. This incentive works automatically once your solar system is installed and doesn’t require a separate application beyond your standard property tax assessment process.

Maryland’s sales tax exemption removes the state’s 6% sales tax from the purchase of solar energy equipment and systems. This means when you buy solar panels, inverters, batteries, and other qualifying solar equipment in Maryland, you won’t pay the sales tax that would normally apply to these purchases. For a typical residential solar system costing $25,000, this exemption saves you approximately $1,500 at the time of purchase.

This exemption is available to all Maryland homeowners and businesses purchasing qualifying solar energy equipment. There are no income restrictions, system size limitations, or application requirements—the tax exemption is automatically applied at the point of sale by your solar installer or equipment vendor. The exemption applies to both the equipment itself and the materials needed for installation. Keep in mind that while the equipment is exempt from sales tax, any labor or installation services may still be subject to tax depending on how they’re billed, so it’s worth discussing the invoice structure with your solar provider to understand your total costs.

The Maryland Solar Access Program (MSAP) is a state-funded grant program that helps income-qualified Maryland homeowners install solar panels on their homes. Established through the Brighter Tomorrow Act of 2024, this program provides direct financial assistance to eligible residents who want to generate clean energy at home. The program operates on a first-come, first-served basis and uses a two-step application process: first, you reserve your funding, then you verify your solar installation is complete.

The program has a total budget of $12 million for fiscal year 2026, with grant amounts calculated based on your specific system and circumstances using the program’s Maximum Offer Calculator. To qualify, you must meet the program’s income requirements and work with an approved contractor from the Participating Contractor List. Applications are accepted from July 21, 2025 through June 5, 2026, though funding may run out before the deadline since awards are made on a first-come, first-served basis.

Important considerations: Your solar contract must be signed on or after June 13, 2025 to be eligible. If your solar system has already received funding through Maryland’s Solar Energy Equity Grant Program, it cannot receive MSAP funding. The Maryland Energy Administration manages this program and provides detailed eligibility requirements, income guidelines, and application instructions in their Funding Opportunity Announcement available on their website.

Solar Renewable Energy Credits (SRECs) are tradable certificates that represent the environmental benefits of your solar energy production. For every 1,000 kilowatt-hours (1 megawatt-hour) your solar system generates, you earn one SREC. These credits have real monetary value because Maryland requires energy suppliers to obtain a certain percentage of their power from solar sources—14.5% by 2030. When suppliers purchase your SRECs, they’re meeting this requirement, and you receive payment for the clean energy your system produces.

The financial value of SRECs fluctuates based on market demand, and you have flexibility in how you sell them. You can work with an SREC aggregator who sells your credits as part of a group, sell directly to energy suppliers, or hold onto them for up to 3 years hoping for better prices. For example, a typical 10-kilowatt residential system producing 12,000 kilowatt-hours annually would generate 12 SRECs per year, providing an ongoing income stream on top of your electricity savings.

To participate, you must register your solar system with the Maryland Public Service Commission within 30 days of installation, then complete registration through PJM Interconnection’s Generator Attribute Tracking System (GATS). One important consideration: when you sell your SRECs, you’re transferring the environmental claim to your solar energy production. The buyer can then claim they’re using solar energy, not you. If maintaining the environmental bragging rights matters more than the income, you can choose to keep your SRECs instead of selling them.

Net metering in Maryland allows you to earn credits on your electric bill for the excess solar energy your system produces. When your solar panels generate more electricity than your home uses, that surplus power flows back to the grid, and your utility company credits your account at a 1:1 rate. This means you receive the full retail electricity rate for every kilowatt-hour (kWh) you send to the grid, which you can then use to offset future electric bills when your panels aren’t producing enough power (like at night or on cloudy days).

All six major Maryland utilities—Baltimore Gas & Electric (BG&E), Pepco, Potomac Edison, Delmarva Power, Southern Maryland Electric Cooperative (SMECO), and Choptank Electric Cooperative—offer net metering programs. Your excess credits roll over from month to month throughout the year, giving you flexibility to build up credits during sunny summer months and use them during winter. However, there’s an important annual reconciliation to understand: each spring (typically in April or May, depending on your utility), any remaining excess credits are “trued up” at a lower wholesale rate of approximately $0.04 to $0.07 per kWh, and your account resets to zero. This means you’ll receive payment for leftover credits, but at a reduced rate compared to the retail value you earned throughout the year.

One special consideration for BG&E customers: if you’re on one of the three time-of-use (TOU) rate schedules, you won’t be eligible for net metering. For all Maryland homeowners, the key to maximizing your net metering benefit is sizing your solar system appropriately—you want to generate enough power to cover your annual electricity needs without producing significant excess that would be settled at the lower true-up rate each spring.