Frederick, 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 exemption applies to equipment installed to generate electricity for use in your home or to supply power to the electric grid, as well as solar thermal systems that provide hot water.

The financial benefit varies based on your home’s location and the size of your solar installation, but it can be substantial. For example, if your solar system adds $30,000 to your property’s value and your local property tax rate is 1%, you would save approximately $300 per year in property taxes. These savings continue for as long as you own the home with the solar system installed. There are no application deadlines or time limitations—the exemption applies automatically to qualifying solar installations. You don’t need to file any special paperwork beyond your standard property tax assessment process, though you should verify with your local tax assessor that the exemption has been properly applied to your property.

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 processes required. The exemption applies automatically at the point of sale when you purchase eligible solar equipment from vendors in Maryland. Your solar installer should apply this exemption directly to your invoice, so you’ll see the savings immediately rather than needing to claim a refund later.

It’s important to work with a reputable solar installer who understands Maryland tax law and properly applies this exemption to your purchase. Keep all receipts and documentation showing that the sales tax exemption was applied, as this will be helpful for your records. This exemption works alongside other Maryland solar incentives and can be combined with local utility programs to further reduce your overall investment in clean energy.

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 your funding, then you verify your solar installation completion.

The program has a total budget of $12 million for fiscal year 2026. The specific grant amount you may receive depends on your household income and system size, which can be calculated using the program’s Maximum Offer Calculator tool. To qualify, you must meet specific income requirements detailed in the program’s Funding Opportunity Announcement and work with an approved contractor from the Participating Contractor List. Applications are accepted from July 21, 2025 through June 5, 2026, with contracts executed starting June 13, 2025 being eligible.

Important considerations: Your solar system cannot have received funding from Maryland’s Solar Energy Equity Grant Program, as systems are not eligible for both programs. You’ll need to apply through the online portal, and the Maryland Energy Administration will review applications to ensure all requirements are met before approving grants. Working with an approved participating contractor is mandatory—only installations completed by contractors on the official list qualify for this program.

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 electricity suppliers to purchase a certain percentage of their power from solar sources—currently 14.5% by 2030. If suppliers don’t meet this requirement, they face penalties, which creates demand for your SRECs.

The financial benefit varies based on market conditions, as SREC prices fluctuate with supply and demand. You can sell your SRECs directly to energy suppliers, work with an SREC aggregator who sells them on your behalf, or hold 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. The actual dollar amount you receive depends on current market rates at the time of sale.

To participate, you must register your solar system with the Maryland Public Service Commission within 30 days of installation, then register with PJM Interconnection’s Generator Attribute Tracking System (GATS) to start tracking your credits. One important consideration: if you sell your SRECs, you’re selling the environmental attributes of your solar energy to the buyer. This means they can claim to be using solar energy, not you. If maintaining the environmental bragging rights matters to you, you can choose to keep your SRECs rather than sell them—though either choice supports Maryland’s clean energy goals.

Net metering in Maryland allows you to receive full retail 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 you receive a credit on your electric bill at a 1:1 rate. This means every kilowatt-hour (kWh) you send to the grid offsets one kWh you’d otherwise purchase from your utility company at the full retail rate.

Here’s how it works throughout the year: excess credits accumulate on your bill from month to month on a per-kWh basis, helping you offset usage during months when your solar production is lower. However, the way these credits are handled at year-end varies by utility company. Most Maryland utilities—including Baltimore Gas & Electric (BG&E), Pepco, Potomac Edison, Delmarva Power, Southern Maryland Electric Cooperative (SMECO), and Choptank Electric Cooperative—perform an annual “true-up” where any remaining excess credits are cashed out at a lower rate, typically between $0.04 and $0.07 per kWh. This true-up happens in April or May depending on your utility, and your account resets to zero afterward. It’s worth noting that if you’re a BG&E customer, time-of-use (TOU) rate schedules are not compatible with net metering.

Net metering is available to Maryland homeowners who install solar energy systems and connect them to the grid through their local utility company. There are no application deadlines, as this is an ongoing program established by state law. The key consideration is that while you receive full retail credit during the year, any credits remaining at the annual true-up are valued at the lower generation or commodity rate rather than the full retail rate, so sizing your system appropriately to match your annual usage is important for maximizing your financial benefit.