Solar Guide

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 approximately $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, your solar equipment must be installed on residential property and used to generate electricity for your home or provide hot water. The law covers ‘solar energy property’ broadly, including both photovoltaic systems and solar thermal equipment. There are no income restrictions or application deadlines – the exemption automatically applies once your system is installed and assessed by your local tax authority.

Maryland’s Sales Tax Exemption for solar energy systems eliminates the state’s 6% sales tax on solar equipment purchases. This means homeowners don’t pay sales tax when buying solar panels, inverters, batteries, and other qualifying solar system components. For a typical residential solar installation costing $20,000, this exemption saves homeowners approximately $1,200.

The exemption applies to all solar energy equipment purchased for residential use in Maryland. There are no income limits, system size restrictions, or application processes required – the tax exemption is automatically applied at the point of sale. This incentive works alongside other solar programs like the federal tax credit and Maryland’s renewable energy credits to make solar more affordable. Homeowners should ensure their solar installer properly applies this exemption during purchase to receive the full benefit.

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, with about 47% already reserved as of June 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 for grants. Important note: homes that have already received funding from Maryland’s Solar Energy Equity Grant Program cannot receive additional funding through this program.

The FY25 program stopped accepting applications on June 13, 2025, but the FY26 program is expected to open in July 2025. Homeowners interested in future funding should monitor the Maryland Energy Administration website for updates and ensure their chosen contractor is on the approved list before signing any contracts.

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 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, so you can hold them hoping for better prices or sell them immediately. Keep in mind that if you sell your SRECs, you can no longer claim to be using solar energy yourself – that environmental benefit transfers to the buyer.

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 would normally pay for electricity.

These credits accumulate on your account and can be used to offset your electricity costs during months when your solar system produces less energy, such as during winter or cloudy periods. All major Maryland utilities participate in this program, including Baltimore Gas & Electric, Pepco, Potomac Edison, Delmarva Power, SMECO, and Choptank Electric Cooperative. However, the financial benefit varies slightly by utility company during the annual true-up process.

Each spring (typically in April or May), your utility company will settle any remaining excess credits at a reduced rate ranging from approximately $0.04 to $0.07 per kilowatt-hour, which is lower than the full retail rate you receive during the year. After this annual settlement, your account resets to zero. It’s important to note that some rate schedules, particularly time-of-use plans with Baltimore Gas & Electric, are not eligible for net metering, so homeowners should verify their current rate plan compatibility before installing solar panels.