Solar Guide

Maryland’s Property Tax Exemption for solar energy systems is a state-level incentive that removes solar installations from your property tax calculations. This means that when you install solar panels or other qualifying solar equipment on your home, the added value from that equipment won’t increase your annual property tax bill. The exemption applies to both solar photovoltaic systems that generate electricity and solar thermal systems that provide hot water.

The financial benefit varies based on your home’s location and local tax rates, but it can save you hundreds of dollars annually. For example, if your solar system adds $20,000 in value to your home and your local property tax rate is 1%, you would save $200 per year in property taxes. The exemption applies to all types of solar energy property installed on residential, commercial, or industrial structures, including equipment that generates electricity for on-site use or feeds power back to the electric grid. There are no income restrictions, system size limits, or application deadlines – the exemption automatically applies once your solar system is installed and remains in effect for as long as you own the equipment.

Maryland’s Sales Tax Exemption for solar energy systems allows homeowners to purchase solar equipment without paying the state’s 6% sales tax. This means when you buy solar panels, inverters, batteries, and other qualifying solar equipment, you won’t pay any Maryland sales tax on these purchases, providing immediate savings on your solar installation costs.

The financial benefit varies based on the total cost of your solar system, but typically saves homeowners hundreds to thousands of dollars. For example, on a $20,000 solar system, you would save $1,200 in sales tax. This exemption applies to all qualifying solar energy equipment and components purchased for residential use.

To qualify, the solar equipment must be designed specifically for solar energy generation and storage. The exemption covers solar panels, inverters, mounting hardware, batteries, and other essential system components. There are no income restrictions or system size limitations for homeowners to take advantage of this benefit.

This exemption is automatic at the point of purchase – you don’t need to apply separately or wait for a rebate. Your solar installer should apply the exemption directly when you purchase your system. The savings are immediate and reduce your upfront solar investment costs, making clean energy more affordable from day one.

The Maryland Solar Access Program is a state-funded grant program that helps eligible Maryland residents install solar panels on their homes. Created through the Brighter Tomorrow Act of 2024, this program provides direct financial assistance to make solar energy more accessible and affordable for homeowners who meet specific income requirements.

The program operates on a first-come, first-served basis with a two-step application process. First, eligible homeowners reserve funding through an initial application. Then, they have 180 days to complete their solar installation with an approved contractor from the state’s participating contractor list. The exact grant amounts are not specified in the available information, but the program has a $15 million budget for fiscal year 2025.

To qualify, homeowners must meet income requirements detailed in the program’s funding announcement. Only solar systems installed by contractors on the state’s approved participating contractor list are eligible. Importantly, homes that have already received funding from Maryland’s Solar Energy Equity Grant Program cannot participate in this program.

The FY25 program stopped accepting applications on June 13, 2025, but the FY26 program will open in July 2025. Homeowners interested in future rounds should note that solar contracts executed on or after June 14, 2025, may be eligible for the upcoming FY26 program, provided their contractor is approved for participation.

Solar Renewable Energy Credits (SRECs) are special certificates that Maryland homeowners earn for every 1,000 kilowatt-hours (1 megawatt-hour) of solar energy their system produces. Think of them as rewards for generating clean energy – you get one SREC for each megawatt-hour your solar panels create. These credits can be sold to energy suppliers who need them to meet Maryland’s renewable energy requirements, providing an additional income stream beyond your electricity savings.

While the source doesn’t specify exact dollar amounts, SRECs have market value that fluctuates based on supply and demand. A typical 10 kW home solar system producing 12,000 kilowatt-hours annually would generate 12 SRECs per year. To participate, you must register your solar system with the Maryland Public Service Commission within 30 days of installation, then register with PJM’s Generator Attribute Tracking System (GATS). SRECs have a 3-year lifespan, so you can hold them hoping for better prices or sell them immediately through aggregators or directly to suppliers.

Important consideration: If you sell your SRECs, you can no longer claim to be using solar energy yourself – the buyer gets those environmental bragging rights. However, the environmental benefits remain the same regardless of who owns the credits. This program supports Maryland’s ambitious goal of achieving 14.5% solar energy and 50% total renewable energy by 2030.

Net Metering in Maryland allows homeowners with solar panels to receive full retail credit for the excess electricity their system produces and sends back to the grid. When your solar panels generate more power than your home uses during sunny periods, that extra energy flows into the electrical grid and you receive a 1:1 credit on your electric bill – meaning you get the same rate you pay for electricity from your utility company.

The financial benefit works on a monthly rollover system where unused credits accumulate from month to month throughout the year. However, each utility company handles the annual settlement differently: Baltimore Gas & Electric, Pepco, and Potomac Edison cash out excess credits in May at a reduced rate of $0.05-$0.07 per kWh, while Delmarva Power and Choptank Electric Cooperative settle accounts in April at their commodity rate. Southern Maryland Electric Cooperative also uses a similar reduced rate structure of approximately $0.04-$0.05 per kWh for annual settlements.

This program is available to residential solar customers across all major Maryland utilities, though Baltimore Gas & Electric customers should note that Time-of-Use rate schedules are not compatible with net metering. The key consideration for homeowners is that while you receive full retail credit during the year, any substantial excess generation will be compensated at lower wholesale rates during the annual true-up period, making it important to size your solar system appropriately for your home’s energy needs.