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

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

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

The term "solar incentives" refers to a range of financial incentives implemented to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Incentives can include things like discounts, cash back or monthly utility bill credits. Some incentives are offered federally, while others are handled by the state of Maryland or your specific utility company, county or municipality. Categories of solar incentives include:

• Net Metering: Net metering is an incentive you can get once your solar panels are up and running. If you have in place a net metering agreement with your Colesville utility company, the company will subtract the value of the excess energy your solar system produces from your utility bill each month. In some locations, this is a dollar-for-dollar credit, while in other areas you may receive a refund equivalent to a percentage of the value.
• Solar Renewable Energy Certificate (SREC): SRECs can be sold to your utility company (or other buyers) for money that is generally considered part of your taxable income. Generally, there is a small threshold of energy production to meet before your solar system can earn SRECs or other performance-based incentives. Incentives like these are normally handled by your state government.
• Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in the amount of tax that you owe the government.
• Rebates: Some solar companies will help you claim a rebate, or partial refund after purchase, for your solar panels. States or counties will also offer limited-time rebates at various times. The value of a rebate will usually come off the total price before any tax credits are calculated.
• Tax Exemptions: Your solar system could qualify for exemptions on both sales and property tax. Sales tax exemptions are effective at the time of purchase. Property tax exemptions let you ignore the value that solar panels add when calculating property taxes on your house.

Federal Solar Incentives

When someone says "solar incentives," you likely think of federal incentives first. The solar incentive that you may be most familiar with is the Federal Solar Investment Tax Credit (ITC), which provides a credit on your taxes equal to a specified percentage of the cost of your solar system.

The ITC applies to the total cost of installing solar panels, including the panels themselves as well as accessories, labor and equipment. You can claim this credit for panels installed after January 1, 2006, on a primary or secondary residence that you own and that is located in the United States. From its original value of 30% of the total cost, the credit has fluctuated slightly between 26-30%, and you may qualify for varying percentages depending on when your project was completed. There is no maximum amount you can claim.

To more fully understand how the ITC will apply to you, get in touch with your local Colesville solar panel installer and request more information.

In August 2022, the Inflation Reduction Act expanded and extended the ITC, now titled the Clean Energy Credit. Now, solar installation projects begun after January 1, 2022, and finished by December 31, 2032, might qualify for a 30% tax credit. The amount of the credit will then decrease slightly each year until the current Clean Energy Credit expires in 2035. Starting in 2023, it will also be easier to qualify for credits for energy storage systems under this new program.

Click here to learn more about the new Inflation Reduction Act. The easiest way to learn more about how the new Clean Energy Credit applies to you is to reach out to your local Colesville solar panel installers with your questions.

State & Local Solar Incentives

In addition to those provided at the federal level, there are often also state solar incentives. Rebates, tax credits and more may be available at a more local level. Incentives may be offered by your county or municipality, or by the state of Maryland. Certain incentives may be available for only a limited time, while others are ongoing.

Next Steps for Installing Solar in Colesville

Solar incentives might come from your local utility company, the federal government or the Maryland government. The variety of solar incentives available has facilitated the nationwide growth of solar energy use in the last 15 years. We suggest talking to your local Colesville solar installation expert to learn more about these incentives and to ensure that you're getting the most money possible for your solar system.