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 added value that solar panels bring 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 annually 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 solar system is installed and assessed.

This exemption continues for as long as you own the solar equipment, making it a long-term financial benefit. The savings are automatic – you don’t need to file special paperwork each year, as your local tax assessor will handle the exemption when calculating your property taxes.

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. The exemption helps reduce the upfront cost of going solar by eliminating hundreds or thousands of dollars in sales tax on your solar purchase.

There are no income limits, system size restrictions, or application deadlines for this exemption – it’s automatically applied at the point of sale when you purchase qualifying solar equipment. The exemption covers both the equipment itself and any installation materials needed for your solar system. However, the exemption does not apply to general construction materials, tools, or labor costs associated with installation. Your solar installer should automatically apply this exemption when calculating your system cost, but it’s worth confirming that sales tax has been removed from your solar equipment purchase.

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 through aggregators or directly to suppliers.

One important consideration: if you sell your SRECs, you can no longer claim to be using solar energy yourself – that environmental benefit transfers to the buyer. You’ll need to decide whether you prefer the financial return from selling or want to keep the environmental bragging rights of using your own clean energy.

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 (like 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 some rate schedules may not be compatible with net metering – for example, Baltimore Gas & Electric’s time-of-use rate schedules are not eligible. The specific terms and true-up timing can vary depending on your utility company, so homeowners should verify the exact details with their local electric provider when considering solar installation.