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

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

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 in place to encourage more homeowners to convert their home partially or fully to renewable energy. Incentives may include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are offered by the federal government, while others are handled by the state of Maryland or your specific utility company, county or municipality. Some solar incentives you might qualify for are:

• Solar Renewable Energy Certificate (SREC): Generally, solar systems that produce over a specific (generally small) amount of electricity can qualify for SRECs or other similar performance-based incentives. SRECs and the like are typically provided 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: Your solar installer might help you claim a rebate, or partial refund after purchase, for your solar system. Counties or states will also sometimes offer limited-time rebates. If you receive a rebate, that amount will usually be deducted from your total price before tax credits are calculated.
• Tax Exemptions: Your solar system could qualify for both sales tax and property tax exemptions. Sales tax exemptions come into effect at the time of purchase. Property tax exemptions allow you to exclude the added value of the solar panels when calculating property taxes on your house.
• Net Metering: Make sure you talk with your Chillum utility company about signing a net metering agreement. This allows you to receive credit towards your utility bill every month for the value of excess energy your solar panels generate. You could receive either a dollar-for-dollar credit or a percentage of the value.
• Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the federal government. (This is different from a tax deduction.)

Federal Solar Incentives

When thinking about solar incentives, you probably think of federal incentives first. One of the incentives that most people are likely to be familiar with is the Federal Solar Investment Tax Credit (ITC). This is a tax credit for a predetermined percentage of your solar system's cost.

The ITC applies to solar systems installed after January 1, 2006 on a primary or secondary residence that you own in the United States. Initially, the credit applied to 30% of the total cost — for panels, equipment, accessories and labor — although it may range from 26-30%, depending on when your solar system was installed. There is no cap on the amount you can claim.

Your local Chillum solar panel installation expert can provide you with more information about the ITC and how it applies to your situation.

In August 2022, the Inflation Reduction Act expanded and extended the ITC, now called the Clean Energy Credit. The Clean Energy Credit bolsters the current credit, increasing it up to 30% for solar installation projects started after January 1, 2022 and completed by the end of 2032. At this point, the percentage will decrease slightly each year until the program expires in 2035. The program expansion also makes claiming credit for energy storage systems easier than ever before, beginning in 2023.

More information about the new Inflation Reduction Act can be found here. Your local Chillum solar panel installers are the best people to answer your questions regarding the new Clean Energy Credit and how it may apply to you.

State & Local Solar Incentives

Some solar incentives are often also offered at the local or state level. Similar to federal incentives, these may include rebates, tax credits and more. Certain incentives are ongoing, while others are available for a limited time. Incentives might be offered by the Maryland government, or by your county or municipality.

Next Steps for Installing Solar in Chillum

The large number of available solar incentives has helped tremendously increase the nationwide adoption of solar energy over the past 15 years. You might qualify for solar incentives from the Maryland government, the federal government or your local utility company. We recommend talking to your local Chillum solar installer to learn more about these incentives and to make sure that you're getting the largest number possible for your solar panels.