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 taxes. For example, if solar panels add $20,000 to your home’s value, you won’t pay property taxes on that additional $20,000.

To qualify for this exemption, your equipment must be classified as ‘solar energy property’ – which includes equipment installed to use solar energy to generate electricity for your home or to feed back into the electric grid, as well as solar systems that provide hot water. The exemption applies to both residential and commercial solar installations. There are no specific deadlines mentioned in the statute, and the exemption appears to remain in effect as long as the solar equipment is installed and operational on your property.

Maryland’s Sales Tax Exemption for solar energy systems eliminates the state’s 6% sales tax on the purchase of solar equipment and installation services. This means homeowners can save hundreds or thousands of dollars on their solar investment, as they won’t pay sales tax on solar panels, inverters, batteries, mounting equipment, and related installation services.

This exemption applies automatically at the point of purchase for any solar energy system components and installation services in Maryland. There are no income limits, system size restrictions, or application processes required – the tax exemption is available to all Maryland residents who purchase qualifying solar equipment. The exemption covers both the equipment itself and the labor costs for professional installation, making it one of the most straightforward solar incentives available in the state.

The Maryland Solar Access Program is a state-funded grant program that helps eligible Maryland residents install solar panels on their homes. This program was created through the Brighter Tomorrow Act of 2024 to make solar energy more accessible and ensure no Marylander is left behind in the clean energy transition. The program operates on a first-come, first-served basis and provides direct financial assistance to qualifying homeowners.

While the specific grant amounts are not detailed in the available information, the program had a total budget of $15 million for fiscal year 2025. To qualify, applicants must meet specific income requirements and work with approved contractors from the state’s Participating Contractor List. The application process involves two steps: first reserving funds through an initial application, then completing installation verification within 180 days of fund reservation.

Important timing considerations include that the FY25 program stopped accepting applications on June 13, 2025, and the FY26 program will open in July 2025. Homeowners should note that solar systems that have already received funding from Maryland’s Solar Energy Equity Grant Program are not eligible for this program. All installations must be completed by contractors on the state’s approved list, and the program includes consumer protection policies to ensure fair pricing and quality installations.

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 SRECs as a bonus reward on top of the electricity savings you already get from your solar panels. These credits help Maryland meet its clean energy goals by encouraging more people to go solar.

While the source doesn’t specify exact dollar amounts, SRECs have real financial value that homeowners can capture in several ways. You can sell your SRECs directly to energy suppliers, work with an SREC aggregator to sell them as part of a group, or hold onto them for up to 3 years hoping prices will increase. For example, a typical 10kW home solar system producing 12,000 kilowatt-hours per year would earn 12 SRECs annually. To participate, you must register your solar system with the Maryland Public Service Commission within 30 days of installation, then sign up with PJM’s Generator Attribute Tracking System (GATS). 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 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 power, such as during winter or cloudy periods. All major Maryland utilities participate in this program, including Baltimore Gas & Electric (BG&E), Pepco, Potomac Edison, Delmarva Power, Southern Maryland Electric Cooperative (SMECO), and Choptank Electric Cooperative. However, BG&E customers should note that time-of-use rate schedules are not compatible with net metering.

At the end of each program year (typically in April or May depending on your utility), any remaining excess credits are “trued-up” at a lower wholesale rate ranging from approximately $0.04 to $0.07 per kWh, and your account balance resets to zero. This means it’s most beneficial to size your solar system to closely match your annual electricity usage rather than significantly overproducing, as excess credits beyond your yearly consumption are compensated at these lower wholesale rates rather than the full retail rate.