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

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

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

Solar incentives mitigate the cost of installing solar panels on your home. These financial incentives are designed to encourage more Americans to make the switch to renewable energy. Incentives may include things like discounts, cash back or monthly utility bill credits. Some incentives are offered federally, while others are handled by the Maryland government or by your specific utility company, county or municipality. You might qualify for any of the following types of solar incentives:

• Tax Credits: Unlike tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government.
• Rebates: Solar rebates may be provided by your local utility company, or by your state or county. These rebates are essentially partial refunds that are applied after your purchase of solar panels and before tax credits are calculated.
• Tax Exemptions: These can come in the form of property tax exemptions, which allow you to exclude the value added by your solar panels when calculating the taxes you pay on your home. You may also qualify for an exemption on sales tax at the time of purchase.
• Solar Renewable Energy Certificate (SREC): SRECs and other similar performance-based incentives are generally handled at the state level. Once your solar system meets the threshold (usually a small amount of energy production), you are eligible to receive SRECs that can then be sold to your utility company or other buyers. The money you make from the sale is usually considered part of your taxable income.
• Net Metering: Net metering is an incentive you can get once your solar panels are up and running. If you've signed a net metering agreement with your Bowie utility company, the company will subtract the value of the excess energy your solar system produces from your utility bill each month. In some areas, this is a dollar-for-dollar credit, while in other places you may receive a refund equivalent to a percentage of the value.

Federal Solar Incentives

Federal solar incentives are probably the first thing that comes to mind when you think about solar incentives. The Federal Solar Investment Tax Credit, or ITC, is the best-known federal solar incentive. The ITC allows you to claim a tax credit for a predetermined percentage of the cost of your solar system.

The ITC can be applied to solar systems installed after January 1, 2006 and under this program you can deduct from your taxes a percentage of the total cost of solar panels, accessories, equipment and labor. You can receive this credit for solar panels installed on a primary or secondary residence in the United States that you own. Originally, you could claim 30% of the total cost, although depending on when the project was completed, your credit may range from 26-30%. There is no maximum claim amount.

Have questions about how the ITC applies to your specific situation? Get in touch with your local Bowie solar panel installer to get 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. Homeowners can now qualify for a credit of 30% of the total solar system installation costs for projects started after January 1, 2022 and completed before the end of 2032. The credit percentage will then begin to decrease yearly until the Clean Energy Credit expires in 2035. Starting in 2023, it will also be easier to obtain credits for energy storage systems under this new program.

Click here to learn more about the new Inflation Reduction Act. The best way to learn more about how the new Clean Energy Credit might apply to you is to get in touch with your local Bowie solar panel company.

State & Local Solar Incentives

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

Next Steps for Installing Solar in Bowie

You can qualify for solar incentives from the federal government and the Maryland government, as well as from your local utility company. Growing availability of solar initiatives over the last 15 years has helped increase nationwide solar energy use enormously. When you're prepared to make the switch to solar energy, calling your local Bowie solar panel installation expert is a great first step.