Bethesda, MD Solar Panels

Maryland’s Property Tax Exemption for solar energy systems means that when you install solar panels on your home, the added value they bring to your property won’t increase your property taxes. Normally, home improvements that increase your property’s value result in higher property taxes, but Maryland law specifically exempts solar energy equipment from this assessment. This allows you to enjoy the increased home value that comes with solar without the ongoing tax burden.

The financial benefit of this exemption continues for as long as you own the solar system and live in your home. Since solar installations typically add thousands of dollars to a property’s value, this exemption can save you hundreds of dollars annually in property taxes. The exemption applies to any equipment installed to use solar energy to generate electricity for use in your home or to supply to the electric grid, as well as solar thermal systems that provide hot water. There are no application deadlines or time limitations—the exemption automatically applies to qualifying solar installations on residential properties throughout Maryland.

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 requirements, system size limits, or application processes—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 make solar energy more accessible and affordable for eligible residents. The program operates on a first-come, first-served basis and uses a two-step application process: first, you reserve funds, then you verify installation completion.

The program has a total budget of $12 million for fiscal year 2026. Grant amounts vary based on individual circumstances, and you can use the program’s Maximum Offer Calculator to estimate your potential benefit. To qualify, you must meet specific income requirements detailed in the program’s Funding Opportunity Announcement. Your solar system must be installed by an approved contractor from the program’s Participating Contractor List, and your contract must be executed between June 13, 2025, and the application deadline.

Applications are accepted from July 21, 2025, through June 5, 2026, at 12:00 PM ET. Important note: if your solar system has already received funding from Maryland’s Solar Energy Equity Grant Program, it is not eligible for this program—no exceptions are made. You can track your application status through the program’s online portal, and approved contractors can apply on your behalf with proper documentation.

Solar Renewable Energy Credits (SRECs) are tradable certificates that represent the environmental benefits of solar energy production. For every 1,000 kilowatt-hours (1 megawatt-hour) your solar system generates, you earn one SREC. These credits exist because Maryland law requires electricity suppliers to obtain a certain percentage of their power from solar sources—14.5% by 2030. When suppliers can’t generate enough solar power themselves, they purchase SRECs from homeowners like you to meet their legal requirements.

The financial value of SRECs fluctuates based on market demand, and you have several options for managing them. You can sell your SRECs directly to energy suppliers, work with an SREC aggregator who sells them on your behalf, or hold onto them for up to three years in hopes of better pricing. For example, a typical 10-kilowatt residential 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 enroll in PJM Interconnection’s Generator Attribute Tracking System (GATS) to track and manage your credits.

One important consideration: if you sell your SRECs, you’re transferring the environmental claim to the buyer—meaning you can no longer say you’re using solar energy yourself, even though your panels are producing it. The buyer of your SRECs gets those bragging rights. However, whether you keep or sell your SRECs, your solar system still benefits the environment by generating clean energy and helping Maryland reach its sustainability goals.

Net metering in Maryland allows you to receive credit for the excess solar energy your system sends back to the electric grid. When your solar panels produce more electricity than your home uses, that surplus energy flows to the grid, and your utility meter essentially runs backward. You receive a credit on your electric bill for each kilowatt-hour (kWh) you contribute, valued at the same retail rate you pay for electricity—this is called 1:1 net metering. These credits accumulate month to month, helping offset your electric bills during times when your solar system produces less energy, such as during winter months or cloudy periods.

At the end of the annual reconciliation period, any remaining excess credits are settled at a lower rate. The specific timing and rate vary by utility: Baltimore Gas & Electric (BG&E), Pepco, and Potomac Edison true up accounts in May at approximately $0.05-$0.07 per kWh, while Delmarva Power and Choptank Electric Cooperative reconcile in April at the commodity rate. Southern Maryland Electric Cooperative (SMECO) settles at roughly $0.04-$0.05 per kWh. After this annual true-up, your credit balance resets to zero. All Maryland homeowners with solar systems are eligible for net metering with their local utility, though BG&E customers should note that time-of-use rate schedules are not compatible with net metering. This program makes solar more financially attractive by ensuring you receive value for all the clean energy your system produces.