2023 Solar Incentives Guide for Bel Air, MD - Tax Credits & Rebates

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

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

Solar incentives are designed to mitigate the cost of installing a solar panel system on your home. This category of financial incentives is intended to encourage more people to switch their home over to renewable energy. Different kinds of incentives, like discounts, cash back or monthly utility bill credits, might be available to you. Some incentives may be handled by the state of Maryland, by your utility company or by county or municipality, while others are federal. Some solar incentives you might qualify for are:

• Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in how much income tax you owe the government.
• Solar Renewable Energy Certificate (SREC): In general, solar systems that produce more than a specified (normally small) amount of electricity qualify for SRECs or similar performance-based incentives. SRECs and the like are typically offered at the state level. When you receive an SREC, you can sell it to your utility company or another buyer, and this is usually considered part of your taxable income.
• Rebates: Solar rebates might be offered by your local utility company, or by your state or county. These rebates are essentially partial refunds that are applied after you purchase a solar system and before tax credits are calculated.
• Net Metering: Net metering factors in once your solar system is up and running. If you have a net metering agreement with your Bel Air utility company, they will subtract the value of the excess energy produced by your solar system from your utility bill each month. In some areas, this is a dollar-for-dollar credit, while in other areas you may make back a percentage of the value.
• Tax Exemptions: Your solar panels may qualify for exemptions on both sales and property tax. Sales tax exemptions come into effect at the time of purchase. Property tax exemptions allow you to ignore the value that solar panels add when you are calculating property taxes on your home.

Federal Solar Incentives

When thinking about solar incentives, federal incentives are likely the first thing that comes to mind. You've likely heard of the Federal Solar Investment Tax Credit, or ITC. This incentive is a tax credit that reduces your taxes by a specified percentage of the money you spend on your solar system.

The ITC can be applied to the total cost of solar system installation, including the panels themselves as well as labor, accessories and equipment. 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. Originally set at 30% of total costs, the credit has fluctuated over time, and you may qualify for different amounts depending on when your project was completed. There is no maximum claim amount.

To best understand how the ITC could apply to your situation, get in touch with your local Bel Air solar panel installation expert and request more information.

The ITC was renewed and increased in scope after the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. The Clean Energy Credit lasts until 2035. Your solar installation project undertaken between 2022 and 2032 may qualify for a 30% tax credit; the amount will decrease slightly on a yearly basis until the end of the current program. Starting in 2023, the expansion will also make it easier to get credit for energy storage systems.

More information about the new Inflation Reduction Act can be found here. Your local Bel Air solar panel company can answer any questions you have and explain how the new Clean Energy Credit will apply to you.

State & Local Solar Incentives

Some solar incentives are often also provided by state and local governments. As with federal incentives, these can include tax credits, rebates and more. Incentives might be provided by the state of Maryland, or by your county or municipality. Certain incentives are available for only a limited time, while others are ongoing.

Next Steps for Installing Solar in Bel Air

The expanding number of solar incentives available has contributed greatly to the increase in the adoption of solar energy nationwide over the last 15 years. You can get solar incentives from the Maryland government, the federal government or your local utility company. When you're ready to make the switch to solar energy, talking to your local Bel Air solar panel installation expert is a great first step.