2025 Solar Incentives Guide for Annapolis, MD - Tax Credits & Rebates

In this guide, we'll cover the latest solar incentives and rebates available in Annapolis.

You'll learn about:

  • Local & State Solar Incentives
  • Federal Tax Credits (Updated for 2024 and beyond)
  • Ways to optimize your solar investment

Solar installers are experts in maximizing your solar tax credits and rebates.
Get a free quote from one of our trusted Annapolis solar installers to see how much you can save.

By EcoWatch Local Advisors

Data Analysis: James Savino

Ranking Methodology: Karsten Neumeister

Updated January 24, 2025

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We work with a panel of solar experts to create unbiased reviews that empower you to make the right choice for your home. No other site has covered renewables as long as us, which means we have more data and insider information than other sites. Our rankings are never affected by revenue or partnerships.

What Solar Tax Credits, Incentives, and Rebates are Available in Annapolis?

Residential Clean Energy Rebate Program

Incentive Type:
Rebate Program
PV: $1,000/project (flat per installation/household incentive)
SWH: $500/project (flat per installation/household incentive)
New GHC: $3,000/project
GHC Replacement: $500/project

Solar Renewable Energy Certificates (SRECs)

Incentive Type:
Solar Renewable Energy Credit Program
Varies based on market conditions

Sales and Use Tax Exemption for Residential Solar and Wind Electricity Sales

Incentive Type:
Sales Tax Incentive
100% exemption from sales and use tax

Property Tax Exemption for Solar and Wind Energy Systems

Incentive Type:
Property Tax Incentive
100% real property tax exemption for solar and wind energy property

Clean-Burning Wood Stove Grant Program

Incentive Type:
Rebate Program
Stick Burning Stove: $500
Pellet Burning Stove: $700

Wood Heating Fuel Exemption

Incentive Type:
Sales Tax Incentive
100% exemption

Local Option - Property Tax Credit for High Performance Buildings

Incentive Type:
Property Tax Incentive

Local Option - Property Tax Credit for Renewables and Energy Conservation Devices

Incentive Type:
Property Tax Incentive
Varies by jurisdiction; credit may be available for up to 3 years.

Baltimore Gas & Electric Company (Electric) - Residential Energy Efficiency Rebate Program

Incentive Type:
Rebate Program
Appliances & Recycling
Clothes Dryer (Electric): $50
Clothes Washer: $75 - $100
Hybrid Heat Pump Water Heater: $500
Pool Pump: $150 - $400
Refrigerator: $100
Dehumidifier: $30
Refrigerator or Freezer Recycling: $50, plus $25 bonus when recycling an old, working room A/C or dehumidifier at the same time
Room A/C or Dehumidifier Recycling (*May 20, 2017 only*): $25
Smart Thermostat: $100

Heating & Cooling
Air-Source Heat Pump: $400 - $650
Central A/C: $300 - $500
Gas Furnace: $250
Furnace Blower Motor: $50 - $100
Geothermal Heat Pump: $1,500

Lighting
Instant discounts vary by participating retailer; see program website

Baltimore Gas & Electric Company (Gas) - Residential Energy Efficiency Rebate Program

Incentive Type:
Rebate Program
Appliances & Recycling
Clothes Dryer (Electric): $50
Clothes Washer: $75 - $100
Hybrid Heat Pump Water Heater: $500
Pool Pump: $150 - $400
Refrigerator: $100
Dehumidifier: $30
Refrigerator or Freezer Recycling: $50, plus $25 bonus when recycling an old, working room A/C or dehumidifier at the same time
Room A/C or Dehumidifier Recycling (*May 20, 2017 only*): $25
Smart Thermostat: $100

Heating & Cooling
Air-Source Heat Pump: $400 - $650
Central A/C: $300 - $500
Gas Furnace: $250
Furnace Blower Motor: $50 - $100
Geothermal Heat Pump: $1,500

Lighting
Instant discounts vary by participating retailer; see program website

Residential/Community Wind Grant Program

Incentive Type:
Rebate Program
Residential: $4,000/kW of normalized capacity at 11 m/s
Community: $1000/kW - $4000/kW, depending on the system capacity

Anne Arundel County - Solar and Geothermal Equipment Property Tax Credits

Incentive Type:
Property Tax Incentive
50% of the cost of materials and installation less any federal and state grants and state solar energy tax credits

Anne Arundel County - High Performance Dwelling Property Tax Credit

Incentive Type:
Property Tax Incentive
LEED or NGBS Silver: 40% of property taxes for 5 years
LEED or NGBS Gold: 60% of real property taxes for 5 years
LEED Platinum or NGBS Emerald: 80% of real property taxes for 5 years

Federal Residential Renewable Energy Tax Credit

Incentive Type:
Personal Tax Credit
30% federal tax credit for systems placed in service after 12/31/2021 and before 01/01/2033. Good for: solar water heat, solar photovoltaics, biomass, geothermal heat pumps, wind (small), fuel cells using renewable fuels.

Source: https://www.dsireusa.org/


The term "solar incentives" refers to a range of financial incentives designed to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Solar incentives may include cash back, upfront discounts or monthly credits towards your utility bill. Some incentives are given by the federal government, some by the state of Maryland and some by your utility company, county or municipality. Some broad categories of solar incentives include:

  • Tax Exemptions: Sales tax exemptions are applied at the point of sale for your solar panels. Property tax exemptions let you ignore the value added by your solar system when calculating the amount of property tax you need to pay on your home.
  • Rebates: Rebates, or cash back after a purchase, are normally given before any solar tax credits are calculated. Rebates might be given by your local utility company, by your county or by your state.
  • Tax Credits: Tax credits reduce, dollar-for-dollar, how much income tax you owe the federal government. These differ from tax deductions.
  • Net Metering: You may be able to sign a net metering agreement with your Annapolis utility company, that may apply to all or a percentage of the excess electricity your solar panels generate. They will then subtract this value from your utility bill each month.
  • Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives are normally handled by your state government. Once your solar system meets the threshold (normally a small amount of energy production), you are eligible to receive SRECs that you can then sell to your utility company or other buyers. The money you receive is usually considered part of your taxable income.
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Federal Solar Incentives

Federal incentives are the kind of incentives that you are most likely to have heard of. The Federal Solar Investment Tax Credit, or ITC, is the most commonly known federal solar incentive. The ITC offers a tax credit for a set percentage of your solar system's cost.

The ITC can be applied to the total cost of installing solar panels, including the panels themselves as well as equipment, accessories and labor. You can claim this credit for panels installed after January 1, 2006, on a primary or secondary residence located in the United States that you own. The tax credit ranges from 26-30% of total costs depending on when your project was completed. There is no maximum claim amount.

Wondering how the ITC applies to your specific situation? Get in touch with your local Annapolis solar panel installation expert to get more information.

The ITC was both renewed and expanded by the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. The Clean Energy Credit is valid until 2035. Any solar installation project that is completed between January 1, 2022, and December 31, 2032, may qualify for a 30% tax credit; this amount will then decrease slightly on a yearly basis until the current program ends. The expansion to the program also makes it easier to get credit for energy storage systems, starting in 2023.

More information about the new Inflation Reduction Act can be found here. The best way to fully understand how the new Clean Energy Credit might apply to you is to speak with your local Annapolis solar panel company directly.

State & Local Solar Incentives

Some solar incentives may be provided at the state and local level. Like with federal incentives, these could include rebates, tax credits and more. These solar incentives — which might be given by your county or municipality, or by the state of Maryland — might be offered for only a limited time, or on an ongoing basis.

Next Steps for Installing Solar in Annapolis

The large number of available solar incentives has contributed greatly to the increase in the use of solar power nationwide over the last 15 years. You might qualify for solar incentives from the Maryland government, the federal government or your local utility company. Your local Annapolis solar panel installation expert can provide you with more details about which incentives you may qualify for, and get you feeling good about making the change to renewable energy today.

EcoWatch's Annapolis, MD Solar Incentives FAQs

How can I learn if I qualify for certain solar incentives?

It's best to speak with your local Annapolis solar installer to get an understanding of which incentives your project may qualify for. Usually, solar incentives apply to new solar panel systems installed on a property you own (in the U.S.) within a specified date range. Some incentives, like those given by the state of Maryland, might have other requirements.

How much can I save on my electric bill annually if I install solar panels on my Annapolis home?

On average, Annapolis homeowners who install solar panels save around $781.87 per year, or approximately $14,855.62 over 20 years after they make the switch.

How long until the federal solar tax credit ends?

The federal solar tax credit, formerly called the ITC and now named the Clean Energy Credit, is slated to end January 1, 2035. The current 30% credit will end in 2032, replaced by a 26% credit in 2033 and a 22% credit in 2034.

I want to switch my appliances out for ones that are more energy-efficient. Are there any credits I can claim?

Under the new Inflation Reduction Act, there are a variety of new financial incentives that are available when you make eco-friendly improvements to your home. More details regarding these incentives, including information about incentives for purchasing new appliances, can be found here.

Can I receive incentives both towards the initial cost of solar panels, and later as reimbursement?

The order your incentives will be applied in could vary depending on which incentives you are eligible for but in most cases yes, you can claim multiple types of incentives for your solar project. Check with your solar installer or a local tax professional to be sure you are claiming all the incentives you're eligible for and applying them in the correct order.

Our goal is to reach as many people as we can with sensible solutions like solar energy. Our team of full-time local researchers collects solar price and installation data for every city in America then compiles it to create these digestible city guides. If you want to read our solar expert's opinion on the top solar companies featured here, follow this link.

Solar incentive research was conducted by Melissa Smith and Karsten Neumeister. Local data analysis was conducted by James Savino. See something we missed or could do better? Email the editor.

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