Gaithersburg, MD

Maryland’s Property Tax Exemption for solar energy systems removes your solar installation from your property tax assessment. This means you won’t pay additional property taxes on the value that your solar panels add to your home, even though they typically increase your property’s market value.

The financial benefit varies based on your local property tax rate and the value of your solar system. For example, if your solar installation adds $20,000 to your home’s value and your local property tax rate is 1%, you would save $200 per year in property taxes. This exemption applies to both solar panels that generate electricity for your home and solar thermal systems that heat water.

To qualify, you must install solar energy equipment on residential property in Maryland. The law covers equipment that uses solar energy to generate electricity for use in your home or to supply power back to the electric grid, as well as solar systems that provide hot water. There are no income restrictions or application deadlines – the exemption automatically applies once your system is installed and assessed.

This exemption is permanent and continues for as long as you own the solar equipment. Unlike some incentives that expire, this property tax benefit provides ongoing savings year after year, making it a valuable long-term financial advantage of going solar in Maryland.

Maryland’s Sales Tax Exemption for solar energy systems allows homeowners to purchase solar equipment without paying the state’s 6% sales tax. This exemption applies to solar panels, inverters, batteries, and other components that are part of a residential solar energy system installation.

The financial benefit varies based on your system size, but homeowners typically save hundreds to thousands of dollars. For example, on a $20,000 solar system, you would save $1,200 in sales tax. There are no income limits or other eligibility restrictions – all Maryland homeowners who purchase qualifying solar equipment automatically receive this exemption at the point of sale.

This exemption is permanent under current Maryland law, with no expiration date or deadline to worry about. The tax savings are applied automatically when you purchase your solar system from a qualified installer, so you don’t need to file any additional paperwork or wait for a rebate check to receive the benefit.

The Maryland Solar Access Program is a state-funded grant program that helps eligible Maryland residents install solar panels on their homes. 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, meaning applications are processed in the order they are received.

While the exact grant amount is not specified in the available information, the program has a total budget of $15 million for fiscal year 2025, with nearly half already reserved for eligible projects. To qualify, homeowners must meet income requirements detailed in the program’s official documentation. The application process involves two steps: first reserving funds through an initial application, then completing installation verification within 180 days of fund reservation.

Important considerations include that solar systems must be installed by contractors on the program’s approved Participating Contractor List, and homes that have already received funding from Maryland’s Solar Energy Equity Grant Program are not eligible. The program includes strong consumer protection policies and requires contractors to demonstrate minimum benefits to customers. Applications are currently being accepted through the program’s online portal, and interested homeowners should review the guidance documents before applying.

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 certificates can be sold to energy suppliers who need them to meet Maryland’s renewable energy requirements, creating an additional income stream beyond your electricity savings.

The financial value of SRECs varies based on market demand, but they provide ongoing income for solar owners. For example, a typical 10kW 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. SRECs have a 3-year lifespan, giving you flexibility to sell immediately or wait for potentially higher prices. Keep in mind that if you sell your SRECs, the buyer can claim the environmental benefits of your solar energy production, not you.

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 normally pay for electricity.

These credits accumulate month to month throughout the year, helping offset your electric bills during times when your solar system produces less energy, such as winter months or cloudy days. However, the financial benefit varies by utility company. Most Maryland utilities, including Baltimore Gas & Electric, Pepco, and Potomac Edison, conduct an annual “true-up” in April or May where any remaining excess credits are paid out at a lower wholesale rate of approximately $0.04-$0.07 per kWh rather than the full retail rate. After this annual settlement, your credit balance resets to zero.

It’s important to note that Baltimore Gas & Electric customers on Time-of-Use rate schedules are not eligible for net metering. The program is available to all residential solar customers across Maryland’s major utilities, making it a valuable way to maximize the financial returns from your solar investment while supporting the state’s clean energy goals.